Overview

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.

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.

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.

FAQs On NRI Property Issue