Property Ownership and Regulations for NRIs

Properties owned by Non-Resident Indians (NRIs) in India are regulated under the Foreign Exchange Management Act (FEMA). The Reserve Bank of India (RBI) has issued specific guidelines that allow NRIs to purchase residential and commercial properties in India. However, they are prohibited from purchasing agricultural land, plantation property, or farmhouses in India.

Under RBI regulations, there is no restriction on the number of residential or commercial properties that an NRI can buy.

Common NRI Property Issues in India

While owning multiple properties, NRIs often face challenges, especially when properties are left vacant or under the care of caretakers. These properties are prone to illegal possession due to the long absence of the NRI owners. Here are some common issues NRIs face:

1. Disputes from legal heirs or joint owners.
2. Easement rights disputes.
3. Unauthorized or illegal possession by a third party.
4. Property encroachment using forged documents.
5. Challenges to a will by a family member in court.
6. Misuse of Power of Attorney.
7. Partition disputes.
8. Disputes arising from family settlements.
9. Landlord-tenant disputes, especially when the NRI is the landlord.
10. Adverse possession, where a tenant or caretaker occupying the property for 12+ years (with the knowledge of the NRI) claims ownership.

Preventive Measures for NRIs to Safeguard Property in India

Given the geographical distance, NRIs must adopt preventive measures to secure their properties and avoid disputes. Here are some effective tips:

1. Preserve Original Documents:
   • Keep all original property-related documents, such as the will, sale deed, and purchase documents.
   • Ensure these documents are updated with the government land records department.
2. Maintain Bills and Receipts:
   • Retain all receipts of property taxes, electricity bills, water bills, municipal taxes, etc., to prove ownership and compliance.
3. Secure Vacant Land:
   • Fence or build a boundary around vacant plots.
   • Display an ownership board to deter encroachers.
4. Public Notice of Ownership:
   • Publish a notice in the local newspaper claiming ownership of the property and keep a copy for future reference.
5. Property Protection Services:
   • Hire organizations offering property management and protection services for NRIs in exchange for a service commission.
6. Stay in Touch Locally:
   • Maintain good relations with neighbors or appoint a trusted friend/relative to check on the property periodically.
7. Tenant Verification:
   • Rent out the property only after proper tenant verification and signing a legally binding rental agreement.
   • Ensure that no tenant stays continuously for 12+ years, as this could lead to adverse possession claims.

By following these measures, NRIs can minimize risks, safeguard their properties, and handle legal challenges effectively.