GOA - Buyer Beware!

Old Mar 20th 2007, 11:10 am
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Exclamation GOA - Buyer Beware!

Hi, we are Brits who until recently lived in Goa.

My wife and I have been reading your posts on various subjects with interest, particularly those appertaining to buying property in Goa. We are concerned that many people are buying off plan without making the provisional checks and just taking the word of the sales people and advisers involved. Good salesmen simply tell you what you want to hear.

Please don't get too carried away with choosing the furnishings and colour of the tiles in the bathroom before you have done your homework.

It is difficult (at the moment nigh impossible) to fulfill the requirements for residency / company formation / visa acquisition etc. without the additional hurdles that are involved in buying off plan. The first set of issues are dealt with on IndiaMike.com forums foreign owned property in goa and foreign owned property in goa part two.

For those who are also attempting to buy off plan please go to www.amchegoa.com , then go to real estate / goa / FAQ

Even if you manage to wade through and comprehend all of this stuff, remember this is India and the rules will invariably change depending on the day of the week, the position of the moon and person you are talking to.
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Old Mar 22nd 2007, 7:41 pm
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Default Re: GOA - Buyer Beware!

Originally Posted by Douglas M View Post
Hi, we are Brits who until recently lived in Goa.

My wife and I have been reading your posts on various subjects with interest, particularly those appertaining to buying property in Goa. We are concerned that many people are buying off plan without making the provisional checks and just taking the word of the sales people and advisers involved. Good salesmen simply tell you what you want to hear.

Please don't get too carried away with choosing the furnishings and colour of the tiles in the bathroom before you have done your homework.

It is difficult (at the moment nigh impossible) to fulfill the requirements for residency / company formation / visa acquisition etc. without the additional hurdles that are involved in buying off plan. The first set of issues are dealt with on IndiaMike.com forums foreign owned property in goa and foreign owned property in goa part two.

For those who are also attempting to buy off plan please go to www.amchegoa.com , then go to real estate / goa / FAQ

Even if you manage to wade through and comprehend all of this stuff, remember this is India and the rules will invariably change depending on the day of the week, the position of the moon and person you are talking to.
Thank you for your post. Im not going to bore you with my situation, as we have pulled out anyway, but I would like to hear your views on how Acron appears to be tackling the problem of purchasing in Goa. I have read a lot of posts on this forum, with many people thinking they are in safe hands with Acron, no doubt they are, but I fail to understand why people think that doing it the Acron way will ultimately allow them to register their property with the land registry. Are you aware of or have any knowledge of the Acron way?

Regards
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Old Mar 23rd 2007, 2:10 am
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Question Re: GOA - Buyer Beware!

The maximum they can offer is a 5 year lease. Who owns the freehold?
They are hoping the law will change for the better in the future. There is no guarantee of that.
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Old Mar 23rd 2007, 5:51 am
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Default Re: GOA - Buyer Beware!

I am responding to Tracy’s question specifically, but also endorse the reply from leavingoa.

In our case, we looked at buying off plan several years ago before the xenophobia and current restrictions on foreign nationals emerged. The concept was rejected by us as it has its own set of risks.

Instead we opted to buy an old property and restore it, the documentation we used was similar to that which I believe Acron and others use ie a 5 year lease with the option to buy. In our case we successfully exercised the option to buy , paid our money and subsequently registered the property. Now we understand that all sales and purchases of immovable property by foreign nationals over the last three years are being investigated by RBI and registration and mutation are being withheld.

Circumstances at the time of our purchase were very different and did not include the current risks. X visas were available in order to complete the 183 days residency period and obtain a resident permit. We also complied with the rules on inward remittance of the purchase monies through the Indian banking system and we had an intention to stay for an unspecified period of time i.e retirement. In short we complied with the FEMA general permission conditions appertaining to foreign nationals buying (or selling ) immovable property in India.

At the moment, the lease option to buy route has effectively been blocked by both central and Goan government through refusing to register sales and purchases of immovable property by foreign nationals and endorsing visas with maximum 180 days stay thus preventing foreign nationals from becoming resident and rendering lease purchase unworkable (i.e. you cannot complete 183 days).

Even if you did manage to complete your 183 days residency to purchase the property, register and mutate the transaction you also have to complete 183days residency if you decide to sell, which is a factor that no one seems to have considered so far.

I don’t know if the lease option to buy arrangement will work again at some stage in the future, but if you look at the underlying cause of the current restrictions, you must conclude that a percentage of the Goan population and the Goan government do not want foreigners living long term or owning property and land in Goa. If that view moves either side of the current centre line you can expect either an easing of restrictions or new permanent legislation, my bet is on new legislation .

Back to how and why the Acron myth perpetuates, in a word DENIAL. People only hear what they want to hear and dismiss any evidence to the contrary. There is now substantial information available on this subject for anybody that wants to do their homework. I guess the ostrich method will prevail.

In short if you pay your money upfront for a lease option agreement and cannot exercise that option, you end up with just a five year lease and the developer ends up with both the total purchase price and the freehold. The situation is even riskier if you pay your money upfront and the only material that exists at that time is a piece of dirt and a map!
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Old Mar 23rd 2007, 7:51 am
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Default Re: GOA - Buyer Beware!

Originally Posted by Douglas M View Post
I am responding to Tracy’s question specifically, but also endorse the reply from leavingoa.

In our case, we looked at buying off plan several years ago before the xenophobia and current restrictions on foreign nationals emerged. The concept was rejected by us as it has its own set of risks.

Instead we opted to buy an old property and restore it, the documentation we used was similar to that which I believe Acron and others use ie a 5 year lease with the option to buy. In our case we successfully exercised the option to buy , paid our money and subsequently registered the property. Now we understand that all sales and purchases of immovable property by foreign nationals over the last three years are being investigated by RBI and registration and mutation are being withheld.

Circumstances at the time of our purchase were very different and did not include the current risks. X visas were available in order to complete the 183 days residency period and obtain a resident permit. We also complied with the rules on inward remittance of the purchase monies through the Indian banking system and we had an intention to stay for an unspecified period of time i.e retirement. In short we complied with the FEMA general permission conditions appertaining to foreign nationals buying (or selling ) immovable property in India.

At the moment, the lease option to buy route has effectively been blocked by both central and Goan government through refusing to register sales and purchases of immovable property by foreign nationals and endorsing visas with maximum 180 days stay thus preventing foreign nationals from becoming resident and rendering lease purchase unworkable (i.e. you cannot complete 183 days).

Even if you did manage to complete your 183 days residency to purchase the property, register and mutate the transaction you also have to complete 183days residency if you decide to sell, which is a factor that no one seems to have considered so far.

I don’t know if the lease option to buy arrangement will work again at some stage in the future, but if you look at the underlying cause of the current restrictions, you must conclude that a percentage of the Goan population and the Goan government do not want foreigners living long term or owning property and land in Goa. If that view moves either side of the current centre line you can expect either an easing of restrictions or new permanent legislation, my bet is on new legislation .

Back to how and why the Acron myth perpetuates, in a word DENIAL. People only hear what they want to hear and dismiss any evidence to the contrary. There is now substantial information available on this subject for anybody that wants to do their homework. I guess the ostrich method will prevail.

In short if you pay your money upfront for a lease option agreement and cannot exercise that option, you end up with just a five year lease and the developer ends up with both the total purchase price and the freehold. The situation is even riskier if you pay your money upfront and the only material that exists at that time is a piece of dirt and a map!
Many Many thanks for confirming what we, in a only 3 short months, believed to be the case. We went on our annual holiday to Goa at xmas and we did not go with the idea of purchasing, but we stumbled across a beautiful little village in the South and we decided to buy a property off plan. We were advised to set up a company by both the developer and lawyer, both knew it was purely for us to buy this property. We spent £400 for lawyer fees, came home, my father investigated the situation for us further and had long conversations with our lawyer, after which my father advised us to pull out for all the reasons you have explained in your post. We did pull out but we have always been left wondering if we did right. I now have the comfort I needed to realise we did do right. I never doubted what my father was saying to us as he is a very intelligent man, but I didn't want to give up on my dream. Based on your information I now intend to contact my lawyer and ask him to close this company as I now know it is not worth the paper it is written on, and as for the £400, well you live and learn, and I'm just so pleased we did not part with anymore money, because we were under a lot of pressure to start paying out quite large lump sums before the company/business bank account was even set up.
Once again, many thanks for taking the time and trouble to post this and I just hope it will help others decide the way forward as well, because I know how hard it is to give up on a dream!!!! The reason I aked about Acron is because we know they are the biggest developers in Goa up North, and the more I read posts on this forum, Acron kept coming up as the way forward, but my father had always doubted this business of the 5 year lease, what happens if you cant register it with land registry and then trying to sell the propery on. At the end of the day, one is paying an awful lot of rent money aren't they!!!
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Old Mar 23rd 2007, 7:55 am
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Default Re: GOA - Buyer Beware!

Originally Posted by tracy beevis View Post
Many Many thanks for confirming what we, in a only 3 short months, believed to be the case. We went on our annual holiday to Goa at xmas and we did not go with the idea of purchasing, but we stumbled across a beautiful little village in the South and we decided to buy a property off plan. We were advised to set up a company by both the developer and lawyer, both knew it was purely for us to buy this property. We spent £400 for lawyer fees, came home, my father investigated the situation for us further and had long conversations with our lawyer, after which my father advised us to pull out for all the reasons you have explained in your post. We did pull out but we have always been left wondering if we did right. I now have the comfort I needed to realise we did do right. I never doubted what my father was saying to us as he is a very intelligent man, but I didn't want to give up on my dream. Based on your information I now intend to contact my lawyer and ask him to close this company as I now know it is not worth the paper it is written on, and as for the £400, well you live and learn, and I'm just so pleased we did not part with anymore money, because we were under a lot of pressure to start paying out quite large lump sums before the company/business bank account was even set up.
Once again, many thanks for taking the time and trouble to post this and I just hope it will help others decide the way forward as well, because I know how hard it is to give up on a dream!!!! The reason I aked about Acron is because we know they are the biggest developers in Goa up North, and the more I read posts on this forum, Acron kept coming up as the way forward, but my father had always doubted this business of the 5 year lease, what happens if you cant register it with land registry and then trying to sell the propery on. At the end of the day, one is paying an awful lot of rent money aren't they!!!
PS. This was all done on a tourist visa which my lawyer was also aware off!
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Old Mar 23rd 2007, 9:16 am
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Default Re: GOA - Buyer Beware!

tracy, for more reassurance that you did the smart thing by pulling out when you did, see my post in the "Help - nearly buying in Goa" thread and the other on-line discussions referred to there. I'm afraid many, many people who aren't Indian citizens or PIOs are going to end up badly burned and sadly disillusioned as a result of their attempts to buy immovable property in Goa, particularly if their plan was to "retire" to India and live there permanently.

Last edited by avocadogreen; Mar 23rd 2007 at 9:18 am.
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Old Mar 23rd 2007, 11:15 am
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Default Re: GOA - Buyer Beware!

Thank you Tracy for your kind response, we are pleased that we endorsed your decision. As advocadogreen says there will probably be a lot of disillusioned foreigners apearing over the next couple of years. We also thought advocadogreens previous post on the realities of the company route was an excellent piece.

In summary,wev'e all been seduced by the Goan dream but the reality is somewhat different.

Unfortunately advocates are still advising prospective buyers to form a company on a tourist visa, which is incorrect. The danger here is applying western standards to professionals in India and our expectation of western levels of competence, and integrity. Furthermore there is little acountability.

Your losses and dissapointment could have been even greater if you had continued with your purchase.
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Old Mar 23rd 2007, 5:26 pm
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Default Re: GOA - Buyer Beware!

Originally Posted by avocadogreen View Post
tracy, for more reassurance that you did the smart thing by pulling out when you did, see my post in the "Help - nearly buying in Goa" thread and the other on-line discussions referred to there. I'm afraid many, many people who aren't Indian citizens or PIOs are going to end up badly burned and sadly disillusioned as a result of their attempts to buy immovable property in Goa, particularly if their plan was to "retire" to India and live there permanently.
Hello and thank you for your email. Yes I had already read your post just a couple of days before reading the post from Douglas, and upon reading your post took comfort that we had made the right decision. It was just further added comfort to read the post from Douglas.
We are still in love with Goa and we will plan to continue as we always have. Just rent somewhere for a month or so, have a great time and then come home without the stress and worry of "buying in Goa".
I also thank you for your post in trying to open our eyes and protect us from having our dreams shattered, notwithstanding the financial loss.

Kind regards

Tracy
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Old Mar 23rd 2007, 5:36 pm
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Default Re: GOA - Buyer Beware!

Originally Posted by Douglas M View Post
Thank you Tracy for your kind response, we are pleased that we endorsed your decision. As advocadogreen says there will probably be a lot of disillusioned foreigners apearing over the next couple of years. We also thought advocadogreens previous post on the realities of the company route was an excellent piece.

In summary,wev'e all been seduced by the Goan dream but the reality is somewhat different.

Unfortunately advocates are still advising prospective buyers to form a company on a tourist visa, which is incorrect. The danger here is applying western standards to professionals in India and our expectation of western levels of competence, and integrity. Furthermore there is little acountability.

Your losses and dissapointment could have been even greater if you had continued with your purchase.
Yes Douglas you are so right. Our disappointment and losses could have been so much more, and I am ever thankful that I have a smart intelligent father, however, I was very nearly tempted not to listen to him, because like a lot of people I got caught up in the dream. That is why your post along with advacodogreen's post has given me clarity, comfort and definitely no regrets!!!! Thank you again.

Kind regards

Tracy
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Old Mar 26th 2007, 4:52 pm
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Hi Guys
I am new to the forum.
I have invested in Goa without hesitation.
I have a few places in other countries and I firmly believe that the rule that seems not to have been followed here is " Buy with your pocket, not your heart".
It is indeed a beautiful place and there are always ways of repatraiting funds should the need arise from most any country without the need for company formation although this is generally the best and safest way.
Buy to rent or holiday home or just to flip before completeion dictates what course should be followed at the time. The market usually lets you know what to do at the time. No getting away from the fact that there will be consideable capitol growth upon completion and that the use for holidays will always be reserved by yourselves should you wish.
A fantastic getaway for those who love the peace and beauty of an underdeveloped haven. Not too many about nowadays at these prices.

Good luck to you all in what ever you do decide to invest in.
Either post or Private mail me if you want to talk.
I'm in Dubai so please allow for the time difference.

Bye from Dubai.

Simon
 
Old Mar 26th 2007, 5:22 pm
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Default Re: GOA - Buyer Beware!

Hi Simon,

I'm from planet earth.

Where are you from?
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Old Mar 26th 2007, 5:48 pm
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Default Re: GOA - Buyer Beware!

Originally Posted by Douglas M View Post
Hi Simon,

I'm from planet earth.

Where are you from?
Douglas - being thick... so it would appear (that's me not you).... what is Simon going on about??? Thanks for the advice Simon, not that I understand what you are going on about!!!!
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Old Mar 26th 2007, 6:01 pm
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Default Re: GOA - Buyer Beware!

He's a developer, or he is living on another planet. He's certainly not living here.
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Old Mar 26th 2007, 6:33 pm
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Default Re: GOA - Buyer Beware!

Ouch! Guys
Just trying to be friendly.
I will stick to PMs from now on. Experienced this kind of stuff on other sites.
Not a developer, just a satisfied investor.
For those who are serious about exchanging experiences or views Pms are a lot better.
Bye from Dubai
Simon
 

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