Understanding Real Estate Property Laws for Buyers in India

Many of us constantly think about the beautiful idea of buying a property. Still, it often becomes daunting when we get into the process. The challenge lies in the fact that most people need to be better versed in the residential real estate laws applicable to buyers in India.

This blog aims to guide you through the crucial property law in India that can prove invaluable when planning a property purchase. Understanding these laws is essential to navigate the intricacies of the buying process and ensure a smooth and lawful transaction.

So here are the Real Estate Laws In India,

1. Real Estate (Regulation and Development) Act (RERA) 2016:

Have you ever wondered how to avoid or what to do if there is property fraud or project delays? The role of RERA comes here. RERA, enacted in 2016, is a game-changer for homebuyers. It ensures transparency and protects buyers from unscrupulous practices. For instance, if a developer promises possession within a specific timeframe and fails to deliver, RERA provides a legal avenue for buyers to seek redress.

2. Transfer of Property Act, 1882:

Transfer of Property Act 1882 is a crucial property law in India specifying transfers’ legal requirements. It provides for both parties’ rights and liabilities. Property transfer can be in the form of a sale, gift, mortgage, or lease. Additionally, the Act applies to both movable and immovable property. Consider a scenario where you gift your property to a family member. The Act outlines the legal process, ensuring the transfer is valid and binding.

3. Indian Contract Act, 1872:

When you buy a property, you contract with the seller. The Indian Contract Act of 1872 is the legal backbone governing such agreements. Under this Act, there are multiple provisions like, “The offer and acceptance rule, Intention to create legal connections, Free consent and the capacity of parties etc”. For instance, if the seller fails to meet the agreed-upon terms, this Act provides remedies for breach of contract.

4. Registration Act, 1908:

Registering your property under the Registration Act of 1908 is crucial. Registering your property according to the Registration Act of 1908 is essential as it imparts legal validity to your ownership. The primary objective of the Registration Act is to establish a public registration process for documents, offering information about legal rights and responsibilities related to a specific property. Additionally, it aims to preserve documents that could have future legal significance and serves as a preventive measure against potential fraud. Picture this: You buy a property but forget to register it. Without registration, your claim to ownership may face challenges in a legal dispute.

5. Stamp Duty Act:

The state government imposes stamp duty as a tax on property sales and ownership. The property’s value determines the duration of the stamp duty during registration. It fluctuates based on factors like the property’s location, whether it’s a new or old house, and the regulations specific to each state. If you purchase a house, the Stamp Duty Act ensures you pay the relevant tax corresponding to the property’s value. It’s crucial to be well-informed about the distinct rules applicable in your region since each state has its own set of rates, even if your registration falls under ancestral property law in India.

6. Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013: 

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, is a legislation enacted by the Indian Parliament to govern land acquisition. This property distribution law in India provides the procedures and regulations for offering compensation, rehabilitation, and resettlement to individuals affected by land acquisition in India. The Act is designed to ensure equitable compensation for those losing their land, enhance transparency in acquiring land for constructing factories, buildings, or infrastructure projects, and guarantee the rehabilitation of affected individuals. For instance, in a scenario where your land is acquired for a highway project, this Act guarantees that you receive just compensation and support for rehabilitation.

7. Indian Easement Act, 1882:

Section 4 of The Indian Easements Act of 1882 defines the easement concept. This is one of the most important property distribution laws in India. As per this section, an easement is a basic right held by the owner or occupier of one piece of land over another that does not belong to them, facilitating the advantageous use of their property. This right is granted to enable the full enjoyment of one’s property. It encompasses the authority to perform or perpetuate certain actions or to hinder or continue to hinder certain actions in connection with another piece of land not owned by the individual to enhance their property. To understand better, if you have the right of passage over your neighbour’s land to reach your property, this Act ensures the legal validity of such arrangements.

Guide To Buying Property In India

Research & Budget:

Real estate in the digital age is easy as research can be done thoroughly. Post research and finalisation of the property type & location, you can determine your budget.

Legal Verification:

Confirm property ownership, check for clear titles, and ensure no legal disputes.

Due Diligence:

Physically inspect the property and verify land-use regulations.

Sale Agreement:

Draft a sale agreement outlining terms, including price and possession date.

Documentation:

Collect necessary documents like sale deeds, property tax receipts, and NOCs.

Stamp Duty and Registration:

Pay stamp duty and register the property at the local sub-registrar office.

Payment and Possession:

Follow the payment schedule, take possession, and transfer utilities to your name.

Post-Transaction:

Update property records and transfer bills to your name.

Legal Assistance:

Consider hiring a legal advisor or property consultant for guidance

Putting it All Together:

Understanding these laws is like having a roadmap for your property-buying journey. Let’s walk through a hypothetical scenario to illustrate the interconnected nature of these laws: You decide to buy a flat from a renowned developer. RERA comes into play here, ensuring the developer has obtained all necessary approvals and is accountable for the promised possession date. You sign a contract with the developer outlining the terms of payment and possession, which falls under the Indian Contract Act. When it comes to finalising the deal, the Registration Act steps in. You register the property in your name, providing legal proof of ownership. Remember the Stamp Duty Act; paying the applicable stamp duty is crucial to the registration process. Suppose the property was part of the government’s larger land acquisition plan. In that case, the Right to Fair Compensation Act ensures that the landowners are justly compensated and assisted in rehabilitation. However, suppose you are getting the property from your family. In that case, the property inheritance law in India, “The Indian Succession Act, 1925”, comes into the picture.

Unlock peace of mind in your property choice by opting for RERA-approved projects. Sterling Developers in Bangalore have received RERA approval for all its projects, ensuring a secure investment. So, no more waiting; choose Sterling Developers for your dream home and experience quality assurance and legality. 

FAQs

1.How property is divided in family law in India?

In India, property division in family law is guided by personal laws based on religion. For Hindus, it’s governed by the Hindu Succession Act; for others, it depends on their respective religious laws. The division typically includes assets acquired during marriage; each family member is entitled to a share.

2.What is the legal process of buying a house in India?

Purchasing a house in India involves several steps. First, conduct due diligence on the property. Then, draft and sign a Sale Agreement. Pay the token amount and complete the necessary paperwork, including property registration. Finally, transfer the ownership through a Sale Deed and ensure all payments are made per the agreed terms.

3.What are the rights of owners of property in India?

Property owners in India have several rights, including the right to possess, use, lease, sell, and transfer their property. They can also legally challenge any infringement on these rights. However, these rights are subject to certain restrictions and regulations per local laws.

4.What are the legal rights of property?

Legal property rights encompass ownership, possession, enjoyment, and the right to dispose of the property. It also includes the right to exclude others from the property. These rights are protected by various laws, and any violation can be addressed through legal channels.

5.What is the Article 300 A right to property?

Article 300A of the Indian Constitution abolishes the right to property as a fundamental right. It states that no person shall be deprived of his property save by the authority of law. While the property right is no longer a fundamental right, it still holds legal significance, and any deprivation must be by established legal procedures.