Perspective

As an NRI investor looking to purchase property/properties in India, the objective is as rooted in practicality, as it is in sentimentality. For some, it may be a matter of eventually returning to their roots. Most of them intend to earn maximum returns on their investments - either by keeping the property vacant, and waiting for the value to appreciate or by renting it out to tenants in the interim.

Being based overseas, the foremost concern for NRIs purchasing property in India is the problem of distance. Almost all other issues and concerns that an NRI must deal with, can be derived from this fundamental problem.

Let’s take a detailed look at these problems faced by NRIs when purchasing property in India.

5 Problems Faced By NRIs When Buying Property In India.

As much as the advent of technology has made it easier to conduct business across time zones when it comes to matters involving heavy money, nothing beats the security of proximity. And this is primarily what plagues an NRI’s property investment in India.

Here are some of the issues NRI investors have, attributable to the fundamental lack of proximity while purchasing property in India:

1. Lack of transparency:

The nature of the real estate business in India, along with the lack of information, is often stated as a reason why NRIs are scared of investing in real estate in India.

The lack of a trusted platform for due diligence on Indian real estate problems is a major challenge that NRIs cite for their hesitation in purchasing property in India. This is also a reason why 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.

2. Issues With Property Development:

Since 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:

1. Unexplained project delays

2. Inappropriate information regarding project completion

3. Fraudulent builders/property dealers

4. Poor quality of delivered projects

5. Differences in the property demonstrated and actually developed

These above issues are to a certain extent been addressed by the Real Estate Regulation and Development Act of 2016 (RERA). You can read about it in detail from here.

3. Land Grabbing Issues:

Another common problem faced by NRIs is the issue of land grabbing or illegal possession and sale of a 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 - including the Power of Attorney.

4. Lack Of Clear Titles:

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 in a court of law.

5. Lack of Knowledge of Rights:

In cases where the property/properties have been let out, NRI owners are often lost in translation - so to speak, owing to the lack of knowledge regarding their own rights as owners of the property as well as the tenant’s rights in India.

To address these hurdles that NRIs face while trying to purchase property in India, the Government has undertaken some key policy changes in 2016.

These changes are reflected in:

RERA (Real Estate Regulation Act)

GST (Goods and Services Tax)

Benami Transactions (Prohibition) Amendment Act, 2016

If you are looking for a dependable, real estate portfolio manager - Get in touch with Homzhub today!