Dos and don'ts for NRI property buyers (learned the hard way)

After enough years of doing this, you start to notice that NRI property problems aren't very original. The same five or six mistakes turn up again and again, just in different cities and with different relatives involved.

None of them happen because people are careless. They happen because buying from abroad means trusting more, checking less, and doing things in a hurry during a two-week trip home. So here's our list. Some of it is obvious. Some of it we wish someone had told our clients sooner.

The scenarios below are illustrative, pieced together from the kinds of situations we see. The lessons are real.

The dos

Do check RERA registration yourself

Not a screenshot from the sales team. Not "it's applied for." Go to the state RERA website, type in the project name, and read what's there. The registration number, the promised completion date, the quarterly progress updates, any complaints filed.

It takes fifteen minutes. If the project isn't registered and it should be, that's the end of the conversation.

Do get the title checked by a lawyer you appoint

Picture a couple in Singapore buying a resale flat in Pune. The seller is friendly, the price is fair, and the seller's own lawyer has "already done the title search." Six months after registration, a distant relative of the original owner files a claim on the property.

A title search is only as good as the person doing it and who they work for. Hire your own lawyer. Ask for a written title report covering at least the last thirty years where records allow, plus an encumbrance certificate.

Do pay only through banking channels

Every rupee should move from an NRE, NRO or FCNR account, or come in as an inward remittance from abroad, and go straight to the developer's or seller's bank account. Not to an agent. Not to a "collection partner."

This isn't just about safety. If you ever sell and want to send the money back abroad, the bank will want to see where the purchase money came from. A clean banking trail makes that easy. Cash makes it nearly impossible.

Do keep every single receipt

Booking receipt. Instalment receipts. Bank statements showing the debit. The stamp duty challan. Your loan statements. Keep them together, in one folder, with a scanned copy in the cloud.

It feels excessive when you're buying. It feels wonderful twenty years later when you're selling, and your CA asks you to prove the cost of acquisition.

Do use a specific power of attorney

If you can't be in India for registration, you'll need someone to act for you. Give them a specific POA that names the property, the transaction and what they can sign. Nothing more.

A POA signed abroad needs to be attested at the Indian embassy or consulate, or apostilled if the country is part of the Hague Convention. Once it reaches India, it usually has to be stamped (adjudicated) within a fixed period. Check the timeline with your lawyer before you post it.

Do visit, or send someone who will be honest with you

A video tour can show you the flat. It can't show you the open drain, the noise from the flyover or the fact that the "nearby school" is forty minutes away in traffic. Go yourself if you possibly can. If you can't, send someone who'll tell you what they actually think.

The don'ts

Don't pay cash, for anything

Not the booking amount. Not the "small adjustment" to close the deal. Not the agent's fee. Cash payments have no legal standing, can't be repatriated, and if they're part of the property price, they mean you're under-declaring the deal. That leads straight to tax problems for you, not just the seller.

Don't sign blank pages

It sounds silly when written down. It happens all the time. A relative or agent says, "Just sign these, we'll fill them in later, it saves you a trip." Please don't. Read every page you sign. If it's blank, it stays unsigned.

Don't trust the brochure render

Brochure images are artists' impressions. The trees are fuller, the sky is bluer, and the neighbouring building has mysteriously disappeared. What you're legally buying is described in the agreement and its specifications annexure. Read that instead.

If a feature matters to you - a balcony facing the park, a particular brand of fittings, a clubhouse - make sure it's written in the agreement. If it isn't written, it isn't promised.

Don't ignore the circle rate and stamp duty

Every state sets a minimum value for property in each area, called the circle rate, guidance value or ready reckoner rate depending on where you are. Stamp duty is charged on the higher of the circle rate and the actual deal value.

Sometimes a seller suggests registering the property at a lower value "to save stamp duty." Don't. It creates a gap between what you paid and what's on paper, which can cause trouble with the tax department for both of you. And when you sell later, a lower recorded purchase price means a higher capital gain on paper.

Don't let a relative hold the property "for convenience"

This one is the hardest to talk about, because it involves family.

Imagine a software engineer in Toronto who buys a flat in Hyderabad but registers it in his brother's name, because the brother is in India and it seems simpler. Ten years on, the brother has married, has children, and his family has every reason to see the flat as theirs. Nobody behaves badly, exactly. But nobody is quite sure whose flat it is either.

Property held in someone else's name, paid for by you, can run into the law on benami transactions. More practically, it can quietly destroy relationships. Buy in your own name. If you need help on the ground, give a specific POA, not ownership.

Don't skip the paperwork on possession

Don't take the keys without an Occupancy Certificate. Don't leave without a snag list signed by the developer. And don't forget to have the property mutated in your name with the municipality and the utilities transferred. These small steps are what make you the owner in practice, not just on paper.

Don't treat a sale as simple

When an NRI sells, the buyer has to deduct tax at a higher rate than for a resident seller, under a different section of the tax law. Many buyers and their agents don't know this. Plan with your CA well before you list the property, not after an offer is on the table.

A quick comparison

Most of the trouble we see could have been avoided with one honest conversation at the start. If you'd like to have that conversation before you commit, an NRIVEST advisor would be glad to talk it through.

Property, tax and FEMA rules change from time to time. Please confirm the current position with a qualified CA or property lawyer before you act.