Shanti Subramanian, a non-resident Indian (NRI) based in Dubai, purchased a house in Chennai two years ago. Since the family had no immediate plans to move to India, they decided to rent out the premises.
“My husband and I relied on a broker to lease the house,” Subramanian recalls. “The family seemed decent and we thought our worries were over. But a year later, when we visited India and decided to renew the lease and raise the rent marginally, the tenants refused to comply.
“When we asked them to vacate the house, they threatened us. The broker was of no help and informed us the family had strong political connections and it would be better for us to make peace with them. We sought police intervention but were advised to approach the courts. Left with no choice, as we had other commitments and were to return to Dubai, we extended the agreement on previous terms.”
Several months later, the Subramanians have received no rent payments. The family have put the issue on the back burner until their next India visit. But Subramanian is trying to find ways to rope in a senior police officer to help them. “Once I get my property back, I will get tenant verification done at a local police station before renting out the flat again,” she says.
Tale of all cities
Hearing of several such cases, NRIs are exercising caution. Though keen to invest in the Indian property market, the horror stories of land mafia grabbing properties make them wary of taking the plunge.
“It’s a fact that NRI properties are an easy target for unscrupulous elements, especially in cases where the properties have no caretakers,” says Diljeet Titus, Managing Partner of law firm Titus & Co. “In many cases, the owner grants power of attorney to a person to take care of his property, which leads to its misuse.
“Moreover, due to the absence of stringent realty laws, criminals take advantage of the cumbersome legal process in India, which encourages the land mafia to grab properties. Sadly, there is no proper legal recourse available to the victim. Civil proceedings can drag on for years and to initiate criminal proceedings, the physical presence of a complainant is required from time to time.”
Titus believes that prior to expecting NRIs to invest in their country, the government should take certain initiatives, such as establishing a dedicated cell at police stations to deal specifically with complaints from NRI property holders and swift action on their complaints to deter swindlers.
“To put off land sharks, foolproof mechanisms are required urgently. It should be mandatory for all real estate agents to have a licence or an identification number — similar to lawyers and doctors — and provisions for cancellation of the same in case of malpractice or fraud.”
Building trust
Anuj Puri, Chairman and Country Head at JLL India, says, “To gain credibility and infuse confidence among investors including NRIs, the Real Estate (Regulation and Development) Act needs to be made a law. It will give buyers an arbitration body to attend to grievances and boost transparency by standardising practices and streamlining government procedure. In the process, it will bring about a greater level of trust not only between the buyers and sellers but also landowners and developers as well as among developers and the financial institutions that fund them.”
That level of trust is what Rama Kant Shastri, a Dubai-based NRI, is anticipating. Shastri is looking for assurance that his property will be safe in the hands of a realtor in New Delhi, as his relatives have moved from India and he fears someone may grab his property, now lying vacant.
R. Balakrishnan, an independent real estate analyst, suggests ways to tackle such situations. “It’s time technology is used to demarcate ownership rights by uploading all data on to the internet as per government records. And every owner should be able to set up an alert mechanism whenever any modification is carried out.”
However, he says, state governments have been resisting any such move due to their own vested interests. “The reason being land is a state subject and governments do not want to bring transparency to this sector. The onus is now on the central government to take the initiative. But then it’s a tricky situation, as most real estate developers are hand in glove with government officials and [many] thrive by cheating property owners.”
