As you buy a new home, these questions will answer all common queries about buying and owing a property in India. Use this guide to acquaint yourself with rules, laws and important information.
Carpet Area: It is the Net usable floor area of the apartment excluding the area covered by the external walls, area under service shafts, exclusive balcony or verandah area and exclusive open terrace area, but including the area covered by the internal partition walls of the Apartment.
External Walls: All walls which are constructed or provided on the external face of an apartment
Internal Partition Wall: All walls or independent columns constructed or provided within an apartment
Service Shaft: It is a duct for the plumbing, drainage and garbage chutes.
A Lease, defined under Section 105 of The Transfer of Property Act, 1882, is a transfer of the right to enjoy the concerned property for a pre-defined time period or in perpetuity. The lessor (owner of the property) gives the lessee (the one leasing the property) such consideration periodically, usually at the beginning or end of a lease agreement. Normally the possession of the property is given to the Lessee.
License is defined in Section 52 of the Indian Easements Act,1882. License does not allow any interest in the premises on the licensee's part. It merely gives the licensee the right to use and occupy the premises for a limited duration. The ownership always remains with the Owner.
A lease deed needs to be stamped and registered. Even the Leave and licence Agreement is required to be stamped and registered. The amount payable towards the lease deed's stamp duty is more than that payable towards the Leave and License. For a period exceeding three years, the stamp duty is same for both agreements.
There are various implications of entering into a lease agreement such as you have to pay the stamp duty, the lease agreement has to be registered etc.
A foreign national resident outside India cannot buy immovable property in India. However, foreign nationals who are resident in India (and who are not citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan) can purchase immovable property in India without any special approval from the RBI. However, such buyers should check with their lawyers before buying any property as they might require approvals from other authorities such as the State Government, etc. The RBI may grant permission to a foreign citizen of non-Indian origin/foreign companies if the property is purchased for residential use and the consideration is paid by way of foreign exchange.
Under the general permission granted by RBI, (a) Non-Resident Indian (NRI)- and b) Person of Indian Origin (PIO) are allowed to purchase immovable property in India.
You are requested to check the RBI guidelines for more information in this matter.
By registering the transaction of an immovable property, it becomes permanent public record. Title or interest can be acquired only if the deed is registered
On sale of the property, the profit on sale shall be subject to capital gains. If they have held the property for less than or equal to 3 years after taking actual possession then the gains would be short term capital gains, which are to be included in their total income as tax as per the normal slab rates shall be payable and if the property has been held for more then 3 years then the resultant gain would be long term capital gains subject to 20% tax plus applicable cess.
The long term capital gains arising on sale of a residential house can be invested in buying/constructing another residential house, within the prescribed time. The exemption is restricted to the amount of capital gains or amount invested in new residential house, whichever is lower
You are requested to check the Income tax Laws/Rules and consult you tax consultant
A notice is sent to the tenant, failing which a court case may be filed. It usually takes 10 to 20 years to reach a verdict.
Yes, tenants of an old, repaired building can form a co-operative housing society without the landlord's permission. Assume there is a lease agreement for 6 years for a shop with a built-in escalation clause at the rate of 20 per cent after 3 years. The lease expires on a specified date say, March 31, 2000 and the concerned landlord has sent a written letter. It is always advisable to make a new agreement with the landlord.
There is no prescribed norm for determining the market rent rate though it can be easily found out by approaching individuals such as brokers, registration authority, etc.
THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016
The Real Estate (Regulation And Development) Act, 2016 (“the Act”) is an Act passed by of the Parliament of India to regulate the transactions between the promoter and the allottees in connection with the project and seeks to protect the home buyers as also to boost investment in the real estate industry and deals with issues like delays, price, quality of construction, title and other changes. The aim of this Act is to establish state level regulatory authorities called Real Estate Authorities to ensure that the sale of real estate projects is conducted in a transparent and efficient manner and speedy redressal of the grievances concerning the complainants for their real estate investments. The Act makes it mandatory for all commercial and residential real estate projects, which exceeds 500 square metres, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) with a view to provide transparency in project-marketing and execution. The promoters of each and every project are compulsorily required to get registered their project under the Act. The Act has also a provision for non-registration of the project, which may invite a penalty of upto 10% of the project cost or three years of imprisonment. The Act also requires the registration of the real estate agents with the RERA.
The Act includes all private and public bodies that develop real estate projects for sale. The Act also mentions that, “where the person who constructs or converts a building into apartments or develops a plot for sale and the person who sells apartments or plots are different persons, both shall be deemed to be the promoters and shall be jointly liable as such for the functions and responsibilities specified, under this Act or the rules and regulations made thereunder”. This definition will also be applicable to joint venture agreements when the property owner and developer are two different parties and both are beneficiaries of the sale of the project.
The promoter will have to obtain registration under this Act for each phase separately as each phase, will be considered as standalone project by the promoter.
Yes. The promoter has to obtain necessary insurance including the title of the land and the building as a part of the project and towards the construction costs. The promoter is liable to pay the insurance premium and handover the necessary documents to the association of the allottees, whenever formed.
No, the project does not include the registration of the project specific to leasing/leave and license.
The promoter shall ensure the formation of the association of allottees within a period of 3 (three) months of the majority of allottees having booked and as per MahaRERA 51% of the allottees have booked their apartments in the project.
The website of the RERA will display all the registered projects and the developer shall display the registration no. in all its brochures and its advertisements.
At the time of the registration of the project, the promoter has to give a declaration supported by affidavit stating the time lines within which the project is deemed to be completed.
In the event of failure by the agent to register with RERA or contravention of any of the provisions prescribed by RERA, is liable to penalty of Rs. 10,000/- for each day which default continues.
In case of violation of any of the provisions of the Act or rules or regulations, an aggrieved person may file a complaint with RERA.
There is no bar under the Act on the aggrieved buyer from approaching the consumer courts for redressal of grievances however, such aggrieved buyer can anytime withdraw its case from the Consumer courts and approach the concerned authority established under the Act.