Sunday, August 22, 2010

Buying Poperty Guide For Foreigners in Pakistan:Sale Property Guide:Commercial Property Guide:Property Tax Guide

Foreigners working and living in Pakistan can buy or rent properties; however, the Government requires them to complete certain legal formalities with the board of investment and the Trade Development Authority of Pakistan. Foreigners intending to rent to buy property also have to submit the following documents to the Home Department.
1) A letter of employment from the company in which they are working  at(e.g embassy/consulate/multinational) that mentions the nature of their residency, as well as the period of intended stay, along with the company's physical address in Pakistan.
2) A complete copy of foreigner's passport with a valid visa and six recent photographs.
Additionally, the following are also required by the Home Department.
3) The landlord/ property owner and the real estate agent are both required to submit a copy of their CNIC for record keeping.
4) The landlord/property owner is required to provide proof of ownership(e.g, certified copy of registered lease document of the property, a map, drawing and approval site plan) that has been attested by a Nottery public.
According to the current law , the property can only be occupied by the person, whose name is on the contract. If the occupant of the property changes, a new contract or deed should be drawn up, and the name of the new contract should be communicated to the respected Home Department within a day.
In case of violation of the procedures, the following actions can be taken by the Government:
1) Thorough scrutiny of the premises by the police.
2) Cancellation of visa and prosecution before the deportation of the foreigner.
3) The building's owner will not allow to rent or sell the property for next five years.
4) Investigation and prosecution of the real estate agency owner as well as the estate agent under the prevailing law.
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Sunday, August 15, 2010

Is Anyone Following Rent Laws In Pakistan?

Concluding a rental agreement is part of the routine for a real estate agent. Unfortunately, there are many agents who despite having several years of experience conduct these deals in a manner that not only leaves both landlords and tenants dissatisfied, but also violates local rental laws.
Most tenants would like rental agreement s to be made for at least 12 months although there is no law limiting the maximum number of years of an agreement. However, the law requires all rental agreements of 12 or more months to be registered with the Area Registrar and the fixation of revenue stamps on the rental agreement. These fees are paid by the tenant.
In order to save on stamp duty and registration fee, both the landlord and the tenant sign an agreement for 11 months. The reality is that most tenants do not move from the premises in such a short periods it involves expenses and payment such as brokerage/service charges to an estate agent, as well as the cost of packing and moving.
This means that the landlord, tenants and estate agents who brokers the deal, all are equally responsible for evading government taxes which is a criminal offense.
The estate agent should ideally inform both the landlord and the tenant that the rental agreement should be signed for the actual term of tenancy; this will save both parties from incurring unnecessary expenses after 11 months. More importantly, this will prevent both parties, from breaking the law, which, at the end of the day, results in financial losers for the provincial government.
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Thursday, August 5, 2010

How Tenants Can Safe Guard Their Investment: Some Helpful Points For Tenants To Safe Their Investment

In most cases, tenants lease properties that are in a moderately decent condition. Then there are those tenants who lease properties from landlords for properties that requires extensive renovation. Such properties are rented on an "as is and where is basis", with a tenant usually getting a long term lease ranging from five to 10 years and beyond. Tenants usually rent out such properties because they feel that the landlords will rent them the property at a considerably lower rate, due to state of the property.
After the tenants/lease agreement is signed, the tenants renovates the property at his/her own expense, which in some case runs into million of dollars.
All is well till the tenant and landlord meet near the expiry of the initial tenancy/Lease agreement. It is usually this time that landlords conveniently forget the condition in which the property was rented out and usually demand a higher rent then the prevailing market rate to the tenant who has already spent a lot of money in renovating the property in question.
The thinking from the landlord's point of view is that the tenant will rather pay the higher rent then forgo the millions investing in renovated the premises. The question at this point is: How can Tenants safeguard their investment?

Here Are Some Useful Tips For Tenants:

1) Take photographs and make the video of the property before singing the first term of tenancy.Lease Agreement, so that there is the proof of the condition in which the property was handed over to the tenant.
2) Always put an upper cap on the rent for the renewed term in the initial lease, so that in case of renewal of tenancy/lease agreement, the landlord cannot demand an exorbitant rent.
3) The pay off period of the cost of renovations must also be mentioned in the tenancy/lease agreement to ensure that the landlord asks for a fair rent when renewing the agreement for the second term.
When negotiating, landlord should realize that if the current tenant doesn't renew the agreement, and vacates the premises, it will extremely difficult for them to rent the same property to another tenant at a similar rate.