bangaloreadvocates: October 2015

Tuesday 20 October 2015

PURCHASE OF PROPERTY BY NRI

PURCHASE OF PROPERTY BY NRI

Many Indians are moving out to other Countries in search of jobs and returning back only after retirement. Nevertheless, their desire to own a house in their motherland never dies, which, no doubt, is an asset, but is also source of revenue for the Government.

Acquisition and transfer of immovable property in India by Non-Resident Indians (NRIs) and Persons of Indian Origin (PIO) are regulated by certain legislations, which envisages certain terms and conditions, as discussed below:

FERA and FEMA:

The earliest Law regulating transactions involving acquisition and transfer of the immovable properties by NRIs and PIO is the Foreign Exchange Regulation Act 1973 (FERA) and the same has been now replaced by Foreign Exchange Management Act, 1999 (Act 42 of 1999) (FEMA), which came into force from 1-6-2000. FEMA has authorized the Reserve Bank of India to form guidelines with regard to acquisition of immovable property by NRIs and PIO.

The following are the explanation given to the frequently used terminologies and certain mandatory pre-requisites before acquiring or transferring the property by NRIs or PIOs, which does not require prior permission of RBI.

Non-Resident Indians:

FEMA defines a NRI as a person not residing in India. This category includes: Indian citizens, who reside outside for employment, carrying on any business, vocation or any other purpose indicating definite period of stay outside India,. Indian citizens employed abroad with foreign Government, international agencies like UNO, IMF, World Bank etc.,

Employees of Central and State Governments deputed abroad on temporary assignments or posted to their offices. This includes Indian diplomatic missions.

An Indian citizen who goes abroad on a student visa and takes up appointment after the completion of studies will be regarded as a person residing outside India only after taking up a job abroad. Non-Resident Indians are not regarded as residents in India for holidays, business, etc. Persons residing in India mean a person residing in India for more than one hundred and eighty two days during the previous financial year, but do not include the persons above.

PIOs:

A PIO means a person residing outside India, holding an Indian passport, whose father or grandfather was an Indian citizen by virtue of the Constitution of India or the Citizenship Act, 1955. However, the citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan do not fall under this category.

Acquisition/Transfer of ImmovableProperty by a NRI:

NRIs can acquire or transfer any immovable property in India except an agricultural land, plantation property and farmhouse. However, they can transfer the same to an Indian Citizen residing in India.

Acquisition and Transfer of immovable property by PIO:

Following are the permissible normsfor a PIO:

PIO may purchase any immovable property except agricultural land, farmhouse and plantation property provided the funds are met out of the funds received in India by inward remittances from outside India or from the funds held in non-resident account, complying with provisions of Act and guidelines of RBI. PIO may accept any immovable property by way of gift from a person resident in India or from NIR or a PIO, except agricultural land, farmhouse and plantation property.

Repatriation of Sale Proceeds:

Prior permission of the RBI is required to repatriate the sale proceeds of immovable property outside India, by a NRI, or his successor. The authorized dealer is permitted to allow repatriation of the sale proceeds of immovable property in India, outside India except agricultural, plantation property or farmhouse to a NRI or to a PIO on following conditions:

The acquisition of the immovable property by the Seller is in compliance with the Law and regulations in force. The property is sold after three years from the date of acquisition or from the date of payment of final installment of sale price, whichever is later.

The amount to be repatriated does not exceed the amount paid for acquisition in foreign exchange received through normal banking channels or funds held in foreign currency Non-Resident account or equivalent to foreign currency on the date of payment if acquired through Non-Resident external account.

Prohibition on acquisition ortransfer of immovable property in India:

There is a complete prohibition against acquisition or transfer of immovable property in India by the citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Nepal and Bhutan without the prior permission of the RBI. However, they may acquire or transfer immovable property on lease, which should not be beyond five years.

Housing loan in rupees to aNon-Resident:

NRI or a PIO is eligible for a housing loan to acquire residential accommodation in India subject to the following conditions:

Loan to be availed from an authorized dealer or a Housing Finance Institution approved by the National Housing Bank.

Amount of loan, margin to be met and repayment period will be as applicable to a person residing in India.

The loan proceeds are not allowed to be credited to Non-Residential External (NRE)/Foreign Currency Non-Resident (FCNR)/Non-Resident non-repatriable account of the borrower.

Loan should be fully secured. The acquired property will; have to be given as security by equitable mortgage. If needed, other assets of the borrower will have to be given by way of lien.

The repayment of loan, interest and other charges shall be by the borrower out of remittances outside India through normal banking channels.

This may be from the funds of the borrower in his Non-Resident External (NRE)/Foreign Currency Non-Resident (FCNR) Non-Resident Non-repatriable (NRNR)/Non-Resident-Ordinary (NRO)/Non-Residential Special Rupee (NRSR) account in India. The rental income of the property acquired may also be used for repayment.

ForeignEmbassies/Diplomats/Consulate Generals:

Foreign Embassy/Diplomat/Consulate General have been allowed to purchase/Sell the immovable property in India other than the agricultural land/Plantation property/Farm house provided (i) Clearance from Government of India, Ministry of External Affairs is obtained for such purchase/sale, and (ii) the consideration for acquisition of immovable property in India is paid out of funds remitted from abroad through banking channel.

In compliance with the mandatory conditions envisaged in the act discussed above, it is also important and advisable to invest in the property free from any legal hassles, which could validly and legally convey the ownership over the immovable property.

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Monday 19 October 2015

PARTITION OFFAMILY PROPERTY

PARTITION OFFAMILY PROPERTY

Properties and human beings are inseparable. With progress and social change over the ages the urge to own property, wealth has acquired demonic proportions. In the present day world, immovable properties are the most valued assets one can possess.

The desire to own material possession reared its head in the inquisitive mind of the Stone Age man. Thus women, children came to be his first personal assets followed by immovable properties. While literacy and social outlook have elevated the status of women and children, there has been no change worth the name as to the status of immovable property as the personal asset of the human being. So, as long as this state of affairs continues, problems relating to property transfer will persist. From Stone Age to cement age, it has been a long haul.

What is Partition?

Partition is division of property held jointly by Co-Owners. When a property is divided each member becomes the sole Owner of his portion of the property. Each divided property gets a new title and each sharer gives up his or her interest in the estate in favor of other sharers. Therefore, partition is a combination of release and transfer of certain rights in the estate except those which are easements in nature.

Partition is neither a gift nor a transfer of property. It merely breaks a joint right into several rights. It is not acquisition of property or exchange of property. It is a combination of release and conveyance of the rights of the property in favour of individuals. And therefore it can be effected orally. Partition is not transfer, but when it assumes the form of transfer, the intention may be to hoodwink the Creditors.

The basic character of joint Hindu family is that each member has inherited title to the property by birth. Each member has joint title to the entire property and that joint enjoyment of the title is converted by partition into separate title of the individual Co-Owner for his enjoyment. Therefore, it is now an established fact that partition is not transfer, but transformation of joint property.

There are three types of Co-Owners; Joint tenants or tenants-in-common; Hindu Joint Family owners or Co-Parceners; partners of a partnership firm.

Under the Hindu Law in general everyone being a Co-Owner in a joint ownership has a right to claim his share and such right cannot be denied to him if the property is held as joint tenants. Since joint tenancy is unknown to Indian Law, there is not much difference between joint tenancy owners and tenants-in-common.

Christians and Muslims hold properties as tenants-in-common or as joint tenants and partition of such immovable property can happen by mutual consent or by partition deed or by Court decree or arbitration.

Effects of Partition:

When a property is divided into more than two parts, the Co-Owners of the different portions shall agree to hold their portions separately as absolute Owners and each of them shall make a grant to release his share from portions given to others. Necessary covenants in a partition deed are about encumbrances on the property, quiet enjoyment, custody and production of title deeds, easements of necessity, payment of rent and taxes and performance of other conditions of lease, if any, etc. Partition of joint property is not an exchange.

If it is reduced into writing, it must be registered in the case of immovable properties. Deed of partition requires registration. Mere writing of previous partition does not require registration. Mere list of properties allotted to different Co-Owners does not require registration. Unregistered deed of partition though not admissible in evidence to prove the fact of partition, cannot be used to prove that a particular property was allotted to a particular Co-Owner as his share.

Partition means collapse of joint ownership. It destroys the harmony of joint ownership and of possession. A large property falls into pieces over a generation or two. The land is very much there in bits and pieces in the name of different Owners.

Stamp Duty:

The Stamp Duty payable on partition varies from State to State. In Karnataka, it depends on nature of property.

In case of partition of movable property, it is Rupees Two Hundred and Fifty for each share.

If the property is converted for non-agricultural purpose or meant for non-agricultural use, it is Rupees One Thousand for each share within jurisdiction of Municipal Corporation, Urban Development Authority, Municipal Councils or Town Panchayats and Rupees Five Hundred per share in other areas.

The partition of agricultural land attracts Stamp Duty of Rs. Two Hundred Fifty for each share. If the property involved in partition is combination of any categories mentioned above, the Stamp Duty is maximum of the duties prescribed. In case an Agreement of partition is executed and the partition follows in pursuance of such Agreement, the Stamp Duty payable on partition deed is reduced to the extent of duty paid on Agreement; but shall not be less than Rupees Fifty. The partition should not be mistaken with partnership. Partnership is coming together of persons, whereas partition is parting of persons.

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Saturday 17 October 2015

IMMOVABLE PROPERTIES HOLDING BY COMPANIES

IMMOVABLE PROPERTIES HOLDING BY COMPANIES

As any individual could hold, enjoy and dispose of property in his or her name, the same way a company also could deal with the property in its name, though it is an inanimate body. A Company is an artificial person created under the Companies Act 1956 with the right of perpetual succession and use of its unique and individual common seal. Mainly, there are two types of companies’ viz., Private Limited Company and Public Limited Company. A private limited company can be formed by two persons with a restriction of maximum membership to 50 persons and a public limited company can be formed with minimum number of members at seven. There are no restrictions on the maximum number of members. A company is a legal person different from its members/shareholders and it possesses the right to enter into valid contracts for sale, purchase, to hold, to lease out or take on lease and to mortgage immovable properties in its own name.

Under the Companies Act, 1956 registration of both the Private Limited Company and the Public Limited Company is compulsory for which purpose the formalities enumerated in the Act are to be complied with. The Registrar of Joint Stock Companies will issue a certificate of incorporation and the certificate of commencement of business on being satisfied of the compliance of the formalities. However, the certificate of commencement of business is not required to form Private Limited Companies.

Memorandumand Articles of Association:

The Memorandum and Articles of Association are important documents of a company. The memorandum of association refers to the name of the company, objectives of the company, liabilities of its members, capital of the company and the subscription clause and articles of association deals with the powers, duties, liabilities of the Board of Directors, share holders/members and rules and regulations governing the management of the company.

Common Seal:

As Companies are inanimate bodies, all the official documents belonging to or relating to the company are executed by the authorized signatory and shall invariably have the common seal of the company affixed on such documents to authenticate the same as the documents of the company.

AuthorizedOfficers:

Resolution passed in the Meetings of the Board of Directors or by an authorized Committee of the Board of directors of a company authorizes any of its Officers to represent the company and act on its behalf only to the extent Authorities are delegated in the resolution. Such persons, however, are required to affix the common seal of the company to supplement their signature/s and to authenticate the company documents.

The Articles of Association specifically deals with powers of the Directors regarding sale, purchase and mortgage of immovable property. A Company could appoint a Power of Attorney holder empowering that person to execute deeds on behalf of the company and such a document should bear the company's common seal. If empowered the Directors, Managing Agents, Secretary, Treasurer, Manager or any other authorized official to authenticate the documents on behalf of the company.

Apart from the Register of Charges maintained by the Registrar, a company is also duty bound to maintain a separate Register of Charges created on its properties. This Register of charges is open for inspection by the members of the company and its creditors.

Proceduralaspects to be borne in mind:

The Companies Act, 1956 restricts the powers of the Board of Directors to sell, lease or otherwise dispose of the whole or substantially the whole of the undertaking, remit or give time for repayment of any dues by a director, invest, otherwise than in trust securities, borrow money in excess of the aggregate of the paid up capital of the company, contribute to charitable and other funds not directly relating to the business of the company as are enumerated in clauses (a) to (e) of Section 293(1) and the consent of the General Body of the Company is mandatory to sell, lease or otherwise dispose of the whole or substantially the whole undertaking of the company. Likewise, the consent of the general body of the company is necessary to borrow in excess of the aggregate of the paid up capital and free reserves. The only exception provided is for the temporary loans taken by the company from its Bankers in the ordinary course of its business.

ImmovableProperties of the company:

According to the Transfer of Property Act, 1882 a living person includes a company. However, it is necessary that the person who deals with a company should know the contents of the Memorandum of Association and the Articles of Association to ascertain whether the transaction which is being entered into is as per the objectives and the powers and rules regarding governance of the company and are not ultra virus of the powers conferred on a company.

Precautions:

While transacting with a company it is necessary to ascertain at the first instance that the property is not whole or substantially whole part of the undertaking/company. If the transactions involve whole or substantially whole part of the undertaking, it is necessary to ascertain whether the consent of the general body is obtained. However, where the ordinary business of the company is selling/leasing of properties, this restriction will not apply. Similar caution needs to be exercised when the company borrows or mortgages its properties in excess of its paid up capital and free reserves.

ForeignCompanies:

The Foreign companies, who enter into any kind of transaction in India, are governed by Foreign Exchange Management Act, 1999[FEMA]. According to the FEMA, a company registered outside India, which has established a branch Office or other place of business in India for carrying on any activity in accordance with Foreign Exchange Management Regulations 2000 may acquire any immovable property in India which is necessary for or incidental to carrying on such activity after complying with the requirement of the Laws, rules, regulations and directions as are applicable.[Regulation No.5] Such company has to file form III with RBI within 90 days of acquiring such property.

For More..........:

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Friday 16 October 2015

RESTRICTIONSON THE USE OF IMMOVABLE PROPERTY

RESTRICTIONS ON THE USE OF IMMOVABLE PROPERTY

Every person who has a valid title over his immovable property has a right to use, enjoy and deal with his property for a Lawful purpose and in a peaceful manner. But, there are certain restrictions even for such enjoyment. The restrictions imposed are for various purposes and mostly on the ground of public good and tranquility.

AbsoluteTitle:

According to Section 11 of the Transfer of property Act, 1882, where on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer has a rider clause that such interest shall be enjoyed by the transferee in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction. Further, Sec 11 stipulates that there can be no restriction on the enjoyment of property which has been transferred absolutely. Similarly, the vendee of an immovable property is entitled to ignore the condition which cuts down enjoyment of his absolute right over the property. In cases, where the property has passed absolutely to the Purchaser, any direction contained in the sale deed contrary to the absolute enjoyment is void and is not enforceable.

Exception:

But, there is an exception to this principle. The same section 11 provides that if any restrictions are imposed on a portion of an immovable property for purposes of securing the beneficial enjoyment of another portion of the same property, then the restrictions imposed shall be construed to be valid. This kind of situation arises mostly in cases where a portion of the property is transferred and another portion is retained by the Owner, the Owner may put some reasonable restrictions on the use of the property sold for the beneficial use of portion of property retained by him. However, such restrictions are not binding on third parties who are not a party to the contract.

Restrictionsof the owner:

Section 40 of the Transfer of property Act also deals with restrictions on the use of the property by its Owner. According to this Section, where for more beneficial enjoyment of his own immovable property, a third person has independently of any interest in the immovable property of another person, or any easement there on, a right to restrain the enjoyment in a particular manner of later property. This is a right of a third person, who is not a party to the contract. This right is available against transferees. But such rights are enforceable against a transferee with notice or against a transferee who got the property without consideration. They are not enforceable against transferees without notice or against transferees for consideration.

Land conversion: Section 95 of the Karnataka Land RevenueAct, 1964, stipulates that the agricultural land cannot be used for non-agricultural purposes without the permission of the Deputy Commissioner (DC) and Section 97 provides that the non-agricultural land cannot be used for agricultural purpose again without permission of the Deputy Commissioner. This is mainly to control the conversion of agricultural land and to protect agriculturists.

Section 109 of the Karnataka Land Reforms Act, 1961 exempts certain category of institutions from the restrictions on the use of agricultural land for non-agricultural purposes such as; industrial development, educational institutions, places of worship, housing projects, horticulture, flori culture and agro-based industries.

ZonalRegulations:

Sec 14 (1) of the Karnataka Town and Country Planning Act, 1961 provides that On and from the date on which a declaration of intention to prepare an outline is published under Sub-Section (1) of Sec10 every land use, change in land use and every development in the area covered by the plan shall conform to the provisions of this Act and the outline Development plan and the regulations as finally approved by the State Government under sub-section (3) of section 13.

Sec 14 (2) of the Act provides that no such change in land use or development as is referred to in sub-sec(1) shall be made except with the written permission of the planning authority which shall be contained in a commencement certificate granted by the planning authority in the prescribed form.

According to Sec 15(4) of the Act if any person does any work on, or makes any use of any property in contravention of Sec 14(1), the planning authority may direct such person by notice in writing, to stop any such work in progress or discontinue any such use, and may after making an inquiry remove or pull down any such work and restore the land to its original condition or may take any measure to stop such use.

Section 300 of the Karnataka Municipal Corporations Act, 1976 provides that the construction or reconstruction of a building shall not begin unless and until the Commissioner has granted permission for the execution of the work.

Sec 304 of the Act provides that the Commissioner shall not permit the construction of any building of public entertainment or any addition thereto, if such building is; [a] within a radius of 200 meters from any residential institution attached to a recognized educational institution such as, a college or High school or Girls School or Public Hospital with a large indoor patient ward or an orphanage containing one hundred or more inmates, [b] situated in any thickly populated residential area which is either exclusively residential or reserved or used generally for residential as distinguished from business purposes, [c] located in any area reserved for residential purposes by any housing or planning scheme or otherwise under any enactment.

Penal action:

Use of agricultural lands for non-agricultural purposes, residential buildings for commercial or industrial purposes, violation of zonal regulations would attract penal action against the perpetrators according to Law. The Government of Karnataka under Karnataka Ordinance No. 3 of 2006, inter alia, has declared that sale of agricultural lands for non-agricultural purposes without getting such lands converted or without obtaining approval of the competent authority is an offence punishable with imprisonment of three years and fine of Rupees ten thousand. Similarly, under the same ordinance, unlawfully entering or occupying any Government land with the intention of holding such Government land is an offence punishable with imprisonment for one year and fine of rupees five thousand. Further, the department of forest and environment restricts/regulates the use of the property near the sea coasts and catchment areas.

Therefore, it is advisable that the users of immovable property may know well in advance, the statutory and other restrictions that are imposed on the property for peaceful possession and enjoyment of such property.

For More..........:

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Thursday 15 October 2015

Scrutiny leads the way to a dream house

It is the desire of every person to own a shelter. At the end of long years of employment some manage to gather the required amount to buy the property while for the more fortunate it is at their desire. However, buying a property always requires a huge investment and careful selection to avoid chances of future disappointments. Careful selection, however difficult the process may be, can go a long way in ensuring value appreciation and peaceful enjoyment of the property, as it covers selection of location, right vendor, etc.,

The Bangalore Development Authority is the planning and developing agency in this area. Any layout in the metropolitan area of Bangalore must be approved by the BDA. This is mandatory as per the Karnataka Town and Country Planning Act, 1961, and BDA Act 1976. So it is essential to make sure that the site you purchase is in a BDA approved layout or has been approved by any other competent authority.

There are many agricultural lands in the metropolitan area and in areas abutting it.

The Karnataka Land Reforms Act does not allow purchase of agricultural land by the non-agriculturists; unless it is converted for non-agricultural purpose. Even house building co-operative societies are covered under this restriction.

Revenue Site

Another dangerous area is a revenue site. Revenue sites are formed on agricultural lands, which are not converted.

Using such sites for residential purpose is against the law. These sites are not entitled to power, water supply and sewerage connections. Most landowners use Form No.9 & 10 to confuse and convince the purchasers and these are generally fabricated documents, which are not issued by any statutory authority and hence not genuine.

Government acquired land

The government is vested with powers to acquire lands for the purpose of development. Firstly, the Land Acquisition Officer announces a preliminary notification for acquisition of land and calls for objections from the public or the affected party. The affected party has to file objections within 30 days, stating the developments done on that property after obtaining all permissions from the statutory authority concerned and also taking into account the real value of the property. After hearing the case of the affected party, the government may delete the said survey number from the notification and announce the final notification. After the final notification, the government may pass an award, after which, such of the properties which have a mention in the final notification is considered as acquired property. Notified lands are prohibited from alienating. But many owners sell such notified/acquired lands to gullible purchasers by using Form Nos.9 and 10. One should be very careful to ascertain as to whether the property was acquired or not and has to check-up with the acquisition authorities in this regard.

Comprehensive development plan

The comprehensive development plan (CDP) is in operation in the Bangalore metropolitan area. This plan has divided the metropolitan area into different zones. Each zone is earmarked for a particular activity which are, residential: commercial: industrial which includes light and service industries, medium industries and heavy industries: public and semi-public Utilities and Services; Parks and open spaces, play grounds including public recreational area, transport and communication, agricultural land and water sheet (Water body).

Activity other than that stipulated in such zones is not permitted. One must always ensure that the site purchased is used in conformity with the zonal regulations, For example, houses for residential purpose should be constructed only in the residential zone. With regard to this, the zonal regulation map is available at the BDA office and it is essential to verify the Zonal Regulation Map before purchase of property.

Further, Village Panchayats are also entitled to issue the Khata but only in respect of the village Panchayat area and a further 200 metres from the limit of Gramathana area, which is marked as village area in the survey map issued by the Survey Department.

Selecting a location

Location is the most important aspect while investing in a property. It is advisable to ensure that there are no slums nearby, a place of worship attached to the property, drainage line close to the property. The purpose of buying a property often determines the location. It may be for self-occupation as a residence or for investment purposes. If the house/flat is for own occupation, a residential locality not far away from the heart of the city is preferable. If any person offers a property at a cheaper rate than the prevailing market rate, then it is advisable not to accept the offer, as it may have certain hidden problems, which are difficult to trace out. Some people may try to convince you by saying that there is a lot of demand for the property and offer you very little time to make a decision on buying the property. One should not yield or be pressured by such tactics but ensure proper verification and examination of documents with extraordinary care before committing. Always select property in approved layouts to get all the facilities within the layout. The area should have well developed roads; good drainage and the civic staff should do the garbage clearance regularly. Low-lying areas should be avoided as they get inundated during monsoons.

Vaastu Aspect

Vaastu is of individual preference, however people are increasingly adopting Vaastu principles for their property and it will be worthwhile, keeping in mind the value appreciation and future sale, to ensure that the property is as per the Vaastu guidelines.

Non-availability of parking space and traffic restrictions have an adverse effect on the value of the property. Accessibility to the railway/bus stations, airport, star hotels and availability of infrastructure facilities play an important role.

Selecting a vendor

While selecting the vendor/promoter, you need to look into his track records. This can be done by paying a visit to the earlier projects of the vendor or in case he is an individual, enquiries could be made with people who had transactions with that individual or with the people living in a close proximity to the property. Similarly, you have to select a reliable real estate dealer to select a suitable property.

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Wednesday 14 October 2015

A QUESTION OF TRUST

A QUESTION OF TRUST

It is difficult to define the word 'Trust' in the legal sense. The Indian Trusts Act 1882 defines Trust as an obligation connected to property ownership, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner. Even this definition does not fully capture the essence of the term. However, it is easier to describe what a Trust is.

An operational Trust has at least four ingredients. One is the 'Author of the Trust' who creates the Trust. He reposes confidence or trust in one or more persons to execute the objects of the Trust. The persons in whom the confidence is reposed are the 'Trustees.' The person for whose benefit the Trust is created is the 'Beneficiary.' The initial money raised for the trust is its 'Corpus.' The Trust mayor may not have immovable properties. If you are dealing with a Trust property or planning to purchase property from a Trust, you have to first check out whether it is a Private or a Public Trust, or whether it is a Religious Trust. Depending on the type of Trust, the approach will vary.

One of the ways of finding out whether a Trust is a Private or a Public Trust is to see what its objects are, and who the beneficiaries are by checking out the Trust Deed. If the beneficiaries are identifiable, then most probably it is a Private Trust. If specific beneficiaries are not identifiable and the beneficiaries are the general public or sections of the public, then it is a Public Trust.

Bequests

This is very critical in dealing with the properties of a Trust. The next thing is to see as to how the property was acquired by the Trust. The Trust can acquire properties by bequests, that is, testamentary dispositions made by persons through a will. It can acquire properties by outright purchase or by other modes. Frequently, properties are also endowed or orally transferred to the Trust. Separate declarations are made confirming the transfer. Though there may not be any registered document, giving property to a Trust by a valid endowment or oral transfer is valid. This has to be ascertained from the documents.

A distinction has to be made on how the property is brought in, and on the constitution of the Trust. As per the Indian Trusts Act 1882, a Trust connected with an immovable property has to be constituted by a non-testamentary instrument in writing signed by the Author of the Trust or the Trustee and registered. The Will of the Author of the Trust or the Trustee can also constitute it. As far as movable properties are concerned, a Declaration of Trust has to be made and ownership of the property transferred to the Trust. A Trust cannot be constituted in a fraudulent manner or to defeat the rights of persons claiming interest in the property.

You also have to check whether there is a complete investment of right, title and interest of the Author of the Trust or the Donor in the property. The documents to be checked could include declarations, tax records, and other documents evidencing dealings of the Trust. As far as sale of Trust property is concerned, especially a Public Trust, it is the deed, which governs the same.

There should be a clear provision in the Sale Deed enabling the Trustees to sell property. If this provision is not clearly found in the Trust Deed, then court permission is required for the sale. This permission has to be obtained depending on whether the Trust is a Private or a Public Trust. Any direction contained in the
relevant Trust Deed for affecting the sale has to be strictly met. In the case of Public Trust or Charities, permission from the Income Tax Department may be required.

The Trust must be able to give you the title deeds and deliver vacant possession of the property, unless otherwise agreed. The persons signing on behalf of the Trust should be empowered under the Trust Deed or as per directions of court. The Sale Deed or Conveyance has to be stamped and registered as usual. Any litigation pending against the Trust should not affect the transfer of property.

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Monday 12 October 2015

‘A’ KHATA PROBLEMS OF BANGALORE PROPERTIES

‘A’ KHATA PROBLEMS OF BANGALORE PROPERTIES

Property house owners underneath the bounds of Bruhat urban center MahanagaraPalike (BBMP) face ton of confusion and hurdles in getting khatas from the BBMP. Khata primarily is a crucial property identification document issued by the native civic body to acknowledge the possession of a property in their limits. Khata contains the main points of property like name of the owner, dimension of the plot or size of the building, location of the property and different details that helps properly house owners to file land tax. aside from this khata is needed for applying for building licence, for trade licence, for loan from any banks or money establishments etc.,

In 2007 seven town municipal councils (CMC) Kengeri city Municipal Council (TMC) and one hundred ten villages, were brought underneath the administration of urban center Mahanagar Palike (BMP). Thus, nearly 2/3rd space was extra to the prevailing 1/3rd space underneath BBMP. solely properties that were approved by the urban planning authorities and a few different properties strictly orthodox to the bye laws of the BBMP are issued ‘A’ Khata. For the remaining properties within the freshly extra areas the house owners will pay tax to BBMP and obtain the ‘B’ khata kind. in keeping with BBMP there's nothing like ‘B’ khata, however it's solely associate extract of the B register maintained by the civic authorities to create entries of the taxes collected on the properties.

‘A’ Khata is needed to be obtained from the BBMP to acknowledge the possession of a property that makes the house owners eligible to receive civic amenities extended to them. But, most of the properties within the recent CMC areas currently returning underneath BBMP have several disadvantages in obtaining ‘A’ khata as several irregularities concerning land conversion, building bylaw violations etc., square measure rampant in these properties. to get ‘A’ Khata the land ought to be DC regenerate, house owners ought to have paid up to now tax and additionally paid betterment charges to the BBMP concerning regenerate lands. All political parties guarantees the general public regarding ‘Akrama – Sakrama’ theme for regularizing unauthorized / building violation constructions. But, nothing is occurring during this regard until date.

The Government should take concrete steps to resolve the issues of property house owners in urban center town either by implementing the antecedently planned theme of ‘AKRAMA – SAKRAMA’ or different theme, to regularize the property ownerships by assembling only once penalty / fees, facultative the voters to use and acquire ‘A’ Khata for his or her properties. The urban planning authorities should be a lot of argus-eyed and not permitting illegal developments within the starting itself.

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