NRI Property Disputes: Indian Laws, Rights, and Legal Remedies

Despite living abroad, many NRIs are still owners or heirs of property in India, whether it is a house, land, or a commercial property. NRIs run the risk of being involved in legal disputes concerning their property simply because they live abroad. The most common property issues an NRI can face include illegal occupation of their property by tenants or relatives, family disputes over inheritance or builder-related problems. Due to previously mentioned reasons, NRIs do not have a chance to visit their property on that regular basis. This increased distance can elevate the risk of fraudulent activities and misuse of the property.

This article, simply lays out laws, and legal processes, a NRI can use to resolve disputes regarding property in India, including through the proper legal processes, without needing to travel to India.

Common Types of Property Disputes Faced by NRIs

Despite living overseas, a number of NRIs still hold properties in India and their distance makes them a lot more vulnerable when it comes to risks of illegal or wrongful possession of their property. The following are the types of disputes that are most common to NRIs:

1. Illegal Possession / Encroachment

NRIs’ private property is always at risk of illegal occupation by someone, usually a distant relative or neighbor. But sometimes the local land mafia, other builders etc., grab a vacant piece of land.

2. Fraudulent Sale / Transfer

Occasionally, family members or caretakers simply make false documents and they sell the property without telling the NRI. These frauds are often difficult to detect quickly because NRIs may not physically visit their property regularly.

3. Tenant Disputes

NRIs will often rent out their property, but there will be some tenants who will not vacate even though the lease is up. Evicting a tenant through the law requires a fair amount of time.

4. Inheritance and Family Conflicts

Property can cause rivalries between brothers and relatives for generations, particularly in the absence of a decent Will or legal instrument.

5. Builder or Real Estate Scam

NRIs can face builders who go to great lengths to take their money for a property they may have no intentions of completing or there is likely many delays or unfulfilled promises for under-construction properties.

Laws and Acts Governing NRI Property Rights in India

It is necessary to know the laws which protect the rights of NRIs, to resolve property disputes, and the various Indian Laws which relate to residents, and non-residents.  These Indian Laws can also extend to both residents, and non-residents of India.

Some of the main acts are:

1. Transfer of Property Act, 1882

This law deals with property matters such as how property can be legitimately transferred between persons by sale, gift, lease, mortgage, or exchange.

2. Indian Succession Act, 1925

This act is mostly for Christians, Parsis, others (not Hindus and Muslims). Essentially it is about how property is inherited upon death – particularly where a Will is made.

3. Hindu Succession Act, 1956

The law determines inheritance of property rights among heirs relating to the Hindus, Sikhs, Jains, and Buddhist peoples. It explains how heirs can receive and divide property ownership if there is no Will.

4. Special Relief Act, 1963

This act essentially allows persons to initiate suits for matters relating to possession, or cancellation of fraudulent transfers, or specific performance (called upon someone to fulfill a contract).

5. Code of Civil Procedure (CPC), 1908

This law provides the procedure for civil case (including property cases) in Indian courts.

6. Bharatiya Nyaya Sanhita, 2023

BNS, 2023 deals with criminal matters relating to humans and properties (previously IPC).

7. Registration Act, 1908

This act provides rules relating to proper registration of properties and their documents, such as deeds of sale, and PoA (Power of Attorney).

8. Real Estate (Regulation and Development) Act, 2016 (RERA)

Protects buyers from fraud and construction delays in real estate by builders.

Step-by-Step Legal Process to Resolve Property Disputes

Resolving property disputes in the India requires patience, accurate documentation and correct legal procedures. Here is a step by step process that NRIs can follow:

Step 1: Determine the Nature of the Dispute

It is important to ascertain what the dispute is. Is it illegal possession, forged documents, non-payment by a tenant, inheritance dispute or builder fraud? The nature of the dispute determines if it is civil, criminal or both.

Step 2: Collect Ownership and Related Legal Documents

You need to collect all relevant documents pertaining to the property you are in dispute over. These may include the following:

• Title deed / Sale deed
• Property tax receipts
• Mutation
• Encumbrance certificate
• Will or succession documents (if inherited)
• Rent agreement (if your dispute is tenant related)
• All correspondence with all parties related to the dispute
• All documents related to money exchanges.

These are the documents that will be relied upon in court or mediation.

Step 3: Retain a Lawyer that knows Property and NRI Laws

You should retain a lawyer you trust and one that knows the property laws and dealt with NRI’s. The lawyer should advise the respective NRI of their rights and what actions they can take.

Step 4: Send a Legal Notice

The lawyer may send a legal notice to the other party, asking them to leave, settle or return the property before a lawsuit is filed. This is often the first step in formal action and it could turn into a resolution before the formal dispute goes further into trial.

Step 5: File a Case in the Right Court

If the other party does not get back to you or refuses to settle you need to file in court. Depending on the case can be:

• Civil suit: eviction, partition, or suit for title or declaration
• Criminal complaint: if fraud, forgery, or trespass
• Consumer complaint: if applying to Real Estate Regulation Authority (RERA) for builder issues
• Depending on the value and place of property the court will vary.

Step 6: File a FIR (if it is a crime)

If the issue is downright sale, cheating, or trespass, you may also file an FIR at your nearest police station or contact the NRI Cell in some states.

Step 7: Obtain court order

Whether or not the decision is made in the favor of the party, once the case moves to a final disposition the court will either direct an order of possession, payments of damages, or an order to cancel any fraudulent documents. If the other party does not follow the Order the lawyer will assist in getting it enforced.

Legal Options Without Coming to India

This is a common issue many NRIs have, do I have to physically go back to India to deal with a property dispute? Well, fortunately, you can take legal action on property disputes in India without having to come back to India by following the legal options outlined below:

1. Special Power of Attorney (PoA)

An NRI authorizes a trusted person such as a family member or a lawyer practicing in India to act on his behalf. The person authorized as PoA must:

• Sign all documents
• Attend court hearings
• Correspond with government (local) offices
• Manage or sell (if permitted) property

PoA must be signed before an Indian Consulate/Embassy outside of India then sent to India and registered under the local sub-registrar office of the Registration Act, 1908.

2. Appointing a Lawyer

You can appoint directly an Indian lawyer to be your representative for all future legal proceedings. Using your PoA, the lawyer can on the NRI’s behalf:

• File suit and litigate
• Appear in court
• Receive updates and pass those to you

3. Online Filing in Some States

In some regions of India, courts now allow e-filing and virtual hearings by video-conference, especially in civil matters. These developments save time and thus eliminate the necessity to personally show up in court.

With these possibilities, NRIs can take legal action effectively without having to leave their host countries.

Inheritance and Succession Disputes

Inheritance and succession are perhaps the most delicate and frequently contested issues faced by NRIs, particularly with inheritance of property from parents or family members. In India, when someone dies leaving property behind, the property is then distributed as per the terms of the deceased’s Will and if Will is not present, the property is distributed according to the personal laws.

If the deceased had previously made a valid Will, the property is usually passed according to the deceased’s instructions in that Will. In those cases, after the death of a relative and to create effective legal transfer of that property, the process includes obtaining a probate (a court-certified copy of the Will) and creating these two documents can be crucial if you are dealing with that property in a city such as Mumbai, Chennai, or Kolkata. Unfortunately, many Indian families do not make Wills which contributes to the complexities involved.

In the absence of a Will, distribution of property is done according to religion. For Hindus, Sikhs, Jains, and Buddhists, the Hindu Succession Act, 1956 will determine the property division. For Christians and Parsis, the Indian Succession Act, 1925 applies to property distribution. Inheritance for Muslims is based upon Muslim personal law which distributes fixed shares to the heirs.For NRIs, to access inherited property, a Legal Heir Certificate or Succession Certificate may be required through the courts, but this is situation dependent.

Protection Against Property Fraud

One of the greatest challenges faced by NRIs is safeguarding their property in India from fraud and other illegitimate uses. Since an NRI is not around to regularly monitor their property, a dishonest person (often family) may misappropriate it. NRIs can take practical steps to protect their property.

First, make sure that the property’s title documents are in your name and validly registered in the office of the local sub-registrar. You should always verify that the local revenue records show the property is mutation in your name, since this is evidence of legal ownership and is useful if a person lays an illegal claim.

The second practical step is to periodically check the online land records, if applicable, (available in most states) through the state government portal. Digital records can give you your ownership information and indicate a change in ownership or any other suspicious activity.

Role of Courts and Jurisdiction

If you are a non-resident Indian (NRI) and are going to take legal action on some property dispute in India, the first step is determining the proper court with jurisdiction over the dispute. Jurisdiction varies depending on the location of the property and the type of dispute. Generally speaking, for most civil disputes, such as claims of ownership; eviction; partition; etc., the approach has to be to the civil court in which the property is situated. If it is a matter of fraud, forgery, illegal possession, or cheating, a criminal complaint may be filed with the local police or magistrate where the incidents occurred and the officers may proceed under the corresponding sections of the BNS.

In case of disputes with real estate builders or housing projects that have been delayed, NRIs can approach the RERA Authority or file a complaint before a Consumer Court. It is also necessary to take cognizance of limitations given under the Limitation Act, 1963 because it becomes relevant whether you made your complaint during the time provided by statute, or if your delay resulted in the court denying you to proceed.

It is important to go to the correct forum for the dispute as it will lead to a better resolution and can be done in a timely manner.

FAQs on NRI Property Disputes in India