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Lease is a two way document, it must protect the rights of the owner of the property and also the rights of the tenant. Most expats that come to the country will lease some type of accommodation and will have to enter a lease between him and the landlord or him and the company.
Its always best that one enters into a company lease agreement, landlords also prefer this and it can be settled by the company lawyer and the landlords lawyer.
Personal leases are best avoided as one does not know
A foreign national who is, according to Section S (v) of FEMA – 1999, a “person resident in India” can purchase a property in India after fulfilling legalities. However exceptions to this rule may exist. For details please visit http://www.rbi.org.in/scripts/faqview.aspx?id=33.
On the other hand, property prices in India can be very tempting for majority of the foreigners. Ordinarily purchasing any long term asset in haste would be a mistake. Below are a few lease mistakes you should avoid while living in India.
Do It Yourself Lease Agreements:
Avoid signing lease agreements that are unclear on the Indian land ownership regulations, legality and financial issues. The Indian real estate market is still highly disoriented when it comes to non-resident property deals. Make sure to hire the services of a legal expert in the real estate area who would better guide you about the pros and cons of any house-lease agreement.
Non-Verification of Legal Documents:
As mentioned earlier, the real estate sector is highly disorganized in India. So, if you do come across your dream house it is always recommended to get the lease title, house documents and house possession certificates double checked. Avoid transferring funds even it’s a minor down payment before document verification.
Non-inspection of House:
Remember that when it comes to buying a house in India, it is a matter of room to room and area to area inspection. Leaving any nook or corner uninspected is the number one lease mistake you can commit before signing a lease agreement. Professional inspection through a carpenter, plumber or an expert household managerial staff should be done. If you are getting your house lease documentation done through an Indian bank, you can also request a professional house inspection done by the bank.
This is the most common house lease mistake done by non-locals. Remember that you are buying the house for current living and future investment. Spending obnoxious amount of money on repairs, additions and house enhancements will further get you in debt. My take is to keep it slow and steady for the first few months.
Leasing a house can be quite tricky in India. Non-residents who have done this have had all kinds of experiences. In case of a short term stay in India it is recommended to get a cost benefit analysis of lease versus rent done by a real estate Indian attorney.