Buying Property in India as an NRI: How to Verify a Clear Title

Most Non-Resident Indians purchasing property in India for the first time means buying real estate in their home country, and it can feel highly emotional and personal. Unfortunately, property disputes can arise in India due to the lack of updated and complete records of ownership and other documents. This is why property title verification is key to an ownership transfer and for avoiding potential future disputes. As most Indian lawyers would say, without a clear title, you cannot be secure in your ownership.




What Legal Regulations Exist for NRI Property Purchase in India?

Many laws protect the owner of the property, and also the funds used to pay for the real estate. The property laws under which NRIs can purchase a personal or business property are as follows:

●      The Foreign Exchange Management Act (FEMA)

●      The Transfer of Property Act, 1882

●      The Registration Act, 1908

The Indian laws restrict NRIs from buying agricultural land and farmhouses unless inherited.

What Does Clear Title Mean?

A clear title indicates that the seller has legal possession and ownership of the property, along with the right to transfer it to another party, with no disputes or legal claims pending. The Indian court has stated multiple times that ownership has to be unbroken and must be traceable. Discussions with any famous lawyer in India regarding ownership of property often highlight that verification of legal ownership and physical possession is the duty of the buyer.

What Documents to Check To Confirm a Clear Title?

Buyers should look at the following to confirm a clear title:

●      The title deed with an unbroken chain of ownership

●      An encumbrance certificate that states whether the property is free from loans or court attachments

●      Approved building plans, along with a completion or occupancy certificate

●      Receipts for property taxes and utility payments

●      Records of mutation from the municipal or revenue authorities

Lawyer firms in India often stress the importance of consistency across these documents. Any inconsistency can suggest possible concealed problems.

Significance of Legal Due Diligence

It has been established by Indian courts that buyers must be careful before acquiring a property. Generally, diligence involves the following actions:

●      Confirming if the seller is legally able to sell

●      Confirming if previous transfers have been legally documented

●      Investigating the existence of any ongoing processes concerning the property

Litigations of property ownership keep coming up in discussions of the Indian legal sector. A property buyer gets an unpleasant surprise if there is a legal claim against a property that they have purchased, regardless of whether they are aware of the claim.

What Happens If Title Verification is Not Done

Not verifying a title can result in the following:

●      Monetary problems

●      Protracted litigation

●      Obstructed future transfer of ownership or inheritance

NRI buyers are in a special situation. In addition to the problems related to title diligence, there are additional issues that stem from their location, which inhibit their ability to inspect the property and subsequently increase their reliance on third parties.

Conclusion

When buying property in India, the most essential measure that can be taken by NRIs is verifying that the title is clear. There is a clear and organised outline of Indian laws that can be followed to determine title ownership, but in the end, it is the buyer who must take on that responsibility. Courts have consistently emphasised the importance of the buyer examining the property and supporting documents with care. Lawyer firms in India have been able to provide their clients with protection of their investments and peace of mind through title diligence.

Location: Esplanade Mansion, Marx Engels Beethi Rd, Chowringhee North, Bow Barracks, Kolkata, West Bengal 700069, India

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