Property Guide

Buying immovable property in India is fraught with difficulties due to a combination of factors. A meticulous planning at the investment stage itself could indeed avoid hassles later. Some of the pre-requisites indicated below would immensely assist NRIs.

Before buying immovable property:

Scrutinise all original payment documents. The title to the property may be single or joint ownership basis. In the event of any difficulty, a certified copy can always be obtained from local sub-registrar’s office on payment of a nominal fee.

Refer the documents to a lawyer who may certify that clear title can be passed on to the buyer.

Obtain ‘No-encumbrance certificate" for the past 30 years to ensure that no mortgage has been outstanding on the property to be purchased. This will also enable the buyer to ensure that the title belongs to the rightful owner who wants to sell it.

Obtain required clearance under the Urban Land ( Ceiling and regulation) act.

In the event of sale by a third party viz., real estate promoter, check whether he is the absolute owner or holds a registered power of attorney to sell the property.

Seek the assistance of a registered valuer to ensure price quoted is correct market value.

An agreement on the price to be agreed and payment terms.

Sale deed or Agreement to sell must be executed by the seller and buyer. This should include full details and origin to the title to the property, proper identification to the property by neighbouring survey numbers, payment terms and payments made so far and cheque/ draft references.

The stamp duty varies from state to state in India. Ensure that the prevailing stamp duty is remitted. It is levied on the land value of the apartment and in some it is on the whole.

The seller on completion of the project should execute the transfer of title to the buyer by getting it registered with the local sub-registrar of properties under whose jurisdiction the propertyu is located.

Note that under Section 230 A of the income Tax act, 1961 all sale deeds showing the prescribed value and above should be cleared by the Income Tax officer. Only then, the Registrar will register the property. Irrespective of the value shown in the document, the Sub-Registrar will determine the market value of the property and the stamp duly. In case of purchase of apartments, proportionate share of the land on which the apartments are built are registered.

The Agreement should accompany plans, drawings and specifications of each item of work. The Agreement should specify the completion date and the terms of compensation in the event of delay in delivering possession of the apartment.

Remedy:

In spite of all efforts if a buyer gets duped, a complaint may be lodged under the Consumer Protection act.1986, which is a Central Act. Representation can also be made to the Monopolies and Restrictive Trade Practices Commission ( MRTPC ) for issuing instructions for indulging in unfair trade practices A number of states and union territories have established consumer protection councils. The redress machinery, which is quasi-judicial, has also been set-up in a number of states.

To own a dream home is everyone’s desire and at the same time an individual needs the maximum financial help in order to attain this goal. It could be very well said that a financial institution does consider several factors before sanctioning a loan to an individual keeping in mind various factors that will be beneficial for both the parties.

Firstly one needs to ascertain the following:

Do I have the eligibility for a loan?

Let us suppose an individual is drawing a net salary of Rs 30,000 pm. Some housing finance companies will consider 55 per cent of the net monthly salary as being available for EMI payments. In this example, the amount works out to Rs 16,500 (i.e. 55 per cent of Rs 30,000).

The percentage of the salary available for making EMI payments will differ based on the individual's income. The higher the salary, the higher will be the percentage. This is so because the disposable income, and therefore the amount available for making EMI payments, rises with a higher salary and vice versa.

How will I know my Loan eligibility?

One can easily find out all by himself as to how much loan he can avail from any financial institution which will lend him the necessary funds to be utilized for the purpose of realizing the dream of owning a home.

Supposedly the income of an individual is at 30,000 pm and the 55 % of the same amounts to 16,500. The ROI is at 8% and the tenure or loan payment duration is for 20 years and the EMI per lakh is at 836 then an individual is eligible for almost 19 lakh and above loan.

Determination of 3P’s- Profession; Place ;Personal Profile

The lending institution takes into consideration the following factors before giving any amount towards an individual; his profession that he/she is in and whether the same is considered as a negative profession; the location of the property and whether the same comes within the ambit of the organization to sanction the said loan. The personal profile of the individual also plays an important factor in sanctioning the loan .any legal proceedings being instituted in the court of law or if a person has been convicted or charged with moral turpitude such individuals will not be entertained.