Originally Posted by Douglas M (Post 4929487)

Hi all,

My exclusion letter incorrectly states that it is illegal for FNs to buy property in india without permission from RBI. The Mamlatdar in panjim verbally told me the same thing, ie they would not process my application for mutation unless i had specific permission from RBI.

Neither of these statements are correct, a resident FN with suitable purpose and an intention to stay for an undetermined period has general permission to transfer immovable property in india without reference to RBI, according to FEMA.

The panjim registrar had previously registered a freehold in my name on the resident/general permission basis.

So misinformation and misunderstanding all around.

regards
douglas

Originally Posted by Douglas M (Post 4930187)

Hi TDK,

Thank you for the first few paras , the content is truly appreciated.

I am direct that is true and some people dont like it, i justify it most of the time , but maybe i step over the line ocasionally.

Your personal development is impressive for your age , i didnt even start looking within until i was about 38, some never do.

Your AS sounds comprehensive , but you do need to establish who you are dealing with on the freehold and check out their title documents at the registry and mamlatdars office. Ask them for a nil incumbrance certificate.

Stamp duty on a registered AS is 1% of the consideration (if and when you follow up with a sales deed it is only a further 1% instead of 2%) Registration fee is extra. According to afd the register is currently closed to FNs registering AS as well as sales deeds anyway. Dont bother to try and register , just go for the POA.

I dont understand the high stamp duty on your proposed lease, my receipt says 600 for registration fee, 100 for copying and the deed is writtehn on 500 irp stamp paper , so 1200 in all. it was registered in panjim on 6th june 05.
The rent payable according to the deed is 2,500 a month so maybe it is pro rata to the rent, rather like stamp duty and sale consideration.


Maybe your lawyer is confusing sale deeds and AS. Worst way someone is trying to rip you with forged stamp paper.

If you can identify the freeholder and prove title (free of incumbrance) along with a POA you are effectively the freeholder, just focus on that route.

Regarding acron, the info cornishboy gave us is different, he said that acron sells the property/lease to the new buyer on your behalf at the original book price, any profit is paid as a separate payment by the new owner to the original lease holder (black money) .Thats assuming anyone would be stupid enough to pay a high price for a short term lease that is.

I think i have covered everything.

Thanks again for your extensive reply.

regards
douglas

Originally Posted by TDK (Post 4930457)

Hi Douglas & thanks very much for the above info on RBI permission as that has cleared up my worries in that respect as i didn't apply for RBI permission as was told by developer wasn't necessary, but i wasn't quite sure, so a relief to know.

Also i hope you don't mind me going back to your post of 17/06 (@ 11.48), but i just wanted to clarify exactly what you meant when you said:

''This is the ideal situation,[getting the freeholder to sign a POA in my favour so i can act as if i were the freeholder of my property] you carry on as above, find the buyer, execute the sale deed to the new buyer and GIFT the net proceeds to whoever you wish.''

So my question is do i have to Gift the net proceeds to someone other than myself? or can i just transfer the net sale proceeds directly back to my own UK a/c? or have i lost the plot a bit here ?(quite likely)!:o

Also if i have POA in the way you described, would i need to take full responsibilty for declaring and paying tax on Capital Gains (if Cap Gains tax is payable on any potential profit i might make by selling on a Lease agreement)? Also i had a look at the British Inland Revenue site the other day to try to find out if there is a Double taxation treaty between UK & India but i couldn't quite work it out as it was a bit obscure to my mind! So if you or anyone else knows if Cap Gains tax needs to be paid on any profit both in UK & India, or if only in India, it might be useful to others also.

Also in case any of you missed it,about a week ago on the UK news Martin Lewis (a fincancial expert) was warning that there were only a few weeks left of the UK Inland Revenue's current tax amnesty (for British citizens to declare any income/profits from foreign owned property, assets & accounts etc) after which there will be hefty fines, so i just thought it was a good time to try to clarify the Cap Gains tax issue & put the word out.

Well thanks very much for any light you &/or anyone else can shed on these Q's & All the Best from TDK

Originally Posted by Douglas M (Post 4930828)

Hi TDK,

You arent selling anything in law, you have nothing to sell remember, the freeholder is doing the selling, as an attorney you act as his agent if you like.
The whole thing is simplified if the seller is an indian resident.

Any CGT liability would have to be paid by the freeholder, so if you were acting as his attorney you would open a bank account in his/the attorneys name and pay in the sale proceeds, or maybe use the freeholders acc, but that is riskier for you.

Then calculate the cgt liability and transfer the tax the freeholder would have to pay into the freeholders bank acc along with a simple set of accounts showing the sale price , tax deducted and net amount, so he can declare to the tax man. Provide the freeholder with all the documentation appertaining to the sale, keep a copy for yourself.

Obtain a simple deed from the freeholder gifting the net amount to you, you could then walk in and clean the account out. If you try and remit direct to uk you may have problems of all sorts , but you could look at it.

regards
douglas

Originally Posted by Douglas M (Post 4925909)

Hi TDK,

Part two coming up as promised on the techy bit and ideas for moving things forward property wise.

First task is to identify the owner or freeholder of your property, (he/she may be different from the developer), if you havnt already done so.

Check the validity of the freehold and ensure there are no incumberances(mortgages, leins etc) if you havnt already done so.

To recap now , you have an agreement to sale that is valid because you were resident when you signed it. It is in writing, it is signed and witnessed and you have paid the consideration, it also appears to have been notarised , so it has certainty.

An agreement to sale is simply a promissory note, it does not give you any right of ownership although it is the first stage in the sales process.

Ideally you should have registered the agreement to sale with the registrar and paid stamp duty at 1% of the value of the property. By not doing so you have committed a technical offence under the 1908 registration act according to a f d.

You have no real right of occupation of the property unless your agreement to sale specifically permits occupation, although the freeholder/developer may be allowing that.

Next step is to give you the right of temporary occupation, draw up a simple 58 month lease in your favour. No need for a rollover clause , not worth a light. You already have the promise of execution of a sale deed in your favour at a later date (if conditions permit) via the agreement to sale ( i am assuming there is no sell by date clause in the agreement to sale) so you dont need the option to buy clause in the lease either.

Ask the freeholder (or developer if he has authority, (ask to see it) to sign the lease.

Ideally register the short term lease with the registrar, mine was on 500 irp stamp paper and you have then secured your home for max 5 years as best you can, you may or may not get a rollover at the end of the period.

Moving on now to the possibility of getting all or part of your capital back.

You again need the cooperation of the freeholder, you could find a buyer ( a qualifying resident) and introduce them to the freeholder. The freeholder sells the property to the new buyer, if there is a book profit the freeholder pays the cgt , deducts his expenses and makes a gift of the net amount to you.

No lock in under this system, you didnt own it or sell it , the freeholder did.
( i am assuming the freeholder is not a FN)

If the freeholder is really cooperative you could ask him/her to sign a power of attorney in your favour, this would allow you to act as if you were the freeholder with regard to a specific property.

This is the ideal situation, you carry on as above , find the buyer, execute the sales deed to the new buyer and gift the net proceeds to whoever you wish.

I paste a draft poa as an example.



Power of Attorney for Sale

THIS GENERAL POWER OF ATTORNEY executed on the day of

Two Thousand:


B Y : [Name/s]


IN FAVOUR OF : [Name/s]




WITNESSES AS FOLLOWS:

I. WHEREAS I am the absolute Owner of all that Property [Details] more fully described in the Schedule below and hereinafter referred to as the "SCHEDULE PROPERTY";

II. WHEREAS I deem it necessary to appoint Agents and Attorneys to carry out certain acts in connection with the management and disposal of the Schedule Property;

III. NOW KNOW ALL MEN BY THESE PRESENTS THAT, I ________ __________________________ above named, do hereby nominate, constitute and appoint (1) MR. and (2) MR. above named, as my true and lawful Attorneys, in our name and on our behalf, to do either jointly or severally, all or any of the following acts, deeds and things, in regard to the Schedule Property :-

(a) to manage the Schedule Property and pay all taxes, rates and cesses, charges, fines and other levies in regard to the Schedule Property and obtain receipts and discharges;

(b) to appear for and represent us before all Government, Statutory, Local, Revenue, Tax and other Authorities as also Courts and Tribunals in regard to the Schedule Property;

(c) to submit applications and affidavits, statements, returns to the Government and/or any other Statutory Authorities concerned to obtain necessary clearances, exemptions, sanctions and permissions required under any Act/ Law;

(d) to enter into agreement/s for sale of the Schedule Property and to sell and convey the Schedule Property and execute Deed of Sale in favour of purchaser/s; and do everything necessary for completing the conveyance and registration of such Sale Deeds; and to sign all Forms, Affidavits, applications in that behalf;

(e) to receive the sale consideration, advances, earnest money deposits, part payments and balance payments in regard to the sale of the Schedule Property and issue receipts and acknowledgements therefor;

(f) to apply for and obtain all clearance certificate/s and/ or no objections required from the concerned Authority;

(g) to apply for and obtain necessary clearances, permissions and consents required in connection with sale of the Schedule Property;

(h) to represent me before all Government, Statutory, local and other Authorities as also Courts and Tribunals;

(i) to initiate, prosecute and defend all arbitration, legal, Revenue, tax and other proceedings relating to the Schedule Property and in that behalf, engage the services of legal and tax practitioners, instruct them and remunerate them;

(j) to sign and execute pleadings, applications, petitions, affidavits, declarations, memoranda of appeal, Revision and Review, Returns and other papers/documents and to receive and accept service of processes, Notices, Orders and acknowledge them;

(k) to settle, compromise, compound, withdraw any Suit/ proceeding relating to Schedule Property and obtain return thereof; and to do all things and be in charge of conduct of such or proceeding;

(l) to pay all rates, taxes and cesses and obtain receipts therefor;

(m) and generally to do all other acts, deeds and things necessary in regard to disposal of the Schedule Property;


I HEREBY AUTHORISE my said Attorneys to delegate all or any of the aforesaid powers to anyone else;

I HEREBY AGREE AND UNDERTAKE TO RATIFY AND CONFIRM all and whatsoever my said Attorneys may lawfully do pursuant to this Power of Attorney;


S C H E D U L E

[Details]


IN WITNESS WHEREOF we have executed this POWER OF ATTORNEY in the presence of the Witnesses attesting hereunder:


WITNESSES:

1)


E X E C U T A N T E


2)


[Note: Format only to be modified to suit the transaction/ authority sought to be given]

So to summarise, find and court the freeholder, explain your predicament that has arisen through no fault of the freeholder.

Ask him/her for their help in resolving your problem and outline solutions.

Present the draft 58 month lease and power of attorney to them for their approval.

Get the freeholder to sign the approved documents( witnessed).


regards

douglas

Originally Posted by a_f_d (Post 4931629)

TDK said:

I think you are being unfair to 'the vast majority' there. The FEMA rules were there for all to see and I think many developers/ agents quoted them openly (and accepted them at face value them).
I know of one developer who refunded all of his 'sold off plan' FN clients in August '06 (whether they wanted it or not!), and it is my subjective impression that Acron for example have every intention of honouring their "gentleman's agreement rolling lease" plus registering sales deeds as and when allowed and allowable.
The one action that is unarguably unethical and illegal is that of the sub-registrar.
The developers are as much the victims as the FN's in this - perhaps their most significant failure is not acting in concert to challenge the registrars' office.

AndyD 8-)#

Originally Posted by TONY P (Post 4931832)

Hi Andy, must say never considered the poor old developers in that way.
Is a Gentleman's Agreement legally binding or is it the same as a head waggle?
Maybe what would be ethical is if the developers got together and produced a clear language document that explained all the problems including: visas, residency, the closed registry, FEMA and RBI FAQs and an agreement that they would not use a member of their family as an advocate for the Purchaser.
Regards
Tony P

Originally Posted by a_f_d (Post 4931629)

TDK said:

I think you are being unfair to 'the vast majority' there. The FEMA rules were there for all to see and I think many developers/ agents quoted them openly (and accepted them at face value them).
I know of one developer who refunded all of his 'sold off plan' FN clients in August '06 (whether they wanted it or not!), and it is my subjective impression that Acron for example have every intention of honouring their "gentleman's agreement rolling lease" plus registering sales deeds as and when allowed and allowable.
The one action that is unarguably unethical and illegal is that of the sub-registrar.
The developers are as much the victims as the FN's in this - perhaps their most significant failure is not acting in concert to challenge the registrars' office.

AndyD 8-)#

Originally Posted by a_f_d (Post 4932284)

most people I've heard of got an Agreement of Sale as well as the lease (which can be renewed, it's just that there can't be a right to renewal)


true, but caveat emptor - and most buyers and sellers thought the buyer would be able to get 'resident' status and complete in that period.

AndyD 8-)#

p.s. before anyone asks I have no connection with any developers or agents

Originally Posted by Douglas M (Post 4930828)

Hi TDK,

You arent selling anything in law, you have nothing to sell remember, the freeholder is doing the selling, as an attorney you act as his agent if you like.
The whole thing is simplified if the seller is an indian resident.

Any CGT liability would have to be paid by the freeholder, so if you were acting as his attorney you would open a bank account in his/the attorneys name and pay in the sale proceeds, or maybe use the freeholders acc, but that is riskier for you.

Then calculate the cgt liability and transfer the tax the freeholder would have to pay into the freeholders bank acc along with a simple set of accounts showing the sale price , tax deducted and net amount, so he can declare to the tax man. Provide the freeholder with all the documentation appertaining to the sale, keep a copy for yourself.

Obtain a simple deed from the freeholder gifting the net amount to you, you could then walk in and clean the account out. If you try and remit direct to uk you may have problems of all sorts , but you could look at it.

regards
douglas

Originally Posted by a_f_d (Post 4931629)

TDK said:

I think you are being unfair to 'the vast majority' there. The FEMA rules were there for all to see and I think many developers/ agents quoted them openly (and accepted them at face value them).
I know of one developer who refunded all of his 'sold off plan' FN clients in August '06 (whether they wanted it or not!), and it is my subjective impression that Acron for example have every intention of honouring their "gentleman's agreement rolling lease" plus registering sales deeds as and when allowed and allowable.
The one action that is unarguably unethical and illegal is that of the sub-registrar.
The developers are as much the victims as the FN's in this - perhaps their most significant failure is not acting in concert to challenge the registrars' office.

AndyD 8-)#

Originally Posted by TDK (Post 4932460)

Hi again Douglas and sorry i've got another Q for you! (on your last para above)
When you suggested i could get the freeholder to gift me the net ammount and then walk in and clean out the a/c, wouldn't i still be faced with the problem of trying to convert such a large ammount of Rs back into pounds (to get the cash out of the country)? Or do you think it wouldn't be a problem to just change it all back at FOREX? And would i need to declare it at customs on departure?:unsure:After my experiences with the customs officials in Delhi when i tried to collect a few cases/trunks of my possessions i'd sent over by cargo, i try to have as little as possible to do with those customs people as possible!

Anyway sorry to bother you again (maybe i should just pay you to sort it all out for me before that yellow van with square wheels comes back for me again)!:eek: do you accept WH Smiths vouchers & £4 pound notes?

Thanks and regards TDK