Problems Faced By NRIs While Investing In India
The real estate market has been one of the sunshine sectors doing its bit in the overall growth of the Indian economy. The rising Indian success story would have been incomplete without the booming real estate sector aided equally by Indian residents as well as Non Resident Indians (NRIs). The bond of seeking a home in their birthplace has prompted a large number of NRIs to invest in the Indian real estate sector both for personal use as well as for investment.
While a large number of NRIs have invested back in India for future personal use, an equal number have invested as a prime investment goal. While the growth story remains by and large in place, there have been an alarming high number of cases where NRIs have witnessed a host of problems when it comes to investing in the real estate sector.
The Indian Real estate sector has been highly unorganized by the nature of its historic growth. Unlike the Telecom sector or other prominent sectors, there has been no clear watchdog for the Indian real estate sector. The rising price of land has meant that just about anyone and everyone is acting as a real estate broker leading to complete lack of transparency and credibility in the system. NRIs who have not been living in India for a long time are most vulnerable since they are not aware of the loopholes in the system leading to a number of cases of fraud and cheating.
Lack of Clarity on Legal Rights:
Many NRIs face the problem of not knowing their legal rights when it comes to investing in real estate in the country. All real estate dealings by NRIs are controlled by the Foreign Exchange Management Act also known as FEMA. The rules clearly state that NRIs can only purchase residential or commercial properties. Any agricultural land including farmland or any kind of plantation property cannot be purchased by a NRI or person of Indian origin.
NRIs especially from the rural belt of Punjab and Gujarat, the two states with the largest NRI population have witnessed a large number of cases of fraud where they have been sold farmland or agricultural land illegally. The best way to bypass this problem is to make sure all property transactions are discussed with a certified real estate legal expert before exchanging any money or signing on any document or power of attorney.
Land Grabbers or Property Gatecrashers:
Another common problem faced by a number of NRIs is the issue of land grabbing or gatecrashers or people taking illegal possession of their properties. Surprisingly in a large number of such cases, the land grabber or person taking undue advantage with illegal possession is known to the NRI.
Be it immediate family members, friends or extended family members; make sure to sign up a legal document in consultation with a legal real estate expert before allowing anyone to temporarily live in any of your property. In case you have not been able to draft such a legal document contact the police NRI cells who deal exclusively in such cases of illegal land grabbing. You can also share your story online and with the media that can take up your case for justice.
Builders with Dubious Records:
An equally large number of NRIs have faced problems as they invested their money with wrong builders who have delayed their project completion. It is recommended to check the previous track record of the builder before opting to invest in any of his or her real estate projects. Not every builder is transparent and honest with a good work ethic.
Make sure to check the feedback from previous buyers and other completed projects before selecting a builder. A number of online real estate portals also offer discussion forums where buyers leave feedback for builders they have been associated with in the past. Make sure to do your homework before finalizing the builder.
