Real Estate two


India is a land of opportunities

Investing in Real Estate in India

Indian real estate has huge potential demand in almost every sector especially commercial, residential, retail, industrial, hospitality, healthcare etc. 

Commercial office space requirement is led by the burgeoning outsourcing and Information Technology Industry. The leaders of the IT/ITES world have set up or are setting up their centers in India. Estimated demand from IT/ITES sector alone is expected to be 150mn sq.ft. of space across the major cities by 2010. 

In residential sector there is housing shortage of 19.4 million units out of which 6.7 million are in urban India. 

The increase in purchasing power and exposure to organized retail formats has redefined the consumption pattern. As a result the country has experienced mushrooming of retail projects across the cities.

The main growth thrust is coming due to favorable demographics, increasing purchasing power, existence of customer friendly banks & housing finance companies, professionalism in real estate and favorable reforms initiated by the government to attract global investors.

Foreign Investment (FDI) in Real Estate Sectors in India

Foreign Direct Investment is encouraged and permitted, subject to certain conditions, in the following real estate sectors in India:

·         Hotel Development

·         Tourism

·         Hospitality

·         Township development

·         Developing Commercial Real Estate

·         Built-up infrastructure

·         Housing and construction projects

·         Building Resorts

·         Building Hospitals

·         Building Educational institutions

·         Building Recreational facilities

·         Infrastructure projects: regional and local level

·         Special Economic Zones (SEZ's)

Property Document Verification India:

Property document verification if an important task and back bone of project. Any defect or deficiency may harm the project and get financial losses. Property should be free from all litigation and favorable to use the property for the purpose it purchase in terms of Municipal, rural, urban, revenue and all other local laws and regulations. Get the services of real estate lawyers those who can handle Property Verification, Documentation, Registration and Real-estate-project developmental regulations. Before you buy a property, you need to verify the property related documents for avoiding all complexities and risk involved with the property.

We offer a great combination of legal expertise along with superior quality services to verify your property related documents. 

The Document Verification involves conducting verification of documents related to the property which enables the clients to get complete information, genuineness and reliability of the documents pertaining to the property.  We provide dedicated services for verification of all type of documents related to the property. 

Once the details regarding the property is submitted, legal experts will verify and scrutinize the documents/records and provide expert opinion on the subject matter. Also give all assistance for getting the absolute title over the property. 

 Overview to Checklist for Property Document Verification. 

Different kind of property documents are required to verify authenticity of property. Please find below the list of documents which you should verify. You can ask your seller to provide all the documents listed below. The given documents may vary from state-to-state and case-to-case basis though. 

 

Buying a flat in an apartment

 

Mother deeds/Title verification

Development agreement, if any

Memorandum of understanding, if any

General power of attorney, if any

Memorandum of sharing, if any

Approved sanction plan and license

Approval from the concerned authority /Construction permission – BDA/BBMP/ Vary from state-to-state

Betterment charges, if any

NOC

Khata Certificate

Khata Extract

Tax Paid Receipts

Encumbrance certificate

 

 

Buying property in a private layout

 

 

Mother deeds/ Title verification

Approved layout plan

Conversion/Permission order

Approval from the concerned authority

Betterment charges receipt

Khata

Tax paid receipts

Encumbrance certificate

Revenue records

Vary from state-to-state

NOCs

Vary from state-to-state

 

Buying agricultural land

 

 

Mother deeds/ Title verification

Record of rights

Hissa tippani

Hissa survey

Survey settlement akarbandh extract

Agricultural pass book

Mutation register extract

RTC

Tax paid receipts

Village map

Revenue Records

 

Vary from state-to-state

 

Conditions for Foreign Investment in Real Estate Sector in India

 

Foreign Direct Investment in some of the aforesaid areas (not all) is subject some conditions, some of which are as follows:

 

·       Develop a minimum land area of 10 hectares for serviced housing plots, and a minimum built-up area of 50,000 sq m in case of construction projects. The policy does not clearly define ‘built-up’, though FSI (Floor Space Index)/FAR (Floor Area Ratio) could be used as a basis for the same.

 

·      Fulfill the minimum capitalization norm of $10 million for a wholly-owned subsidiary and $5 million for JVs. The funds would have to be brought in within six months of commencement of business (which needs to be defined) of the subsidiary or JV.

 

·   Complete at least 50% of the integrated project within five years from the date of obtaining all clearances.

 

·    Do not sell undeveloped plots (with no infrastructural backup). Provide infrastructure and obtain the completion certificate from the concerned local body before disposal. This clause needs amendment because certificates are sometimes not issued for months on end, even years, an uncertainty which tends to raise project cost, often beyond viability.

 

·     Do not repatriate original investment before three years from completion of minimum capitalization. Early exits require prior approval of the Foreign Investment and Promotion Board.

 

·         Conform with all applicable local and state laws, and abide by all regulations and norms. 

 

FDI in Real Estate in India

 

Previously, only NRI's and PIO's were allowed to invest in the housing and the real estate sectors. Foreign investors other than NRIs were allowed to invest only in development of integrated townships and settlements either through a wholly-owned subsidiary or through a joint venture (JV) company along with a local partner.

 

India fully opened FDI in real estate in 2005. However, norms issued later made a minimum capitalization of $10 million for wholly-owned subsidiaries and $5 million for joint ventures mandatory. The government also imposed a minimum area requirement. 

 

The department of industrial policy and promotion had in March 2005 allowed FDI in real estate in projects in a minimum area of 25 acres. 



The finance ministry has allowed external commercial borrowing (ECB) in realty projects involving integrated townships of 25 acres or 50,000 sq m. However, the Reserve Bank of India has not yet notified it.

At present, the government allows FDI in real estate, but does not permit foreign institutional investment. It is, however, considering a proposal not to view FDI and FII as distinct investment flows while specifying an overall limit. 

It is yet to permit foreign venture capital investors (FVCI) in the realty sector. To ensure that the concept of special economic zones (SEZs) did not distort the realty market, the RBI has classified lending to SEZs on par with commercial real estate, according it higher risk weight and provisioning.

 

The RBI allows ECB in real estate projects involving integrated townships of 100 acres or more. In real estate projects, a large portion of money is required for land acquisition, which is classified as working capital. But end-use restrictions like not allowing ECB money to be used for working capital take away its attractiveness. 

We are law firm having team of expertise lawyers in real estate, provide legal services from all corners considering the various risks involved in this sector:

 

Contact us for further Information and project consultancy 

 

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