Buying A NA Plot

Buying a piece of NA land might seem like a simple transaction involving the exchange of money and property between a buyer and a seller. However, the actual scenario is somewhat unclear. Factors such as corruption, the involvement of multiple buyers, and individuals selling misrepresented land with fake documents all contribute to the complexity of the decision-making process. Acquiring a plot in India can be a intricate undertaking, necessitating thorough research to guarantee a secure investment.

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What is an NA Plot?

An NA plot, also known as a non-agricultural plot, is classified as unsuitable for agricultural activities. NA plots can be used for various purposes, including the construction of houses, apartments, shopping malls, office buildings, and factories. However, it is essential for the land to have a legal designation as non-agricultural to undertake any construction or development activities.

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What are the non-agricultural uses of land?

Certainly, land can be utilized for various non-agricultural purposes. Here are some standard categories of non-agricultural land use:

1. Residential: Land dedicated to housing developments, including single-family homes, apartments, and other residential structures.
2. Recreation: Areas designated for recreational activities such as parks, playgrounds, sports fields, and other leisure spaces.
3. Transportation: Land used for transportation infrastructure, such as roads, highways, airports, and railway tracks.
4. Commercial: Land zoned for commercial activities, including businesses, offices, retail stores, and shopping centers.

These categories represent common non-agricultural uses of land, each serving a specific function in urban and rural development.

Certainly, if the land is officially certified as barren and unsuitable for cultivation, it can then be utilized for non-agricultural purposes. In Maharashtra, for example, obtaining an NA (Non-Agricultural) certificate under Section 44 of the Maharashtra Land Revenue Code 1966 is a prerequisite before initiating any construction on the land.

Non-agricultural land, with the appropriate certification, can be employed for various purposes, including the construction of residential properties. Depending on the specific location and size of the plot, one can build bungalows or apartment complexes on an NA plot in Maharashtra. This certification ensures that the land is legally recognized as non-agricultural, allowing for diverse developmental activities beyond agriculture.

NA plots have the potential for a variety of uses, including recreational purposes like gyms, landscaped parks, and sports grounds. Additionally, depending on the location, NA plots can be employed for commercial ventures such as shopping malls, manufacturing units, and warehouses.

Furthermore, governments frequently utilize NA plots for infrastructure development, specifically for constructing roads and rail tracks. This strategic use aims to enhance the overall transport infrastructure of the area, contributing to improved connectivity and accessibility.

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What are the advantages of an NA Plot?

Great Investment Option:

Investing in an NA plot proves to be a highly attractive option, given the potential appreciation of land value over time due to the continuous growth in demand and limited availability. Additionally, obtaining a loan against property is a viable option, with leading financial institutions offering this facility for the purchase of NA plots.

Construct Whenever You Wish:

Choosing an NA plot stands as an excellent choice for individuals who prioritize an independent home over an apartment. This option allows them to construct a home at their own pace and according to their personal preferences.

Ideal for Commercial Purposes:

In the event that an NA plot is located strategically, considering the establishment of a personal business unit or factory could be a viable option, provided all necessary approvals for setting up a manufacturing unit are in place. If the NA plot is in proximity to a hospital or a railway station, developing transit flats on the land emerges as a lucrative business option. Alternatively, one might opt to construct a marriage or banquet hall on the NA plot, providing a potential source of income for the landlord.

No Maintenance Costs:

Maintenance expenses are inevitable for any residential property, encompassing upkeep, repairs, cleaning, taxes, electricity bills, and more. However, in the context of a non-agricultural plot, the maintenance cost remains at zero as it is an empty plot until construction commences.

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Things To Consider Before Buying A NA Plot:

Investing in land has consistently been an attractive choice for Indians, considering it a valuable asset bound to appreciate. Before the implementation of the Real Estate (Regulation & Development) Act 2016, there were ambiguities in land transactions. The enactment of this Act has brought significant transparency to the process. Nevertheless, caution is advised when purchasing an NA plot.

Some of the things one needs to consider before buying an NA plot include:

1.    Location:

Investing in land is aimed at securing maximum appreciation in value over time. Therefore, the selection of a plot is significantly influenced by its location. A plot with the following locational advantages holds the potential for substantial returns:

• Presence of established social infrastructure in the surrounding area, such as proximity to hospitals or tourist destinations, provides an additional advantage.
• A positive historical record of economic growth in the specific location is an encouraging factor.
• Close proximity to commercial hubs or areas with prominent IT clusters can be advantageous.
• Convenient connectivity through various modes of transportation and accessibility to the location is a favorable attribute.

2.    Documents:

• NA Order – NA Order holds utmost significance, and it is imperative to verify that the land under consideration has obtained certification as non-agricultural. Failure to secure this certification may render any construction on the plot illegal.
• Title Deed – Title Deed is crucial, and before purchasing the land, it is essential to confirm that the seller has the legal right to sell the plot. A thorough examination of the land’s title deed is necessary to determine the seller’s rights. Seeking professional assistance to scrutinize the documents is advisable.
• Encumbrance Certificate – An Encumbrance Certificate is vital, as it validates that the land in question is free from any legal complications. To verify this, one can obtain the certificate from the sub-registrar’s office for examination.
• Land Deed – The buyer should prioritize obtaining the Land Deed before progressing with the transaction. It is crucial for the seller to furnish the original land deed, encompassing the details of the present landlord and all previous owners, for scrutiny by the buyer.
• Release Certificate – A Release Certificate is a crucial document that should be thoroughly examined before purchasing the land. This certificate guarantees that the current landowner has settled all outstanding dues with the bank.

In addition to the mentioned documents, it is essential to gather copies of all tax receipts and bills related to the land to ensure transparency in the transaction.

3.    Site Visit:

Prior to investing in a land plot, it is crucial to personally visit the site. During the on-site visit, you can measure the plot and determine the floor space index of the location. Seeking assistance from a professional surveyor can be beneficial in this regard.

4.    Reputation of the Seller:

Beyond the aforementioned documents, the credibility of the individual selling the land is a vital consideration. It is advisable to engage with individuals possessing a strong reputation, as it increases the likelihood of the title deed and other related documents being in proper order.

5. The Measurements:

Engage a reputable surveyor to measure the land. Verify that the seller accurately states details such as area, dimensions, and other pertinent information.

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Property registration process

The property registration process is governed by the 1908 Indian Registration Act, which mandates the registration of properties. This legal procedure for recording property transfers ensures the legitimate transfer of ownership and property rights from a legal standpoint.

Read our Land Buyer’s Guide on Property Registration Process in Pune Maharashtra

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Plotted developments gain traction in cities

Plotted developments are experiencing significant popularity in urban areas. Real estate consumers are drawn to these developments due to the multitude of facilities they provide.

In contemporary times, plots are being developed within gated societies as an alternative to high-rise apartments or independent floors, ensuring privacy and 24-hour security. To enhance user convenience and elevate the overall livability, plotted developments are strategically planned with a variety of amenities such as a gymnasium, meditation area, kids’ play zone, reflexology garden, and more.

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RERA has bolstered trust and credibility in real estate transactions

Certainly, it can be asserted that investing in plots has the potential to be a challenging or complex process. However, the introduction of the Real Estate (Regulation and Development) Act 2016, commonly known as RERA, has significantly enhanced the credibility of plot dealings and transactions.

Numerous real estate experts emphasize the documentation procedure as a pivotal step in plot investments.

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What if I Am an NRI?

For Non-Resident Indians, acquiring land in India often transcends a mere financial investment. Many Indians venture abroad to advance their careers, which can occasionally lead to feelings of homesickness and a desire to maintain a connection with their roots.

Here is a checklist for Non-Resident Indians looking to buy a plot in India:

1. Purpose: Clearly define the purpose of your purchase.
2. Transactions: Ensure that all transactions are conducted in Indian currency.
3. Power of Attorney: Consider assigning Power of Attorney (POA) to a relative or friend residing in India to facilitate legal processes.
4. Taxation: Be aware that if the property’s value exceeds INR 50 lakhs, a 1% tax must be paid by the buyer, applicable only for the initial purchase.

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Different types of Plots:

When considering investments in plots, investors can explore various types based on their specific needs and objectives. The most common types include residential, commercial, agricultural, institutional, and industrial plots.

1. Agricultural Land:
   • Designated for agricultural and related activities.
   • Rules for purchasing agricultural land vary by state, with some states imposing restrictions.
   • In certain states, restrictions may be in place, preventing individuals from outside the state from buying agricultural land.
   • Agricultural plots are often larger in size, and land ceilings are determined by state norms.
2. Residential Plots:
   • Intended for house construction.
   • Approval from relevant authorities is required to change the land use from agricultural to residential.
   • Investors can also purchase residential plots, and loans secured by such plots may be eligible for Section 80C relief.
3. Commercial Plots:
   • Designated in a city’s master plan for offices, shops, and other trade establishments.
   • Typically, subject to higher government fees and taxes.
   • Some commercial properties may involve shared ownership models.
   • It is crucial to ensure that the land is zoned for commercial use before development.
4. Institutional Plots:
   • Reserved for specific purposes such as educational institutions or organizational headquarters.
   • Authorized by local government authorities, and sale or transfer follows established rules.
5. Industrial Plots:
   • Developed by government authorities to promote industrial corridors in a region.
   • Intended for purposes like warehousing, factories, and cold storage facilities.
   • Special permissions may be required due to potential environmental impacts.
   • Industry-specific bodies often require approval for setting up an industrial unit.
   • Consideration of approach roads is crucial, especially due to expected heavy vehicle traffic.

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Conclusion:

Investing in an NA plot stands as a prudent financial decision, given the consistent appreciation of land value over time. Renowned financial institutions, such as Tata Capital, provide attractive terms and straightforward documentation for loans against property. Opting for financing also facilitates a thorough verification of all documents in advance, as the financier conducts due diligence to ensure there are no disputes.