For a piece of Paradise

UK balm for Britons caught in bad realty deals in Goa
Preetu Nair, Times of India, Goa.

August 24, 2008

PANAJI: Alarmed by the increasing incidents of Britishers being duped by unscrupulous estate agents and developers, the UK government is trying to help its citizens by providing them a list of local lawyers who they could employ.

“Although we cannot get involved in individual legal disputes, we can assist British citizens in troubled deals by furnishing them with a list of independent local lawyers,” said a spokesperson of the British High Commission, Mumbai. The Foreign and Commonwealth Office has already issued an advisory to British citizens to “make careful enquiries before buying property in Goa”.

Many Britishers are waking up to the fact that the lease agreements they had entered into in the hope of owning a home in Goa does not give them ownership rights. A 60-year-old, who requested that his name be withheld, said he entered into a lease agreement with a Goan builder’s agent in Eton to purchase a villa in Cavelossim on May 31, 2006. “We were told that entering into a lease agreement would be our means to owning a ‘registered’ home in Goa once we stay for 182 days in India. We paid the Rs 15 lakh they asked for and the builder promised to transfer the property to our name within the lease period of 32 months,” said his wife.

According to the Foreign Exchange Management Act, 2000 a person gets residential status once he completes 182 days in the country. Two years down the line, the couple have realised that they may never be able to own the house they “purchased” as they have failed to validate their property rights. “Property prices have skyrocketed in Goa and the builder is refusing to do a sale deed now, stating that the law doesn’t permit it,” the Briton said. “The builder is willing to give us a refund but only after deduction of costs. When we refused, he threatened that if we try to fight we may not get anything once the lease is over,” his wife added.

Builders deny duping foreigners
PANAJI: It is not only Britishers, but also Germans, Russians and Italians who are finding themselves in a soup being duped by unscrupulous estate agents and developers. “Local builders as well as those with offices in the UK have consistently been assuring buyers directly and through professionals that everything is in order and there is no legal hurdle in purchasing property in India. With such strong assurances, often a buyer is led to parting with all his hard earned money,” said advocate Vikram Varma, who is dealing with several such complaints.

Take the case of Barbara, a woman from Brimingham, who entered into a lease agreement with a builder. She had several meetings with an UKbased estate agent who markets Goan homes. She also consulted an advocate before entering into a construction-cum-lease agreement in August 2005 for a villa in Sernabatim. She was promised that once the building was ready, the property would be transferred or handed over to her. But now after three years, she is yet to get the property transferred in her name.

“The agent who persuaded us to invest in Goa has shut shop and our lawyer has expressed helplessness. We just don’t know where to go and what to do,” lamented Barbara. “The crime of these foreigners is that they trusted the people who assured them of the legal position of their purchase,” said Varma.

However, assistant solicitor general Carlos Ferreira believes the foreigners are also to blame. “An agreement for lease is essentially an agreement to enjoy a property for a fixed period of time, subject to the terms and conditions. Lease can never be understood to mean an agreement to sell or a right to acquire a property,” he said.

If a lease agreement had been executed to camouflage the real intention of acquisition of property, the law can’t protect such unscrupulous people, unless there is a clause binding on the builder to sell the property to the foreigner, he said. But this can only be done if there is no other impediment in any other law, he added.

The problem of builders reneging on their agreements aggravated recently after the Goa government decided to amend the laws governing registration of property so that foreigners could not easily acquire real estate in the state. Builders deny any wrongdoing on their part. The lack of clarity on the law is preventing them from executing sale deeds in the last few months, they claim. Datta Naik, president of the Confederation of Real Estate Developers Association of India, Goa, said, “Earlier we used to lease out a property to a foreigner for a period of less than 60 months during which he would either establish a proof of business or finish more than 182 days in the country. After that we would execute the sale deed.”

But now, he says, there is no clear instruction from the government.
“We had written to the state government about the legal status of such sale deeds but got conflicting signals from the administration. Because of this we have not been executing any sale deed with foreigners for the last one year. We don’t want to land up on the wrong side of the law,” he said. [Coutesy: Times of India, Goa]