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FAQ:--

How to Check Property Agreement
chk property

1) DOES THE AGREEMENT FOR SALE HAVE TO BE REGISTERED?


The agreement for sale between the builder and purchaser has to be registered as required by the law of the land. One must register within four months from the date of execution of the Agreement at the office of the Sub-Registrar appointed by the State Government, under the relevant Registration act.

2) UNDER WHOSE NAME DO I PURCHASE THE STAMP PAPER AND WHO PAYS THE STAMP DUTY DURING A TRANSACTION OF BUYING AND SELLING?

The Stamp paper is generally purchased in the name of the executor to the agreement. Generally, the buyer pays the Stamp duty unless agreed otherwise.

3) DOES THE PROPERTY HAVE TO BE INSURED?


You will have to ensure that the property is duly and properly insured for fire and other appropriate hazards, as required by banks / financial institutions with whom you may wish to mortgage the property, during the pendency of loan. In such cases, the beneficiary of the policy will be the concerned institution offering the loan. Even otherwise, it is advisable to insure your property for hazards and fire.

Loan Process and Eligibilty
loan process

4) WHAT IS THE LOAN AMOUNT WHICH CAN BE SANCTIONED?

Banks / financial institutions sanction loan amounts based on certain criteria depending upon your repayment capacity (which takes into account your age, qualifications, assets, liabilities, stability of occupation, savings history) and according to your income. You can include income of other members in your family too, in case you want to increase the amount of your loan. The maximum loan that can be sanctioned varies with housing finance companies. Generally, the maximum loan amount is 80 to 85% of the cost of your home.

5) WHAT IS MEANT BY AN EMI (EQUATED MONTHLY INSTALMENT)?

An EMI is the monthly amount to be repaid to the bank or financial institution against a loan amount borrowed for a fixed period of time. An EMI has two components, the principal component and the interest component. There are two methods - reducing balance method and the monthly reducing balance. The Reducing Balance method reduces the principal amount already paid from the outstanding loan amount. Every time you make a payment, you pay interest on that part of the original principal sum that has remained unpaid till then. The loan carrying the lower EMI for the same tenure is the cheaper option.

6) WHAT IS PRE-EMI INTEREST?

Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of EMI.

7) WHAT IS A FLOATING INTEREST RATE?

A loan taken on a floating interest rate, is a loan where the interest rate which is payable is linked to the market rate. e.g. the bank lending rate. The interest rate payable by you will also rise and fall as per bank lending rates which may also fluctuate.

8) WHAT IS A HOME IMPROVEMENT EXTENSION LOAN?

A home improvement loan is one that is made available to do external works like structural repairs, waterproofing or internal work like tiling and flooring, plumbing, electrical work, painting, etc. A extension loan is one which helps you to meet the expenses of any alteration to the existing building like extension/ modification of your home. One can avail of such a loan facility of a home improvement/extension loan, after obtaining the requisite approvals from the relevant municipal corporation/building authority.

9) WHAT IS AN ANNUAL REST?

Interest is calculated on annual rests. The effective rate of interest varies depending on the term of the loan. For a loan with a term of 15 years, the effective interest rate would be higher by a very small percentage (in terms of a fraction) per annum than the indicated rate of interest.

10) DO BANKS / FIS ASSIST ONE IN SELECTING PROPERTY / BUILDING / FLAT OF ONE'S OWN CHOICE?

Yes, certain banks / FIs have approved builders and developers and will assist you in of your choice.

11) WHAT SECURITY DOES ONE PROVIDE AGAINST THE LOAN AMOUNT TO BE BORROWED?

Generally, by way of deposit of title deeds and/or such other collateral security as may be necessary. Additionally, if the property is under construction interim security may be required. Collateral or interim security could be assigned to the Bank/ FI where the surrender value is at least equal to the loan amount. It could be other forms of guarantees or pledge of shares acceptable by the bank / FI. One should ensure that there is no existing mortgage or loan or litigation which can affect the title of the property. The title should be clear, marketable and free from encumbrances.

12) CAN ONE REPAY THE LOAN AHEAD OF SCHEDULE?

It is possible to repay a loan ahead of schedule. A form of a penalty termed as a pre-payment penalty is payable to certain institutions.

13) HOW DOES ONE GET A TAX BENEFIT ON THE LOAN?

There is eligibility for certain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. Moreover, you can get added tax benefits under Sec 88 on repayment of principal amount.

Flooring Types
flooring

14) HOW WOULD YOU COMPARE THE QUALITIES OF PLYWOOD?

Plywood generally holds nails and screws better than oriented strand board. Plywood also holds up better if it gets wet.

15) WHAT IS THE BEST KIND OF FLOORING TO CHOOSE?

Your flooring choice will depend on your preferences, your budget, and where you are going to install it. Here are some of the main choices:

a) Vinyl tile squares: The least expensive type of flooring, vinyl tile comes in a wide variety of colors and patterns. Since it is impervious to water, relatively easy to clean and quick to install, it is commonly put down in kitchens and bathrooms. As vinyl tile gets old it tends to fade and discolor. It is easily scratched or cut, but individual squares can be removed and replaced.

b) Vinyl sheet: Prices range significantly depending on quality. Vinyl sheet flooring is often selected because of attractive patterns and because it covers a large area with no risk of individual tiles working loose at the edges. It is impervious to water but can be cut or scratched easily.

c) Laminates: Laminate flooring is constructed of several layers of plastic-type resins compressed under high pressure to a hard fiber or particleboard core, with melamine backing and printed surface. It can be made to appear like different types of wood flooring or even marble and flagstone. It is put together in tongue and groove fashion and is not attached to the subfloor as are standard hardwoods. Many carry a 10 year or more warranty against staining or fading. There is some difference of opinion, even among experts, about whether to use laminate in a place where it will get wet.

d) Ceramic tile: Wide range in costs depending on quality, color, and material. It wears well and is not easily stained. Because it also repels water if the grout is sealed properly, it is widely used for entryways, kitchens, and baths. If installed over wood, it must have solid underlayment that will not flex and subsequently crack the tile. Installing a solid underlayment, however, may raise the finished floor higher than adjacent flooring, causing an uneven transition unless calculated in advance.

e) Hardwoods: Hardwood floors cover the spectrum in color, types of wood, style, and price. They are available as traditional tongue and groove strip and plank to parquet squares. Hardwood floors range from labor-intensive parquet requiring on-site sanding expertise to factory finished products often installed by homeowners themselves. Newer finishes and finishing techniques make wood floors much easier to care for than in the past. Factory-finished floors come in a wide array of patterns and edge treatments. This type of floor can be laid quickly and without sanding dust and odor. Unfinished floors offer a wider choice of wood but require expert sanding and finishing in the house. The final appearance is more dependent on the people doing the sanding and finishing than on the wood itself.

16) WHAT TYPE OF SUBFLOORING IS BEST?

Preferred subfloors in the cases where ceramic tiles, marble or other stone floors are laid are mortar bed or cement board.

17) HOW DOES ONE GET THE POLISHED FINISH ON THE CONCRETE SURFACE?

This requires labor-intensive work and careful timing. First the concrete is leveled, then bull floated to bring the cream to the top. When the water sheen has disappeared, you must begin repeatedly toweling the slab with a rectangular steel trowel. Repeated steel troweling on firm yet still wet concrete gives it the polished finish. You kneel on a square of plywood while doing this and step to a second square of plywood when you must move. And you must move quickly before the concrete sets too firmly. In other words, this is usually a job for an experienced professional.

18) WHAT IS THE DISADVANTAGE OF USING CERAMIC TILES?

a) Joints can rupture, especially if bedding mortar is not evenly spread out. b) Size: In a box of 300 x 300 size, variations like 303, 296, etc, can be found. c) Please read the relevant guides.

Water Proofing
waterproofing

19) HOW TO PREVENT DAMP IN ROOF AND WALLS?

Presently, we advise people who request for such information to meet construction chemical manufacturers who have their own systems like FOSROC, SIKA, CICO, PIDILITE, SAHARA, CALTECH, etc.

20) WHAT IS CARPET AREA, BUILT-UP AREA & SUPER BUILT-UP AREA?

Carpet Area: This is the area of the apartment / building which does not include the area covered by the walls. Built up Area: The carpet area plus the area of the walls. Super Built up Area: This includes the built up area along with the area under common spaces such as the lobby, lifts, stairs, etc.

Procedure for NRI's
NRI

21) Who is a non-resident Indian (NRI)?

An Indian Citizen who stays abroad for employment / carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons posted in U.N. organization and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non- residents). Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian citizens (NRIs).

22) Who is a person of Indian Origin?

For the purpose of availing of the facilities of opening and maintenance of bank accounts and investments in shares/securities in India: A foreign citizen (other than a citizen of Pakistan or Bangladesh is deemed to be of Indian origin, if,

(i) He, at any time, held an Indian passport
(Or)
(ii) he or either of his parents or any of his grandparents was a citizen by virtue of the constitution of India or citizenship act, 1995 (57 of 1955). Note: A spouse (not being a citizen of Pakistan or Bangladesh) of an Indian origin is also treated as a person of Indian origin for the above purposes.

B. For investments in immovable properties:
A foreign citizen other than a citizen of Pakistan, Bangladesh, Sri Lanka or Nepal), Is deemed to be of Indian origin if,
(i) He, at any time, held an Indian passport (Or)
(ii) He or either of his parents or any of his grandparents was a citizen by virtue of the constitution of India or citizenship act, 1995 (57 of 1955).

23) What is an OCB?

Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin resident outside Indian and include overseas companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly, to the extent of at least 60% by individuals of Indian nationality or origin resident outside India as also overseas trust in which at least 60% of the beneficial interest is irrevocably held by such persons. Such ownership interest should be actually held by them and not in the capacity as nominees. The various facilities granted to NRIs are also available with certain exceptions to OCBs so long as the ownership/beneficial interest held in them by NRIs continues to be at least 60%.

24) Are OCBs required to produce any certificate regarding ownership/beneficial interest in them by NRI 'S?

Yes. In order to establish that the ownership/beneficial interest in any OCB held by NRIs is not less than 60%, the concerned body/trust is required to furnish a certificate from an overseas auditor / chartered / accountant /certified public accountant in form OAC where the ownership/beneficial interest is directly held by NRIs, and in form OAC 1 where it is held indirectly by NRIs and further that such ownership interest is actually held by them and not in the capacity as nominees.

25) What are the various facilities available to NRIs/OCBs?

NRIs/OCBs are granted the followings facilities:

1. Maintenance of bank accounts in India.
2. Investments in securities/shares of, and deposits with, Indian firms/companies.
3. Investments in immovable properties in India.

26) Do non-resident Indian citizens require permission of Reserve Bank to acquire residential/commercial property in India?

No.

27) Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?

Yes. However, Reserve Bank has granted general permission to foreign citizens of Indian origin whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are therefore, not required to obtain separate permission of Reserve Bank.

28) In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of India origin under the general permission?

The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.

29) What are the formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?

They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

30) Can such property be sold without the permission of Reserve Bank?

Yes. Reserve Bank has granted general permission for sale of such property. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.

31) Can sale proceeds of such property if and when sold be remitted out of India?

In respect of residential properties purchased on or after 26th May 1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993 will have to be credited to the ordinary non-resident rupee account of the owner of the property.

32) Are conditions required to be fulfilled if repatriation of sale proceeds id desired?

Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later.

33) What is the procedure for seeking such repatriation?

Applications for necessary permission for remittance of sale proceeds should be made in from IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property.

34) Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?

Yes. Reserve Bank has granted general permission to foreign citizens of Indian origin to acquire or dispose of properties up to two houses by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not, provided gift tax has been paid.

35) Can foreign citizens of Indian origin acquire commercial properties in India?

Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchaser's NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in from IPI 7 within period of 90 days from the date of purchase of the property/final payment of purchase consideration.

36) Can they dispose of such properties?

Yes.

37) Can sale proceeds of such property be remitted out of India?

Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26th May 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final installment of consideration amount, whichever is later. Applications for the purpose are required to be made to the Central Office of Reserve Bank within 90 days of the sale of property in from IPI 8.

38) Can the properties (residential/commercial) be given on rent if not required for immediate use?

Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income has to be credited to NRO account.

39) Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance?

Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., to grant housing loans to non-resident Indian nationals for acquisition of houses/flats for self-occupation subject to certain conditions. The borrower is required to meet at least 25% of the cost by way of foreign inward remittance through banking channels or out of funds held in his NRE/FCNR accounts.

40) Can authorized dealer loans to NRIs for acquisition of a flat/house for residential purpose?

Authorized dealers have been granted permission to grant loans up to Rs. 10 lakhs to non-resident Indian nationals for acquisition of only one house/flat for self-occupation on his return to India subject to certain conditions. At least 25 per cent of the cost should however be remitted from abroad by way of foreign inward remittance through banking channels or out of funds held in the investor's NRE/FCNR accounts.

41) Can Indian companies grant loans to their NRI staff?

Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions.

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