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Legal challenges & problems faced by a Non Resident Indian (NRI) while purchasing property in India

 > Legal Advice  > Legal challenges & problems faced by a Non Resident Indian (NRI) while purchasing property in India

Legal challenges & problems faced by a Non Resident Indian (NRI) while purchasing property in India

The Non Resident Indian (NRI) who are based in a foreign country and intend to purchase a property in India which is either commercial or residential property/real estate face lots of challenges and legal issues. The ‘enclosed’ nature of the real estate business in India, along with the lack of information, is often stated as a reason why Non Resident Indian (NRI) are often scared of investing in real estate in India. There is a huge scarcity and/or lack of trusted and diligent real estate listing websites and platforms also pose a major challenge and thus, the Non Resident Indians (NRI) investors have to depend entirely on a real estate broker, or family and friends for any information on the ground reality of the property.

Further, there are persistent issues with respect to Real Estate/Property Development and the same poses a serious threat for the investments made by the NRIs. As the NRI investors are situated overseas, it isn’t easy for them to keep track of the development of the property/properties they have invested in, especially those under construction.

The problems faced by NRIs in this respect are as follows:
• Unexplained project delays
• Inappropriate information regarding project completion
• Fraudulent Builders/Property Dealers/Real Estate Agents & Brokers
• Poor quality of delivered projects
• Huge differences in the property demonstrated on the websites including the brochures and the property/project actually developed
However, these above issues are to a certain extent been addressed by the Real Estate Regulation and Development Act of 2016 (RERA).

Another common problem faced by NRIs is the issue of land grabbing or illegal possession and sale of the property. There have been cases where people have impersonated NRIs and carried out transactions. These people usually claim to be relatives or friends of the NRI owner and present forged documentation and execute the sale of the property on the basis of a forged General Power of Attorney (GPA).

In many cases, the person who sells a property to an NRI provides only a photocopy of the title deed. This could either be because the property was pledged or because there are several owners. The absence of a clear title could result in the sale being challenged before the Court of law and the NRI loosing all its money which was invested.

Authored By: Adv. Anant Sharma

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