That 182-day rule --- again!

Nick-H

Oh! I just did some sums and realised that I spent 217 days in Inda in 2005 tax year (1 April to 29 June plus 8 November to 16 March)

During that time I had the tenancy of my current home, and was engaged to be married to Mrs N --- we married in Dec 05, so I guess I can show that I had intention of staying in India for reason other than tourism.

So... If I intend to buy property*:

I have to apply to RBI for permission, based on my residence, to do so?

Is this a general permission, or does it have to relate to a specific purchase?

How long does the application take to be processed?

Experiences please.......

*which I do: we are in final negotiations for a house right now.
--- It isn't a big deal if I can't buy this house in my name; it will be in Mrs. N's name.

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Just one member of the IndiaMike Mod Team

AnnieG

Get a lawyer, quick.
We bought a house and it took about a year, but that was mainly to do the searches on the history of the ownership.
Our lawyer took care of the RBI permission, I think.
Annie

__________________
AnnieG

Live life to the full - you never know what's around the corner.

Nick-H

A Year! Blimey!

Our seller is expecting that everything will take just a few days!

In fact he is upset that we want to spend so much time with lawyers. No: he is not a dishonest man, just doesn't know much about buying/selling houses.

We got a lawyer. And an accountant.

Anyway, we will proceed quickly, in Mrs N's name this time. I'd love to have my name there, but it is just symbolism, and will just complicate the deal.

AnnieG

The thing that will hold things up is clear title. If you have been shown documents going back 10 generations (that may be an exageration but not much) then it won't take long.
In Goa was was about 200 years.
The reason is that if you don't have clear title, then a descendant can come out of the woodwork at any time in the future and lay claim to the property. And you'll have a devils job selling it without clear title.
Mind you, this might be Goan law and not apply in Chennai or wherever you are.
But a good lawyer is the key.
Annie

Nick-H

I think what you say is very true about property anywhere in India.

In our case, the property documents only go through about two or three sales, the property is registered and we have an up-to-date Encumberance Certificate.

In a way it is to our advantage that the guy has a mortgage, which we know about. It means that the bank thought it was a safe bet for a loan.

I don't know how it is in Goa... our lawyer told us that full registry searches are routine in Bombay, but the state of Chennai register offices makes them impossible

Also it seems that escrow, or holding of deposits in client accounts is something that only happens here for big corporate stuff: so there is an extent to which we just have to trust the guy we are buying from with a certain amount of our money. Which is scary. Very scary.

Now... I have no doubt that this guy is an honest gentleman; no doubt at all. But this is the first time I've ever had to invet hard cash in my character judgement!

We get our lawyer's response to a copy of the documents tomorrow morning. And her advice on if and hwo to proceed next.

bellcrank

Nick - I would suggest (if it's not too late) to obtain a nil-encumbrance cert, which means that the seller has discharged any borrowings and back that up with a letter from the lender, before executing any sale deed. An agreement for sale document will require a deposit, but that can be anything in reality.

Also, suggest on a personal cheque for completing the sale, rather tha a suitcase full of cash - if the seller is not agreeable, then suggest payment by demand draft providing the seller pays or at least contributes to the cost (the fees can be hefty).

capt_mahajan

mortgage: though much better, is not a hundred percent secure. i went through a scenario where the mumbai registry office stopped registering sale of a flat i had bought (when i wanted to sell it) because there was a ten year old dispute between the municipal corp of mumbai and the builder. this, after a mortage from the most reputed bank then and after i had held the property for fifteen years, buying from the builder directly.

trusting the seller: the way to do this is a one shot deal. all the money (except a token amount of 10/20000 rupees initially) is paid at one shot, and possession of the empty property and all the documents taken simultaneously. this is done at the property itself. you check it is clear of occupants, your lawyer checks all documents, and you handover the money.

that way, you have the property in your hand at the same time as you shell out the money, and should occupy it, change the locks etc and move in some furniture at least as quickly as possible.

oh, and register the property in your/mrs nick's name asap, for which both you and the seller probably have to go to the registrar. usually, the requirement that the seller agrees to do this is in the sale agreement itself.

all the best.

Nick-H

Encumbrance certs to date we have, although I realise that this has to be absolutely up to date before the sale takes place.

There is no way I would carry that much cash around, in any country in the world! A cheque would certainly be most secure from our standpoint, but I could understand if the buyer objected. As seller I certainlky wouldn't accept a personal cheque! So, I suspect that it will be DD. Hadn't thought of the fees, we'd better ask the bank on that one.

We should see the lawyer this morning. If her view of title is OK (and I think it will be) we will ask her advice on payment terms. The guy needs some time to move, and there is, of course, no way that we will part with major cash until, Atleast the property is registered in our name.

But we have to pay some advance, so some measure of blind trust seems to be necessary.

One possibility our lawyer mentioned in passing is that we pay the mortgage, and have the bank deliver the original deeds to us. Anyway, more discussion with lawyer today. She said to us, 'it is my job to be a pessimist'...

We also have the benefit of the watchful eye of a man who has been in property and building deals, from houses to multi-crore hotels, for many years.

What no-one knows, though, because they have not encountered it before, is the stuff relating to foreigners. We'll forget it at least this time, and go ahead in my wife's name.

My experience of people who offer services to expats here is that they charge what the expats would pay at home --- or more! We can do without that kind of expense.

a_f_d

To quote the RBI:
A person resident in India is defined under Section 2 (v) of the Foreign Exchange Management Act, 1999. RESERVE BANK OF INDIA DOES NOT DECIDE RESIDENTIAL STATUS AND IS DETERMINED BY THE OPERATION OF LAW. However, the onus is on the individual to provide his/her residential status.

So you can't apply to them for permission, they don't give it. Which is one of the reasons that Goan ministers have been claiming that most FN purchases here were in breach of FEMA.
If you're not in Goa you shouldn't have any problem (and in your case I think you can get a PIO card soon?).

AndyD 8-)#

Nick-H

...moved on from that position long ago; have had PIO for more than one year now.

Even so, we still did the house purchase in my wife's name.