INDIAN REAL ESTATE LAWS
By Sushma gowda
The central government compiled and passed the Real Estate Regulation and Development Act, 2016.
Some of the objectives of RERA are mentioned below:
The Real Estate (Regulation and Development) Act 2016 makes the realty developer responsible for any damage found in the property within five years of the buyer’s ownership. The developer will be legally accountable to fix the problem without charging the buyer. This has to be done within 30 days of the notice or else the developer has to compensate the buyer.
The Real Estate Act 2016 also binds the buyers with a penalty if they do not conform to the orders of the Real Estate Regulatory Authority. The customer will have to pay a penalty charged day-wise of the non-compliance period. The fine can go up to 5 percent of the property price.
Landlords and property owners cannot enter the property of their tenants without a written notice in 24 hours. The notice is also applicable to the case where the landlord wishes to renovate the property. According to experts , this is in accordance to the Draft Model Tenancy Act 2015.
The Foreign Exchange Management Act (FEMA) orders overseas companies to produce a declaration to the Reserve Bank of India within a 90-day deadline when they book a property. Reimbursement of the same while selling will need the bank’s authorization in advance.
As per India real estate laws, Non-resident Indians (NRIs) and people of Indian origin (PIOs) are free to invest in residential or commercial real estate without any limitations. However, NRIs have to seek RBI’s permission when it comes to the purchase of a farm house or a piece of agricultural land.
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.
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.
CONCLUSION
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.
