Assistance in Drafting of Sales Deed / Lease Agreements

What is a Sale Deed?

A Sale Deed is a legal document through which ownership of an immovable property is transferred from the Seller to the Buyer. It records the terms and conditions agreed between both parties in relation to the sale and transfer of the property.

While drafting the Sale Deed, the terms, conditions, and wording can be mutually discussed, negotiated and finalized by both the Seller and Buyer.  Once the Sale Deed is executed and registered, it becomes legally binding document for transfer of title of the respective immovable property.

Therefore, preparing a clear and well-structured Sale Deed is important to safeguard the rights and interests of both the Seller and Buyer involved in the property transaction.

Whether RBI Reporting is required for purchase of property in India by NRI?

Reserve Bank of India (RBI) has given a general permission to NRIs to buy any residential or commercial property in India. They are neither required to seek any specific permission from the AD bank nor required to send any communication or intimation about the transaction to the RBI.

NRI can buy any number of residential or commercial properties in India. In case, an NRI is unable to come to India, the documents pertaining to the purchase can be executed by any person, who is given a valid Special Power of Attorney to act on behalf of and represent NRI in documentation.

NRI cannot buy any agricultural land, plantation property or farm house in India. Hence, if a NRI wants to purchase a farmhouse, plantation property or farm house in India, he/ she will have to approach the RBI for a specific permission and the RBI will consider this on a case-to-case basis prior to granting of approval.

NRIs can make payment for acquisition of Immovable Property (Other than agricultural land/ plantation property / farm house) out of the funds received in India through normal banking channels by way of Inward Remittance from overseas or by debit to his NRE / FCNR (B) / NRO Account.

Repatriation of Sale Proceeds

For repatriation of Sale proceeds from non-agricultural property, the following conditions should be met in case the property is purchased through inward remittances or Foreign Currency.

1. The property was acquired in compliance with FEMA as applicable at the time of purchase.
2. The amount of repatriation cannot exceed:
   • The amount paid for the purchase of property in Foreign Currency received through normal banking channels
   • The amount paid for the purchase of property in Foreign Currency out of funds held in Foreign Currency Non-Resident Account FCNR
   • The equivalent of foreign currency held in NRE (Non Resident External) accounts as on date of payment, of the amount paid. Provided the payment for the purchase of the property was made from NRE account.
3. Repatriation of Sale proceeds of more than 2 residential properties is not allowed.

What is a Lease Agreement?

A Lease Agreement is a legal document which outlines the terms and conditions between the property owner, also known as the landlord or lessor, and the lessee or tenant for a commercial and/or residential property.

While preparing the Lease Agreement, the language and terms are negotiable by both the parties until it is signed, after which this Lease Agreement becomes a legally binding document on both the parties. Accordingly, creating a comprehensive and effective lease agreement is very important as it protects all parties involved throughout the lease term.

Lease Agreement End Dates

Leases generally have two possible end dates — either fixed term or automatic renewal. Fixed-term end dates provide a specific time frame in which the lease is active. At the end of the lease, both parties must agree to renew and either include an addendum to the lease extending its duration or prepare a new lease agreement. An automatic renewal continues indefinitely unless either the lessor or the lessee provides notice dissolving the lease.