How to avoid property disputes

  • Prevent property disputes

Property disputes of NRI have arisen exponentially over the time in India. Most of these disputes are either family succession disputes or these are cases of fraud practices of builders, property dealers and real estate agents. In certain parts of India, property prices have been steadily rising in this decade. Property has become major cause of NRI litigation in India. Property disputes give rise to protracted and long drawn cost which results in tremendous agony to the NRI. The problem in property disputes is that the law allows the party which is presently in possession, although illegal possession, to remain in possession during the pendency of litigation. There is no fixed time-period prescribed by law within which a dispute must be decided. Many a times people make false wills, forge documents and grab property of NRI by illegal means. The legal system in India becomes major reason for NRI apathy. In some cases false FIRs are registered against NRI so that they do not enter India without being arrested. This is done to grab their property. The courts which are overburdened with cases do not give redressal to NRI in time. In cases where stakes are very high, even alternate dispute resolution mechanisms like arbitration and conciliation fail. The rich try to win by any means possible to establish their dominance. They are sometimes successful because government officials act in tandem with them. In such cases, NRI suffer economically as their hard earned money vanishes in thin air. Even when court decides in favor of NRI, they do not get back the litigation expenses which are substantial.

In such circumstance, it is best to prevent property disputes in the first place than to seek justice later. The best ways in which NRI can prevent property disputes are:-

1. Title Search – A person who has title to property in government records owns it. Only owner can sell or authorize to sell his own property. Once negotiations start, we get a copy of all the documents supporting title of seller. We send our professionals to inspect government records. We conduct title search for last 33 years, as this is a standard followed by banks in India. Not only proper description of seller, but also proper description of property itself is verified. We also check who is in possession in fact, get affidavits from seller that no previous agreement to sell exists in relation to the same property, get antecedents of seller verified in property market, investigate about property from adjacent property owners. We also verify physical location of the property, whether there was any dispute of property at any time, whether any part of property has been encroached, CLU requirements are complete or not, . After this we give our own title search report to the buyer. We also guide NRI clients on how to protect their wealth from disputes regarding ownership which may arise before, during or after the transfer of property. The problem increases exponentially in case of co-sharers and co-owners. NRI also suffer if after agreement to sell, the seller refuses to transfer property and pay back earnest money also. In case, property has been acquired by seller through will or gift, such property may also come under challenge from third parties who have interest in such property. In case of NRI, taxation issues also become problem area as TDS amount is added to sale price.

2. Be wary of builders – Builders do not give possession in time. They make excuses that this is because of several regulatory issues. However, they are able to protect themselves because of clauses they have added in their contracts. We suggest our NRI clients to get the terms of contract verified from a lawyer before you pay any money or sign any contract. Builders and developers sometimes also do not have possession or even ownership of land on which they propose to make flats. This way they cheat innocent NRI with flashy advertisements. Builder indulge in yet another form of malpractice – they sell the same flat to several persons who then pay for construction of same flat to builder. Ultimately case goes to court. We check that builders have necessary government permissions, CLU, title possession and ownership, inspect government records, conduct physical surveys. We also check court records and any pending or decided civil and criminal matters against the builders. We ensure that builder is not a small time start-up which has suddenly sprung up to cheat NRI of their hard earned money. In case the builder is already facing financial crisis, we do not suggest that NRI should do any dealing with them. Sometimes, builders lure NRI by stating that during construction, they will pay rent to NRI. Later, builders refuse to do so and grab the money already paid to them. Even post-dated cheques given by builders to NRI are of no help. In such cases, consumer courts are of help, but again, LexLords believe in prevention, not cure. Property being sold at heavily discounted prices to NRI must be avoided at all costs.

3. Inherited property – Family members show their worst part in property cases. NRI are often divested of their share of ancestral property by those present in India. Not only that, in case NRI buy inherited property of a person, litigation may ensue. Further, property may be transferred to NRI but the original owner might have got it by virtue of will. What if that will is challenged? LexLords conduct the entire due diligence before property is transferred to or by our NRI clients. We check name of seller, how property was transferred in his name, terms of will, letters of administration and probate, whether property was self earned or ancestral. We also check succession laws in case a person has died intestate and property in question now belongs to his successors.

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