If all you want to do is buy an apartment for yourself, its straight forward. But its different if you want to build an apartment complex or township or SEZ (special economic zone) with FDI (foreign direct investment) or ECB (external commercial borrowing).

Please refer this post: RBI Guidelines for FDI and ECB in Indian Real Estate

Investing in real estate in India requires compliance with various laws, some 100 years old and some new. In addition to Central Govt laws, there are state laws governing real estate transactions and investment.

The Central laws governing real estate include:

Indian Transfer of Property Act

The Transfer of Property Act governs the transfer of property by various means. Sales, mortgages (other than by way of deposit of title deeds) and exchanges of immovable property are required to be registered by virtue of the Transfer of Property Act. Therefore, all the above documents must be in writing and registered.

Indian Registration Act, 1908

The purpose of this Act is the conservation of evidence, assurances, title, publication of documents and prevention of fraud. It details the formalities for registering an instrument. Instruments which require mandatory registration include:

• (a) Instruments of gift of immovable property;
• (b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immovable property;
• (c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of instruments in (2) above.
• (d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent

Sales, mortgages (other than by way of deposit of title deeds) and exchanges of immovable property are required to be registered by virtue of the Transfer of Property Act. So all the above documents have to be in writing.

Section 17 of the Act provides for optional registration. An unregistered document will not affect the property comprised in it, nor be received as evidence of any transaction affecting such property (except as evidence of a contract in a suit for specific performance or as evidence of part-performance under the Transfer of Property Act or as collateral), unless it has been registered.

Thus the doctrine of part performance dealt with under Section 53 A of the Transfer of Property Act and the provision of Section 49 of the Registration Act (which provide that an unregistered document cannot be admissible as evidence in a court of law except as secondary evidence under the Indian Evidence Act) together protect the buyer in possession of an unregistered sale deed and cannot be dispossessed. The net effect has been that a large number of property transactions have been accomplished without proper registration.

Instruments such as Agreement to Sell, General Power of Attorney and Will have been indiscriminately used to effect change of ownership. Therefore, investors in real estate have to be careful in their due diligence.

Therfore, establishing “Clear Title” on your desired Indian Real Estate is more complex and time-consuming than it is in America or Europe. Please factor this in your due-diligence.

Reference: http://www.madaan.com/realestate.html

Question by Mr. Narendran: We are Bangalore based real estate company and we are inviting foreign individual investors/institutes to invest in our residential projects across India. We are basically a marketing company and we have now stepped into our own property development in India. Can NRI’s invest through ETFs or ADRs? Kindly comment.

Answer: Thanks for asking your question. Please see the following posts for relevant inputs:

RBI Guidelines for FDI and ECB in Indian Real Estate

How can USA residents invest in India Real Estate through ETFs/ADRs?

So, can NRI’s invest through ETFs or ADRs? The simple answer is Yes in most cases. You should double check that your specific “residential projects” don’t have any regulation constraint from either Central Govt (RBI) or State Govt (I believe some state govts have added clauses to Central govt rules). Since you are already operating in India, you would have a good understanding on these aspects.

One more point from our experience is that if you are looking to attract FDI from NRIs for Real Estate Projects in the form of ETFs/ADRs, then you should tie-up with a company that has existing relationships with NRI investors, so that your offering gains more credibility.

You can contact us if you want help in connect with such companies. Feel free to ask any other question.

Thanks,
Shankar on behalf of India-Real-Estate.org

According to city-based property brokers, most of the companies look for A Grade quality office space in Chennai and expect robust infrastructure around their office.

The real estate developers operating in Chennai commercial real estate space observe that Old Mahabalipuram and Guindy are among the most preferred commercial areas for IT/ITES companies. Most of the companies are coming to these regions and the real estate values are likely to take a ride over these trends.

• As per studies, rental values of commercial properties viz. offices and shops located at CBD region is reported to have the highest rental values at around Rs 45-55 per sq. ft. These rental values decreases off CBD region of about Rs 35-40 per sq. ft.
• At present, commercial rental value in Chennai varies from Rs 30-55 per sq. ft, which is about 5-15 per cent higher as compared to last year.

Residential property

Chennai properties around the south-west part of the city are likely to enjoy a northward rally in the next couple of years. The business opportunities created by the modernization of airport would boost the property values in the areas around the facility.

• According to the property experts, the areas of Guindy and Vela Chery would be among the most-benefited.
• Besides, the property prices in Chennai’s Saidpet area are also likely to go up as the airport project would progress.

As far as investment opportunities in Chennai Real Estate are concerned, investors can delve for investing in properties around Inner Ring Road as it connects the central city localities like Kodambakkam and Mambalam with the airport, and is likely to reap rich dividends in the near future.

George Gonigal provides you the best and latest information on Chennai Real Estate Builders, if you want to Buy Apartments in Chennai. For more info, log on to magicbricks.

Article Source: http://EzineArticles.com/?expert=George_Gonigal

Date: 16 Jan 2007

Here is the pdf file by HUDA with all the details: http://huda.nic.in/hotel.pdf

Real estate prices in India have been on an upward spiral for some time now – and we all know that. The trend is not only limited to the metros, but also visible in tier II and tier III cities as well. But why these prices have actually upshot comparable cities in developed countries brings some interesting arguments to the fore.

The biggest impediment of Indian development is infrastructure, and that leads to bad connectivity of places, thus exponentially increasing demand for well connected cities. But these factors have been present forever in India. So What is driving the Indian real estate prices today?

Here are the top factors:

• Greater liquidity – Perhaps never before has there been so much money in the market. And all of it is chasing just a little available land.
• Foreign Institution Investments – Most real estate investments are open to FDI. Its not only money which we Indians are earning, but money the multi-nationals are putting into Indian Real Estate. This has been discussed Indian Business Review in its Real Estate Reports.
• NRI capital – It’s no longer a minor part of the investment. For example, visit any of so called “rural areas” in Punjab, and you will see that the villas there are perhaps are bigger than many in Delhi or Mumbai. So real estate prices are moving up in these smaller cities as well.

With all these factors, it becomes a simple equation of Demand and Supply.

And because land in India is not available in plenty (ie, land/person is much less than most countries) and most Indian families value investment in land as the best investment – so that is also big reason for increasing prices.

As most of these factors seem likely to stay around for the foreseeable future, places like Delhi and Mumbai are competing with London, New York and Tokyo, for the costliest real estate per square feet.

Read the rest of the article and analysis here