Common Problems Faced By NRI Investors
Finding the right kind of property is always a struggle, especially when you live in a different country. Non-resident Indians (NRIs), for instance, often face several issues while they plan to invest in Indian real estate market.
We list some common problems faced by this segment of buyers and their possible solutions:
Lack of clarity on rights
There is a lack of clarity on legal rights of NRI homebuyers when it comes to investment in India. Punjab and Haryana which have the largest population of NRIs have reported the highest fraud cases as the locals dupe buyers by selling farmland and agricultural land illegally.
To cope up with this, investors should deal with certified real estate brokers only. With the Real Estate Regulatory Authority taking shape, all property agents are getting themselves verified by the state authority, making it easy for the real estate buyers to transact. Moreover, all real estate dealing by NRIs takes place under the Foreign Exchange Management Act (FEMA). According to the FEMA rules, NRIs can invest only in residential and commercial properties. A person of Indian origin or non-resident Indian cannot invest in farmland or agricultural land.
Land grabbing issues
Illegal possession, gatecrashing is another challenge faced by NRIs if they are investing in India. In fact, in majority of the cases, the land grabber and person taking illegal possession is known to the buyer.
NRIs should get in legal agreement in consultation with the real estate broker, with the local relative or family members before allowing anyone to use their property.
Concerns about developers
A large number of NRI investors have suffered because of their investment in the wrong project and real estate developer who have delayed their projects.
With real estate law in place, buyers can check the track record of the developers on the state RERA website. Now, one can check everything about a developer online. Apart from this, use social media and internet to check the feedback of previous homebuyers. The best way to deal with such situation is to buy through real estate portals which are bound to list only verified projects. Check discussion forum to get information about the project you are interested in.
Though RERA will encourage transparency in the unorganised real estate market of India, it is only a medium which enables access to information on one platform. Due diligence would still be a responsibility of investors and buyers.