What Documents do NRIs need to verify before buying a property in India?

While investing in a property in India, one has to be very clear about certain things so that no loss is incurred to the buyer pertaining to such a purchase in the future. Suppose the purchaser is not aware of the proper procedures which have to be followed during the buying-selling process; in that case, it may attract many complications and troubles for him, which can cause substantial mental agony and pain. 

In the case of NRIs investing their money in India for purchasing immovable properties, they have to be very cautious as they are the main targets of fraud sellers. Scrutiny of all the property-related documents, verification about the buyer’s reputation, research regarding the property and procuring the required documents are the main steps that are crucial for an NRI to undertake while buying a property in India. It is important to know that an NRI can only purchase commercial and residential properties in India and not agricultural properties. 

Steps to Undertake While Buying the Property in India

  • First of all, due diligence has to be made by the buyer for the property he is willing to purchase. The property title should be clear, and it should be free from all kinds of encumbrances. The history of the property is to be checked whether it was part of any legal dispute. The reputation of the person selling the property has to be verified. Many fraudulent sellers aim to extort money from the NRIs by showing them fake documents and images of the properties. Also, the property’s market value is to be checked by various sources so that the seller does not dupe the buyer by paying unfair prices. 
  • A checklist has to be prepared to ensure all the documents are in place before buying a property in India. The list includes the following documents:
  1. Ownership Documents: Ownership or Title Document is that document that reflects its true owner’s valid title. These documents are Sale Deeds, Transfer Deeds, Gift Deeds, Allotment Letters, Jamabandi etc. Documents like Succession Certificate, Will, Family Settlement Deeds, Partition Deeds are also considered as necessary title documents evidencing that transfer of the title was made to the seller. 
  2. Construction and Land Use Certificates: If the deal is being made with a builder or a Contractor for a commercial or residential flat, then before agreeing, ask the builder to furnish documents of all the permissions taken from the Government. Besides, it requires to be checked whether the builder has obtained the Construction Clearance Certificate. This certificate is proof that the builder has duly obtained various sanctions and licences regarding the project’s site. Similarly, make sure that the builder has Land Use Certificate; for verification, an application can be made to the concerned Govt. Offices to procure the information. Other than this, the Occupancy Certificate and Tax-related documents are also required to be checked.
  3. Revenue Documents: If the property falls under revenue records, then Jamabandi and Mutations records must be verified before purchasing the said property. 
  4. Sale through Power of Attorney: If the Seller is disposing of the property through his Power of Attorney holder, the first and the foremost step is to confirm the authenticity of the said Power of Attorney. If the POA holder is the only personal dealing party, then he/she must first check the whereabouts of the valid owner of the property. 
  5. Purchase through Power of Attorney: When an NRI is purchasing the property through Power of Attorney, make sure that the said General POA or Special POA is duly notarized in the country where the NRI is residing and then properly stamped and embossed in India. If the POA is not properly stamped as per the Law requirements, the sale procedure will be treated as illegal and void.  
  • Physical Inspection of the property: This is one crucial thing that has to be undertaken before buying a property in India. If the NRI cannot personally visit India for the said purpose, his local contacts can do the needful. 

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When a buyer follows all the above- mentioned procedures before buying a property in India, chances of becoming a victim in the hands of fraud sellers get entirely ruled out. NRIs should stay away from the sellers who offer them to purchase the properties without payment of taxes or properties without proper paperwork.