Understanding the Essential Real Estate Laws and Regulations
To ensure a smooth property purchase in India, it is crucial to familiarize yourself with the pertinent real estate laws and regulations. These regulations are governed by both state and central laws, and comprehending them is vital before making any property transactions.
Real estate encompasses all aspects related to land and buildings, including residential and commercial properties. There are various property laws and acts that must be taken into consideration prior to buying a house. This article provides an overview of the key factors to consider under the new property rules.
Property Laws in India:
The real estate regulations in India hold significant influence over all property-related dealings taking place within the country. These laws and policies are determined by the state and central governments of India, periodically.
According to the Property Act, immovable property refers to land, its associated benefits, and anything permanently attached to or fastened to the land. The Real Estate Regulatory Authority (RERA) is responsible for governing the marketing, sale, and development of real estate projects in India.
Given that land is defined in the Indian Constitution, property laws in India fall under the purview of relevant property acts and laws. As per the Indian Constitution, “land” is listed in the State List of the 7th Schedule, which grants the states the authority to legislate on land agreements. However, contracts related to non-agricultural land fall under the Concurrent List of the 7th Schedule, enabling the central government to legislate on these matters. Consequently, numerous real estate laws exist in India, making it essential to consider them before purchasing a house.
Real Estate Laws and Regulations in India
Outlined below are some fundamental real estate laws in India that every prospective homebuyer should be aware of prior to purchasing a property:
1. Registration Act, 1908, and India Stamp Act, 1899
These acts define the legal requirements for registering various deeds, instruments, and documents necessary for the transfer of immovable property to interested parties. They ensure proper documentation and payment of stamp duty for property transfers.
2. Real Estate Regulatory Authority or Real Estate Regulation and Development Act (RERA), 2016
Enacted in 2016, the Real Estate Regulatory Authority Act ensures the regulation, marketing, sale, and development of real estate projects. This act safeguards the interests of property buyers. It is mandatory for developers to register all real estate properties under this act to ensure their validity. Different state governments have established their own RERA authorities to oversee the implementation of this act.
3. Rehabilitation and Resettlement Act, 2013
This act regulates land acquisition by the government and establishes procedures and rules for granting compensation, rehabilitation, and resettlement to affected individuals in India. In the event beneficiaries are dissatisfied, they may seek legal remedies through the appropriate authorities.
4. Transfer of Property Act, 1882
The Transfer of Property Act, a central act, governs ownership of immovable assets such as land, encompassing loans, exchanges, gifts, mortgages, leases, etc. Any property sold by a seller and purchased by a buyer falls under this act.
5. Indian Contract Act, 1872
This act governs contracts in India, covering their execution, implementation, remedies, and breaches. The sections included in the Transfer of Property Act form part of the Indian Contract Act.
6. Foreign Exchange Management Act, 1999
The Foreign Exchange Management Act (FEMA) was introduced for non-residents of India who wish to purchase land within the country. The act regulates foreign investments made in the real estate sector, in accordance with the Foreign Direct Investment (FDI) policy.
Can an NRI Buy Residential Property in India?
Certain restrictions apply to individuals seeking to purchase residential property in India while residing abroad. Three categories of people fall under this classification:
- Non-resident Indians
- Indian-origin foreign nationals
- Non-Indian origin foreign nationals
Non-resident Indians and Indian-origin foreign nationals are permitted to own residential property in India inherited by them. Non-Indian origin foreign nationals, however, are not allowed to purchase residential properties. These laws apply to both residential and commercial properties, as foreign companies are prohibited from directly acquiring land in India.
By familiarizing yourself with these essential real estate laws and regulations in India, you can make informed decisions when purchasing properties and ensure a legally sound transaction.
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