Buyer's Guide - Legal Information

A foreign national who is not an NRI cannot buy any immovable property in India. It is illegal for foreign nationals to own property in India.It is also illegal to buy property on a tourist visa. Moreover property cannot be purchased jointly in the name of one eligible person with one non-eligible person.A foreign national of Indian origin is “ any person who or either of whose parents or any of whose grand-parents was born in India as defined in the Government of India Act, 1935 ” or any person who held an Indian passport at any given time. There is no limit in the amount and/or number of properties that can be bought.

To purchase property, it is important for the buyer to hire a real estate attorney to protect his/her interests during the transaction. Once the property has been chosen, and a price has been negotiated with the seller, the attorney draws up an Agreement of Sale. Upon signing, the buyer normally pays a deposit as per the payment plan of the company or seller. The lawyer then conducts due diligence and the buyer obtains the title documents from the seller. The title should be checked to have encumbrances. The conveyance documents must be stamped at the Stamp Duty Office before signing. After this, the remaining balance is settled, and the deed is registered at the Sub-Registrar of Assurance Government duties are paid.

Once all the matters, financial/otherwise are settled between the parties, it is better to give an advance and write an agreement.
  • The agreement should be written in Rs.50 stamp paper
  • The agreement should state the actual cost, the advance amount, the time span within which the actual sale should take place and how to proceed in case of any default from either parties, to cover the loss.
  • The agreement can be prepared by a lawyer and should be signed by both the parties and two witnesses.
  • After signing the agreement if one of the parties makes a default, the other party can take legal action against him.
Stamp Duty
It is a tax, similar to sales tax and income tax collected by the Government, and must be paid in full and on time.
  • A stamp duty paid is considered a legal document and such gets evidentiary value and is admitted as evidence in courts.
  • Stamp duty is a State subject and hence would vary from state to state
  • The agreement can be prepared by a lawyer and should be signed by both the parties and two witnesses.
  • When an agreement is to be stamped, it needs to be unsigned and undated one may execute the agreement only after the Stamp Office affixes stamps on the agreement.
Registration is the process of recording a copy of a document, transferring the title in immovable property to the office of the Registrar. It acts as proof that a transaction has taken place.
  • A draft should be prepared before actually writing the document in stamp paper.
  • Registration is done after the parties execute the document.
  • The agreement should be registered with the Sub-Registrar of Assurance under the provisions of the Indian Registration Act, 1908 within four months from the date of execution of the document.
  • Make sure all the details mentioned are accurate.
  • Original title deed, Previous deeds, Property/House Tax receipts, etc plus two witnesses are needed for registering the property.
  • The expenses involved during registration include Stamp Duty, registration fees, Document writers/ lawyers fees etc.
  • Make sure that the deed is registered within the time limit mentioned in the agreement.