Tips For Tenants With An NRI Landlord

Money matters could be very tricky. Take, for example, the case of G Kiran who wrote to us asking, “I am shifting to a rented flat soon. The landlord is an NRI (non-resident Indian) but his brother says he would be taking the rent on behalf of his NRI brother since he doesn't have a bank account in India. Is that legal?”

To those who are in the same plight as Kiran, here is what you should know.

If your landlord's brother has a power of attorney (POA) and it clearly mentions his rights, he can legally ask you for the rent. This POA will determine whether or not he has the 'right to lease' on his brother's behalf. He can carry out all the functions that have been legally sanctioned. But, do note that the 'right to lease' shouldn't be confused with the 'right to sell'. In short, no additional rights can be construed than those clearly mentioned in the POA.

For the purpose of leasing, representatives are usually conferred with a special POW. This means their role is restricted to only one purpose. In this way, it has an edge over a General Power of Attorney (GPOA). While framing such a POA, one needs to be specific and clear about the nature of the representative's role. Individual aspects of the transaction should be documented so that it isn't open for interpretation. Details about receipt of rental value, initial deposit, and any such liquid assets should be mentioned clearly along with other documentation at the Sub-Registrar's Office.

Also read: Explaining NRI Investments In India's Real Estate

Often it so happens that people staying away from their property could make a seemingly reliable person the legal representative. This representative may or may not have varied interests and, therefore, it could be a problem. If you do feel that there is something amiss, you have options to choose from ― approach state safety and welfare offices or get in touch with the state's attorney general. You could also consult your own lawyer.

If you are a tenant like Kiran, these are some tips for you:

• Check the POA document and do not go for what the representative tells you about his rights. The document usually contains details about the reason for execution of the POA.

• Tally the identity of the representative with that mentioned in the POA.

• Check whether the representative has the right to lease the whole or just a part of the house/land.

• Find out if the representative can receive rents, income, profits, security deposit from you in part or whole.

• Find out if he is authorised to take decisions on repairing, maintenance, paying, settling, adjusting and deducting.

• Make sure the representative has fulfilled his duties at the Sub-Registrar's Office on payment of stamp duty, registration charges, etc. 

• It is good to keep everything easy by occasionally speaking to your NRI landlord over the phone, over the mail to clear any doubts from time to time.

• Some tenants may eventually find the house good for a purchase. Can you buy it through the representative? No. The Supreme Court has ruled that transfer through GPOA cannot give ownership title to the buyer. You can only buy from the principal or the real owner.

Also Read: SC Ruling On POA To Change Indian Realty For Good