NRI property-buying checklist — a practical pre-purchase workflow

Buying property in India from abroad is not conceptually harder than buying anywhere else — but the failure modes are different, and most NRI complaints trace back to the same handful of missed checks. This page is a working checklist, not a legal treatise. Run it top-to-bottom before signing anything.

0. Start with "why"

Before any property tour, get clear on what you are actually buying for:

• End-use home — you expect to move back in five to ten years and want to be living there on day one.
• Parental home — a parent lives in it now; rental yield and eventual sale are secondary.
• Short-stay base — empty most of the year, used two to four weeks at a time.
• Pure investment — never intended as personal residence; rental yield and capital appreciation are the only tests.

The answer changes which city, which neighbourhood, and which product (apartment in a managed society vs villa vs builder floor) makes sense. The single most common NRI regret is buying the right asset for the wrong purpose.

1. Confirm you are allowed to buy it

FEMA permits NRIs and OCIs to buy residential and commercial property freely, with no cap on the number of properties and no RBI approval.

It prohibits the purchase of agricultural land, plantation property, and farmhouses — regardless of state, regardless of any "we will reconvert it later" assurance. Check the revenue records (khata / patta / 7-12 extract, depending on state) to confirm the land use category before anything else. See agricultural land in India for the full position.

If the asset is residential or commercial and the land classification matches, you are eligible. Move on.

2. Title and encumbrance — the non-negotiables

Most NRI property disputes trace to a title defect the buyer could have surfaced in a week of diligence.

• Sub-Registrar search. Title deeds for the last 30 years, traced through the Sub-Registrar's office. A lawyer on the ground should do this; do not rely on photocopies the seller provides.
• Encumbrance Certificate (EC). Obtain the EC covering at least the last 13 years (30 years is better where available). It lists registered charges — mortgages, liens, court orders. A clean EC is necessary, not sufficient; unregistered claims do not show up.
• Mutation / revenue records. The property must be mutated in the current owner's name in municipal/revenue records. A sale deed in their name but mutation in a predecessor's name is a yellow flag.
• Pending litigation. Run a court-records search (e-Courts portal covers most districts now) on the seller and, for older properties, the previous two owners.
• Property tax receipts. Ask for receipts for the last five years. Gaps indicate disputes or that the property is not what the seller claims it is.
• Society / association dues. For apartments, an NOC from the society/RWA confirming dues are cleared.

3. For under-construction property — RERA is the anchor

Since the Real Estate (Regulation and Development) Act came into force, every project above the state's minimum size threshold (usually 500 sqm or 8 units) must be RERA-registered before it can be marketed or sold.

• Look up the project on your state's RERA portal. Registration number, promoter name, project name, approved plan, declared completion date, and quarterly progress updates are all public.
• No RERA number = walk away. Any builder who cannot produce a valid registration for an under-construction project is marketing illegally.
• Check promoter track record on the same portal: other projects, delays, complaints filed. RERA also maintains an adjudication history.
• Carpet area, not super built-up. RERA mandates sale on carpet area. If the sale brochure or agreement still leads with "super built-up" or "saleable area", push back.
• Approvals package. Commencement Certificate, approved layout plan, environmental clearance (where applicable), height clearance, fire NOC. Ask to see each — not just a summary page.
• Escrow confirmation. Under RERA, 70% of buyer payments must go to a project-specific escrow account. Verify the account details on the builder's RERA registration and pay into that account, not a generic "collections" account.

4. For resale property — the extra layer

Resale transactions are where most of the benami, forged-deed, and disputed-inheritance cases show up.

• Original chain of title in the seller's physical possession. Photocopies are fine for initial review but the originals must be produced at registration.
• Seller identity. PAN, Aadhaar, passport — matched against the title documents. For NRI sellers, also confirm the source of acquisition (so you know whether TDS at the higher non-resident rate applies on your payment to them).
• Co-owners and legal heirs. If the property was inherited, every heir's consent must be documented. A single missing signature can void the transfer years later.
• No outstanding loan. If the seller's home loan is open, the originals are with their bank. Get a written payoff statement and coordinate the deed release with final payment.
• Vacant possession clause in the sale agreement, with a specific date.
• Avoid "power of attorney sales." A General Power of Attorney (GPA) holder cannot validly transfer title under the Supreme Court's ruling in Suraj Lamp & Industries (2011). If the deal is structured as a GPA transfer rather than a registered sale deed in the real owner's name, walk away.

5. Builder diligence — beyond the brochure

If you are buying from a developer:

• Delivery record on prior projects. How many units promised, how many handed over, how late.
• Litigation by past buyers. Consumer forum and RERA adjudication orders are public.
• Bank empanelment. If major banks (SBI, HDFC, ICICI) will not lend on a project, that is a signal; home-loan underwriting is a quiet third-party audit of the builder.
• Specifications in the agreement, not the brochure. Fittings, finishes, shared amenities, parking allocation, clubhouse access — all should be listed in the Agreement for Sale. Brochures are not enforceable.
• Maintenance and club charges. Clarify in writing: one-time corpus vs monthly charges, escalation clauses, handover of the maintenance function to the RWA, and when the builder stops collecting.
• Penalty for delay. RERA implies compensation for delay but the agreement should spell out the rate (typically State Bank of India MCLR + 2%) and the trigger.

6. Zoning, approvals, and "violations"

• Zoning classification should match intended use. Do not buy residentially-zoned land for a commercial purpose on the promise that conversion is easy.
• Approved plan should match what is actually built. Older resale properties often have extra floors or covered balconies that were never sanctioned. Municipal demolition of unauthorised structures is not rare.
• Land use change. If the seller tells you the land was recently converted from agricultural to residential, verify the conversion order at the Deputy Commissioner / Collector office — do not rely on the sale-side paperwork alone. See the warnings on reconverted land in agricultural land in India.

7. Money — only through banking channels

• Never pay cash. Every rupee of consideration should move through NRE, NRO, or FCNR(B) accounts.
• NRE or FCNR funds are fully repatriable on eventual sale (up to the investment amount and on up to two residential properties). NRO-funded purchases fall under the general USD 1 million per FY repatriation window.
• TDS on payment to a resident seller — 1% where sale consideration is ₹50 lakh or above (Section 194-IA).
• TDS on payment to an NRI seller — much higher, at the applicable long-term or short-term capital gains rate plus surcharge and cess, under Section 195. Get a Form 13 / lower deduction certificate if the seller is entitled to one; otherwise deduct at the full rate. This is the single biggest bookkeeping mistake in NRI-to-NRI transactions.
• Stamp duty and registration fees — varies by state, typically 4%–7% stamp duty plus ~1% registration. Confirm the exact rate and any concession (many states offer a discount for women buyers or first-time buyers).

8. The Agreement for Sale — read it, then redline it

A typical builder or seller agreement is drafted for the other side. Expect to redline. Non-negotiable items:

• Total consideration broken up by milestone, with no cost ** escalation clause** unless tied to a defined external index or government levy.
• Specifications and finishes spelled out.
• Delivery date with penalty for delay.
• Refund mechanism and timelines if the deal collapses on the seller/builder's side.
• Clear allocation of stamp duty, registration, GST (if applicable), and legal costs.
• Dispute resolution clause — RERA adjudication (for residential) and a specific civil jurisdiction for the rest.

9. Register everything that needs registering

Under the Registration Act, 1908, a sale of immovable property worth ₹100 or more must be by registered sale deed. An unregistered sale agreement, however well-drafted, does not transfer title. Pay the stamp duty, register the deed at the Sub-Registrar's office, and obtain the certified copy.

For detail on the mechanics, see property registration in India.

10. Power of Attorney — if you can't be present

Most NRIs register through a PoA. Keep it **specific, not general**:

• Name the property precisely.
• List the exact acts permitted (sign sale deed, present for registration, accept possession, sign indemnity).
• Name a trusted individual — not the builder, not the broker.
• Execute at the Indian consulate abroad or (if executing in India during a visit) at a sub-registrar.
• Revoke it in writing once the purpose is complete.

11. Post-purchase — don't declare victory yet

• Mutation of the property in your name in the municipal records. Apply within the state's prescribed window (usually 90 days) to avoid a penalty.
• Utility transfers — electricity, water, gas, property tax, society records.
• Insurance — structure cover at minimum.
• Will or nomination. Update your will to cover the Indian asset, particularly for succession if you later take foreign citizenship.
• File Indian tax returns if you now earn rental income or have TDS to claim back.

Red flags — step back if you see these

• Pressure to close before diligence is complete.
• Cash component "for the seller's convenience".
• Sale via GPA rather than a registered deed.
• Agricultural-land paperwork with a promise of conversion.
• No RERA registration for an under-construction project.
• Builder asking for payments into a personal or non-escrow account.
• Resale property with unclear heirs or missing co-owner signatures.
• Broker offering to "sort out" an encroachment or boundary dispute after purchase.
• "Discounted" price well below the municipal circle rate (stamp duty is calculated on the higher of transaction value and circle rate; an abnormally low price often hides cash).

A working order of operations

1. Decide purpose and budget.
2. Shortlist city, locality, product type.
3. Confirm FEMA eligibility on the specific property.
4. Appoint a lawyer on the ground; commission title and encumbrance diligence.
5. Verify RERA registration (for new) or court-records / heirship (for resale).
6. Negotiate and redline the Agreement for Sale.
7. Pay through NRE/NRO/FCNR channels, deduct TDS if applicable.
8. Register the sale deed and pay stamp duty.
9. Mutate, transfer utilities, insure, update your will.

For the surrounding NRI framework — funding sources, eligible accounts, repatriation on eventual sale — see buying and selling property in India as an NRI.