5 Indian Real Estate Laws You Should Know
The market dip that the real estate sector has experienced can be attributed to its outdated and medieval laws in the Indian law system. It’s the reason why the central government compiled and passed the Real Estate Regulation and Development Act, 2016. The new laws are expected to change the face of the real estate sector. Experts believe that the government hasn’t properly introduced certain sections of the act and it might take some time to charge up the positive effects of these reformations. We have composed a list of five important real estate laws that every Indian realty buyer should be aware of.
- The Real Estate (Regulation and Development) Act 2016 makes the realty developer responsible for any damage found in the property within five years of the buyer’s ownership. The developer will be legally accountable to fix the problem without charging the buyer. This has to be done within 30 days of the notice or else the developer has to compensate the buyer.
- The Real Estate Act 2016 also binds the buyers with a penalty if they do not conform to the orders of the Real Estate Regulatory Authority. The customer will have to pay a penalty charged day-wise of the non-compliance period. The fine can go up to 5 percent of the property price.
- Landlords and property owners cannot enter the property of their tenants without a written notice in 24 hours. The notice is also applicable to the case where the landlord wishes to renovate the property. According to experts , this is in accordance to the Draft Model Tenancy Act 2015.
- The Foreign Exchange Management Act (FEMA) orders overseas companies to produce a declaration to the Reserve Bank of India within a 90-day deadline when they book a property. Reimbursement of the same while selling will need the bank’s authorization in advance.
- As per India real estate laws, Non-resident Indians (NRIs) and people of Indian origin (PIOs) are free to invest in residential or commercial real estate without any limitations. However, NRIs have to seek RBI’s permission when it comes to the purchase of a farm house or a piece of agricultural land.