Irish property buys in India cancelled over stricter laws

July 27th, 2008 - 1:34 pm ICT by IANS  

London, July 27 (IANS) An overseas property agent has returned deposits of Irish buyers who invested in properties in India on the ground that tightened laws made it difficult for people of non-Indian origin to buy immovable properties there. The move by Ireland’s well-known international property dealer Larionovo was prompted by concerns over the ability of the buyers to repatriate funds.

India has attracted overseas property investors because of its rapidly expanding economy and the fact that prices are low by Western standards. Earlier this year, authorities in Goa moved to ban the sale of land to foreigners amid concerns about the amount of property being purchased by non-Indians. But it is not clear whether the properties concerned were in Goa or elsewhere.

Larionovo began marketing units in three schemes in India in the spring of last year. Two of the schemes, Green Hill and Green Valley, are located south of the business capital of Mumbai. The third, Cape Corinth, is in the holidayers’ paradise of Goa.

Prices ranged from 29,250 Euros (nearly $46,000) for a studio at Hill View to 52,000 Euros for a one-bedroom unit in Cape Corinth.

One investor who paid a deposit on a property at the end of last year said he received a letter from Larionovo stating that there were possible issues surrounding the repatriation of funds and that the company was examining the situation. Some weeks later, he was informed that the firm had decided to return his funds. He has now received all of the money due to him.

In a statement issued to The Sunday Business Post, Larionovo said that “due to the tightening of regulatory and governmental controls on foreign nationals of non-Indian origin (residents outside India) purchasing immovable property, Larionovo has decided that it would not be prudent for their clients to complete the purchase of their units in India”.

At this point, Larionovo approached the developer with its concerns and began negotiations to ensure that the client’s interests would be protected, the statement said.

“Larionovo has secured an agreement that the developer will take back all the units from the clients, refund all payments made by the clients to date, absorb any losses incurred as a result of currency fluctuations, and provide a return on the client’s investments.”

However, some other property companies are pressing ahead with sales of Indian properties to Irish investors.

Kieran Murphy, managing director of Kuvera India, which has sold a number of properties in the Rudrapur region in Uttarakhand to Irish investors, said he was satisfied there were no obstacles to buyers repatriating funds from the country.

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