NRI Property Issue And Steps For Safeguarding The Property

A NRI who is staying away for a long time must ensure that property back in India is safe and protected from illegal means. In case you are facing any problem regarding your property, issuing a public notice regarding ownership of property can be seen as a remedy.

Steps to protect the property:

  1. Properly secure the property by the fence surrounding it
  2. If providing power of attorney to any known or relative, it should be specific
  3. Well and clear drafted tenancy agreement
  4. Tenants should go through police verification process
How Lead India helps in NRI Property Issue?

Our consultant will discuss the issue over a 24X7 helpline “Samadhan”

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The properties owned by NRIs are regulated and governed by the Foreign Management Act (FEMA). Under the guidelines provided by RBI, NRIs can purchase residential as well as commercial properties in India. However, guidelines do not allow the NRIs to purchase any agricultural land, farmhouse, or any type of plantation property in India. RBI does not put restrictions as to the numbers of residential or any commercial property purchased by NRI in India. These properties of NRIs are an easy target for illegal possession as NRIs do not visit India frequently. Thus they fail to take care of their properties and in their absence, their property is encroached upon by illegal occupants.  However, NRIs must take care to safeguard their property from any dispute or illegal possession by taking necessary preventive measures.

What Is NRI Property Dispute

When an immovable property is acquired or purchased by a Non-Resident Indian (NRI) in India, such a property is described as NRI Property. A Non-Resident Indian is an Indian citizen residing outside India.

Types of NRI Property Disputes

By the virtue of inheritance, joint ownership with relatives, or because of genuine investment in property in India to remain connected to the roots of India, NRIs become the owner of these properties. However, NRIs are not physically available to look after these properties and that leads to a lot of legal disputes.

Following are the types of disputes pertaining to the property of NRIs.

  • Often disputes arise in the property of NRIs from the legal heirs or other joint owners of the property.
  • Disputes arising out of easement rights.
  • Illegal or unauthorized possession by any third party.
  • Encroachment on the property by false documents or false representation by the seller.
  • Registered Will being challenged by a family member in court.
  • Power of Attorney being misused for carrying out fraudulent transactions.
  • Disputes arising out of partition or family settlement.
  • Disputes arising out of landlord-tenant, where NRI is the landlord
  • Adverse possession where a caretaker or any third party occupies the property for a continuous period of 12 years and it is within the knowledge of NRI. This will lead to adverse possession by such a third party or caretaker.

Steps To Be Taken When The Property Has Been Encroached

  • Police Complaint: The police complaint can be made with proper original documentation of the property to the nearest police station. In this matter, the Specific Relief Act, 1963 (Article 5 and Article 6) can provide back the possession to the actual owner.
  • Negotiation: The negotiation can be done with the person who has encroached on the property for the court settlement and it can be done with some legal advice.
  • Professional Help: On filing a complaint at the police station, it is advised to take the help of any legal professional for getting back the possession of the property.

Safeguarding NRIs Property To Avoid Dispute

The NRIs being away from their native place should ensure that the property is safe and out of any legal disputes or illegal possessions by taking preventive measures.

  • NRIs must keep all the original documents such as a deed, copy of a will, original purchase documents of the property handy.
  • All the required papers and original documents such as an agreement for sale, title deeds, shall be regularly updated in the government land records department. Additionally, the receipts of any tax paid on behalf of the properties such as municipal tax, electricity bill, or water bills shall be kept by the NRIs.
  • In order to prevent any physical encroachment by any third party or sale of the property to a third party, NRI can fence or build a boundary on his vacant plot. They can also put an ownership board which will be indicative of the right of the property. 
  • A notice pertaining to the ownership of the property can be published by the NRI owner in the local newspaper. The original publisher of the notice or a copy of it must be retained by the NRI for future purposes.
  • NRIs can take the help of professionals where several organizations offer protection of the property on behalf of the NRI, in return for service commission. 
  • NRIs must stay in touch with the neighbors of the locality in which their property is situated so that they will be aware of the current circumstances or activities in that locality. 
  • NRIs can hire a caretaker for their property as, despite a long period of possession, a caretaker cannot acquire the property. 
  • Before renting the property to a tenant NRIs must take care of checking the background of the tenants by doing proper verification. There must be a proper rent agreement before renting the property to the tenant.

Applicability Of Taxes

As mentioned earlier, RBI puts no restrictions on owning the number of properties by NRI. The Income Tax Act 1961 makes provisions for certain tax deductions that are available to NRIs while investing in properties in India. Like any other citizen of India, NRIs can also claim deductions under Section 24 and 80C of the Income Tax Act.

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FAQs On NRI Property Issue

Yes, NRIs can bequeath property to their legal heir or any one of their choice by a Will.

Yes, an NRI is free to inherit immovable property from another NRI be it residential or commercial.

An NRI can buy agricultural land provided they have obtained RBI’s permission for purchasing such property.

Yes, NRI can give residential and commercial property to a person residing in India, or another NRI. However, if the property is agricultural land, plantation property, or a farmhouse, it can only be gifted to a citizen of India residing in India.

No, it is not advisable for NRIs to file property dispute cases anywhere else other than the jurisdiction where the property is located. Only the court in that jurisdiction can try a property-related case.

A non-resident person can acquire immovable property by way of a gift from a resident Indian and a person residing outside India.

Yes, NRIs can file a case in India. You just have to be present in the court only to record your statement.

How Lead India Can Help You:

  1. Trustworthy & Confidential - We assure you that all your personal details & documents must be kept private. We never share these details with anyone.
  2. Expert Advice – With the help of the best lawyer you can draft a civil suit pertaining to the dispute relating to the property.
  3. Zero Stress - You do not have to worry about the paperwork & complex process at the court. Our Associate will perform all these actions at the court. 
  4. Top Quality Lawyers - Lead India will help you to choose among the best civil lawyers for drafting and filing a civil suit for any unauthorized or illegal possession of the NRI property. There are different associates who work with us, you can choose a lawyer depending upon their practice area, experience & user rating. 
  5. Track Your Case - We provide you the opportunity to track your cases from the online dashboard. You can easily track your case status, payment status, etc.

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