Buying Agricultural Plots in India: for Nre’s

If you are a foreign national, you cannot buy agricultural land in India, under such circumstances:

1. You can either buy over 100 acres of land
2. If your parents have agricultural land in India you can get a certificate from your ancestral village elevating your status to that of a farmer

Please investigate the category of land that you wish to buy

If the land is privately owned, then it can be owned and sold freely. but if the land is government land given to poor farmers, then it can be passed onto their children but cannot be sold.
 
Before you buy the land you will have to go to the village talaati ( who is the lowest level of government official) in the registrars office, he is also a land recorder. The Talaati with check the title of land called the 7/12 , based on the survey no of the land. Please check the availability of the land or whether this land has already been blocked for another individual.

The process of buying agricultural land

1)      The Sarpanch (village head)or a common person who can get the villagers together, he will give the villagers a token amount of money and gain Power of Attorney  over the land. Please make sure this person is trustworthy as he can delay the sale of land until the time span for buying the land is over and you lose your token money or he can give the villagers an amount that is equal to the cost of land while charging you an exorbitant amount and pocketing the difference.
 
2)      You enter into an agreement with the true owners, called the “Memorandum of Understanding” which should be drawn in your favour by your lawyer and should contain the following details :
i)     Cost of land
ii)   The advance amount given in order to block the land,

iii) The time span within which the deal  has to take place,

iv) The compensation to be given in case of default and the processes  to be covered in case of losses.

After the Memorandum of Understanding is signed between you and the Sarpanch. You have to give him a token amount of money, which should be 10 percent of the actual amount negotiated for purchasing the land. This will the block the land in your favour. When you give the deposit you may lose the deposit, if the deal does not get through but it is better than losing a huge amount if you are cheated.

3)  You have to obtain the original property papers for the verification of the land. Please do not accept copies as it could be pledged land and the farmer may have taken a loan on the property and given the title deed papers to the bank.
 
4)      When the original property papers are given to you, issue a Public Notice in the newspapers to make sure that the title deed is clear. Remember that the original deed has to be in yellow paper and with colourful rupee notes on the stamp duty paper.

a.  Your lawyer will do a title search for up to 3 generations on the ownership of the land.
b.  Obtain the encumbrance certificate which will ascertain that there is no legal dispute on the and .
 
5) When it is confirmed that the title to the land is clear, the villagers will be gathered at the registrars office, where in front of the registrar the villagers will have to sign on the registration papers, give their thumbprints and get their photo taken
 
6) When you are at the registrars office please make sure that you take the original deed of the property ,the previous deed for the property and the property tax receipts with you Two witnesses will also be required for registering the property.

Please carry your PAN card, Form no 16 and driving license. You will also have to carry money for the stamp duty fees, registration fees and lawyers fees.
  
Please Note: When buying land through brokers ensure that they are established and well reputed. Always ask for their registration number. Also their fee shouldn’t exceed more than one per cent of the cost of the land.

In spite of all these precautions

Please carry out your own investigation and confirm the actual rate of the land and ownership of the land, as you may get cheated. One way of confirming the rate and ownership of land is to approach the locals in the vicinity of the land. 

Please make sure a thorough background check is done.