Real estate being a vast subject in India, creates a lot of confusion. This article is expected to help homebuyers understand the real estate sector in the country.
The Indian Registration Act., contains within in, the law of registration of documents. This law mandates the registration of all properties purchased in India in order to ensure safeguarding the evidence, prevent fraud, and assure ownership. As per Section 17 of the act, all realty transactions exceeding Rs.100 must be registered. Furthermore, gifts in the form of property, and all lease agreements over 12 months must also be registered.
All documents that are supposed to be registered must be submitted to the Sub-Registrar of Assurances, depending on where the property is located. Authorised signatures of two witnesses must be present along with the signatures of the buyer and seller in order to register the property. The witnesses, along with the buyer and seller should also have proof of identity for the documentation to be accepted. This can include PAN card, Aadhaar card, Driving licence, etc.
All the documents including the receipt of stamp duty, along with the property card must be handed over to sub registrar. After verification, the sub-registrar will decide on whether or not the document can be registered.
The documents should be presented to the sub-registrar within four months of execution, along with the requisite fee. A condonation of delay can be applied for in case there is a delay in presenting the documents. This must be done within the next four months. Failure of registering your property will put you in serious risk, and you will have no evidence to provide in the court of law in case of any dispute.
Although the rules of real estate act is centralised, each state has the authority to sanction its own set of rules. States have their own regulatory authorities and can modify the centralised laws. However, only 13 states currently have their respective laws.
In the even if a dispute, homebuyers can now go to special real estate courts that are set up in every state. This is dose to speed up the redressal process and has proven to be successful over the last few years.
Any delay in housing projects by the builder will attract a penalty. The builder will either have to refund the entire amount to the homebuyer or pay interest to the home buyer until the property is delivered. The interest rate will be 2% higher than what is charged by the State Bank of India, on the total amount paid by the investor.
Q. Can foreign companies purchase property in India?
Ans: There are certain regulations, as per the Foreign Exchange Management Act, 1999, with regard to the acquisition and sale of properties by foreign entities in India. Any foreign entity that has a branch office in India is allowed to invest in immovable property here. However, this property should solely be used for carrying out business.
Q. In the event of transfer of immovable property, what are the stamp duty and registration charges?
Ans: In case of transfer of immovable property, the stamp duty and registration must be completed before you execute the transfer. The charges vary from state to state, and also depends on the nature of the transfer. However, on average, stamp duty charges range from 4% - 7% of the property value. These properties have to be registered, except for when the property has been rented out for less than a year, or upon sale of property. Registration charges are typically 1% of the sale deed value.
Q. What are some of the important features of REIT?
Ans: Real Estate Investment Trusts (REITs) must be set up with SEBI, and must have a manager, trustee, and a sponsor. This organisation is allowed to make investments in commercial real estate, and can also raise capital through IPO (Initial Public Offering). REIT must compulsorily list its units on a renowned stock exchange in 12 working days from the date of closure of the closing of the IPO.
Q. How are real estate properties distinguished by the government of India?
Ans: Areas of land are usually divided into several sectors based on land usage. Some of the main zones are commercial zone, residential zone, and industrial zone. There are also special zones such as Special Economic Zones (SEZs), etc.
Q. What are RERA’s main objectives?
Ans: Some of the objectives of RERA are mentioned below:
Q. How is rent payable?
Ans: Rent is usually payable per square feet, per month, in Rupees. The rent is usually paid in advance or before the 10th of every month. This is usually exclusive of Service Tax and Swachh Barat Cess.
Although real estate laws can be confusing, a little research can help you navigate in this traitorous world of real estate with ease. Knowledge gained in the area can also help you avoid the pitfalls while making realty transactions and protect you from any fraudulent practices that may occur. Therefore, it is important to understand the laws and practices in this industry.
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