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Commercial Real Estate

Commercial Real Estate is basically a real estate deal/transaction which takes place for the main purpose of commercial matters.

CRE lending is slightly tricky as it involves huge amount in transaction.

These are some steps to be argued before you go for CRE

  • Find a challenging/ motivated CRE lending agent.
  • Before you enter into CRE, a real estate due diligence is necessary, which will give hand in future transactions as well as it will be useful for understanding the real estate firm you are dealing with. Usually high skilled professionals are hired for this kind of investigation
  • Once you are satisfied with the due diligence process you can step further with the agreement signing process which is more essential for the one reason that in Indian courts property deals cannot be enforced with oral agreements.
  • Agreements must be transparent, verified by professionals for the smooth functioning of further arrangements.
  • There are some private banks which provide special interest rates/ facilities for genuine CRE transactions.
  • Usually in high profile transaction of CRE the lease period is 99 years (subject to change as well)
  • Commercial use can be anything but not limited to Shopping complex, Star hotels, MNC’s etc.

Mortgage– Mortgage for commercial transaction is same as the residential transaction. The main black out difference is that the property must be on commercial in nature.

How to Register a land in Kerala

According to the Indian registration act of 1908, in Kerala all documents pertaining to transfer of immovable property of gift or lease (one year lease) have to be registered. This document must be prepared by a competent person who can be a lawyer or any other licensed document writer. The sub registrar is the competent authority for Kerala land registration. All supporting documents will have to be presented before him.  After all the legal formalities have been completed, the deed will be prepared on a stamp paper.  The stamp paper should be in par with the value of the property which is transferred. Stamp paper should be in the name of the purchaser.  The transfer or should be present in the office of the sub registrar at the time of transfer of property. The registration fee will also have to be paid. The identity of seller, buyer and the witnesses may also be checked.

It is important to value the land correctly as the requisite stamp duty will be a condition precedent for registration. The sub registrar may reject the registration if there is inadequate payment of stamp duty.

The documents have to be drafted properly and also there should be proper knowledge of administrative orders for proper registration.

If you wish to know more details on How to Register a land in Kerala, please call us on 0091 – 9847182002.

Acquisition and Transfer of immovable property in India

Acquisition or sale of property

Acquisition of immovable property in India by persons resident outside India (foreign national) is regulated in terms of section 6 (3) (i) of the Foreign Exchange Management Act (FEMA), 1999 as well as by the regulations contained in the Notification No. FEMA 21/2000-RB dated May 3, 2000, as amended from time to time. Section 2 (v) and Section 2 (w) of FEMA, 1999 defines `person resident in India’ and a `person resident outside India’, respectively. Person resident outside India is categorized as Non- Resident Indian (NRI) or a foreign national of Indian Origin (PIO) or a foreign national of non-Indian origin. In terms of the provisions of Section 6(5) of FEMA 1999, a person resident outside India can hold, own, transfer or invest in Indian currency, security or any immovable property situated in India if such currency, security or property was acquired, held or owned by such person when he was a resident in India or inherited from a person who was a resident in India.The regulations under Notification No FEMA 21/2000-RB dated May 3, 2000, as amended from time to time, permit a NRI or a PIO to acquire immovable property in India, other than agricultural land and plantation property or farm house

Formalities

Regarding the formalities which are required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India by its Notification No.FERA.152/93-RB dated 26th May 1993, Reserve Bank has granted general permission to foreign citizens of Indian origin, (whether resident inIndia or not), to acquire and dispose of immovable properties (other than agricultural land/farm house/plantation property) situate in India subject to the fulfillment of the following conditions.
  1. Property is acquired by way of purchase for the person’s bona fide residential use and transferred by way of sale.
  2. Consideration for the property purchased is met out of foreign exchange remitted from abroad through normal banking channels or funds withdrawn from the purchaser’s NRE/FCNR account maintained with a bank in India.
  3. Property purchased is not let out except where it is not immediately required for the purchaser’s own residential use.
  4. A declaration is submitted to Reserve Bank (Central Office) about such acquisition in form IPI-7 within a period of 90 days from such acquisition/final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
  5. Income accruing by way of rent or sale proceeds of the property or income arising out of investment of such proceeds is credited to the person’s NRO account (if the property is held by a non-resident foreign citizen of Indian origin) or to the Resident Rupee Account i.e. Q.A.22 Account (if the property is held by a foreign citizen of Indian origin resident in India) with a bank in India.
  6. In respect of residential properties purchased on or after 26th May 1993, Reserve Bank would consider applications for the repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property(only up to two such properties) provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later. Applications for the purpose should be made to Reserve Bank (Central Office) in form IPI 8 within 90 days of the sale of the property.

BIZ & LEGIS’s dedicated real estate legal service wing shall be happy to provide any answers to your questions pertaining to the investment regulations in India. Please feel free to ask us if you have any questions on acquisition and transfer of immovable property in India.

Change in land registration stamp duty in Kerala

Dear Investor,

This budget gives you a relief in stamp duty, in you land registration cost in Kerala. As you know the stamp duty for land registration in Kerala was as follows; If the land situated in “Panchayath Area” the stamp duty was 7%, in the Muncipal Area 8% and in the Corporation Area 9%. Hope you are aware of the fact the in addition to this there shall be a registration Fees payable to Government @ 2% irrespective of the locality.

Thanks to the Finance Minister. He has proposed to reduce the stamp duty for registration by 2%. Thus in the Panchayath locality it would be 5%, Muncipal Area it would be 6% and in the Corporation area it would be 7%. Indeed this is a great relief for the investors.

However, the registration Fees of 2% shall remain unchanged.

The Stamp Duty and the Registration Fees shall be calculated based on the Fair Value fixed by Kerala Government.

Biz & Legis, the corporate & Litigation law firm has a dedicated wing for Legal Due Diligence and Land Registration across the state of Kerala. If you have any questions upon the stamp duty and registration fees  for Land Registration in Kerala, Please do feel to contact us and we shall be happy to assist you to clear your questions and give any further services.

You can contact our real estate legal team for more info about change in land registration stamp duty in Kerala. Contact us on 9847182002.

Kerala conservation paddy wetland Act 2008

The Act was enacted in the year 2008 and it was formulated with the objective to conserve paddy land and wetland. It was also to restrict the conversion or reclamation of such land. Prior to this there was indiscriminate conversion of paddy land and wetland in the State.

Kerala conservation paddy wetland Act

Kerala conservation paddy wetland Act specifically prohibits the owner, occupier or the person in custody of any paddy land from any activity for conversion or reclamation of such paddy land and further provides that suitable incentives would be provided from time to time for paddy cultivation. To monitor the implementation of the Act local level committees would be formed. The monitoring committees would be at the following levels:

  1. Local Level Monitoring Committee
  2. District Level  Monitoring Committee
  3. State Level Monitoring Committee

The Act further prescribes measures for the protection of wetlands. From the date of commencement of the Act there is a complete prohibition on reclamation of wetland and of removal of sand there from. Authorized officers would be further appointed to inspect if any of the provisions of the Act have been violated.

The District Collector is further empowered by the Act to take measures and steps which it deems fit for the purpose of conservation of paddy lands and wet lands.

Local authorities shall further not grant license to any person who intends to carry out any construction activities on paddy land and if such a license is granted then the same would be in violation of the Act. The committees are further empowered to issue directions to the holder of the paddy land to start cultivation on such land if there has been no cultivation.

Any person who converts or reclaims any paddy land or wet land is liable to be punished by way of fine or imprisonment.

The Kerala conservation paddy wetland Act is a progressive step and is taken in order to prohibit conversion of paddy and wetland.

Land Utilization Order- 1967

Land Utilization Order

The Kerala Land Utilization Order was promulgated in the year 1958 and it was later amended in the year 1967. This Order was framed at a time when India was facing food grain deficits and then there were some restrictions on inter State movement of food grain. The Order vests district collectors with powers to enforce cultivation of food crops.

As per the Order if the government is satisfied that there is any need to increase the food production in any particular area, then by a gazette notification the District Collector can direct holders to land to cultivate their land with paddy or any other kind of crop particular kind of crop for a certain specific period of time. Such direction would further include the time period for which the lad holder has to carry out the cultivation. Such notice has to be delivered to the holder of the land. Even after such a notification if the holder of the land still not does start such cultivation then the District Collector is empowered to either auction off such land or the right to cultivate on such land for a certain period of time.

The Order further states that if the holder of the land was cultivating a particular kind of crop for a continuous period of three years then the same crop shall be cultivated on such land in the coming years and no attempts to grow or cultivate any other kind of crop shall be made by such holder of the land.

The Order further provides that after every sale or auction under this Order if the new purchaser fails to cultivate the land then District Collector is empowered to terminate the rights of the new purchaser. The District Collector can further take steps to arrange for cultivation of the land under some conditions.

If any party is aggrieved by any order of the District Collector then they have been granted the right to file an appeal before the Board of Revenue from any such order.

All orders issued under the Kerala Land Utilization Order have become inoperative after Kerala Conversion of Paddy and Wet Land Act, 2008 came into force.

Fair value Kerala land registration

What do you mean by Fair value of Land for the registration of Land in Kerala ?

This fixed land price notified by the government for a particular area or land is known as the “Fair Value of the Land.”

Value of land usually depends upon various factors. In order to avoid stamp duty (tax) during land sales, people used to do the registration of land by showing a much less amount than the original sale price in the Sale Deed. In which case, registrations were done without mentioning the actual sale consideration (sale price) in the Sale Deed. In doing so, the actual stamp duty to be paid on a land sale was considerably decreased putting the government to face the loss. In order to put an end to the practice of showing ‘lower price’ for land during registration, the government had fixed fair prices for lands in the state. By doing so, the registration of a particular land cannot be done by mentioning an amount that is less than the fixed fair price notified by the government in that particular area.

Immovable property in land laws of Kerala

What do you mean by Immovable property for the land laws in Kerala?

Mostly consist of land and houses or buildings that you own. It also includes hereditary allowances, rights to way, lights, ferries, fisheries or any other gain that arise out of the land, and things attached to the earth. Immovable property does not include trees, crops or grass.

Feel free to contact our real estate legal consultants in connection with clearing any doubts on Immovable property in land laws of Kerala. We provide online legal support and consultation and all other services connected to real estate law.