Is a relative mismanaging your India property?

Free management is the most expensive kind. The cousin who has run your flat for six years is not stealing from you. He is doing it the way an unpaid person with a day job does it, and the bill has been accruing in a currency you cannot see.

Almost every owner reading this arrived at the same arrangement in the same way. You left India. Somebody had to hold the keys. A brother, an uncle, a school friend, and the word "manager" was never used because using it would have been insulting. There is no contract, no fee, no reporting, and for the first two years that was fine.

This guide is about the years after that. It does not assume your relative is dishonest. Most are not. It gives you the signals that separate a slow arrangement from a bad one, tells you what you are owed in law, and sets out an exit that leaves you both able to sit at the same table in December.

Why the arrangement held, and then stopped

An informal arrangement runs on goodwill and goodwill has no reporting layer. It works while the flat is empty and nothing happens. It strains the day a tenant moves in, because now there is money, and money between family without paper is where the friction lives.

Nobody set out to mislead you. What happened is that the job grew: a leaking bathroom, a society notice, a tenant who paid late twice, a broker who wanted a month's rent. Each of those needed a decision, and none of them were worth a call to Dubai at 11pm. So decisions were taken without you, and once a few have been taken without you it becomes awkward to start reporting. Silence compounds.

The signals, from mildest to worst

None of these is proof on its own. Two or three together describe an arrangement that has stopped working.

Rent arrives late and round. Not 47,500 on the fourth, but 45,000 whenever. Rounded figures mean somebody is netting expenses in their head instead of on paper.

You have never seen the tenancy agreement. You do not know the tenant's name, the rent stated in the document, the deposit held, or the end date. This is the one that costs the most later, because the deposit is your liability and you cannot quantify it.

No receipts, ever. Repairs are reported as amounts, not as bills. The plumber's 800 rupees becomes a 2,500 rupee line in a WhatsApp message and there is nothing to check it against.

Nobody else is allowed in. You suggest sending a friend or a service to inspect, and the suggestion produces heat rather than a date. A person with clean books welcomes a second pair of eyes. Read the temperature of that reply, not the words.

Society dues or property tax are in arrears. You find out from a notice, not from your relative. Arrears mean the money you sent is going somewhere else, or was never enough and nobody told you.

The tenant comes to you. A tenant who finds your number and uses it has already tried the person in front of them.

Names on the record start moving. A khata or mutation application you did not authorise, or a bill that now arrives in someone else's name, is a different category of problem. Verify the record and read POA misuse and the clauses that stop it the same day.

The two questions that sort slow from dishonest

Ask both in writing, in one message, without heat.

The first: can you send me the tenancy agreement and the last twelve months of rent credits as they appear in the bank. The second: I want to appoint someone to inspect the flat next month, can you hand them the keys for two hours.

A person who is slow sends the agreement in a week and apologises for the delay. A person who is overwhelmed says he never got a copy from the broker and offers to chase it. A person with something to hide argues about the question. The reply to those two lines tells you which conversation you are in, and it costs you nothing to ask.

What your relative owes you in law

The family framing hides the legal one. A person managing your property on your behalf is your agent, whether or not anyone signed anything and whether or not they are paid.

Section 211 of the Indian Contract Act, 1872 requires an agent to conduct the business of the principal according to the principal's directions. Section 213 is the one to know: an agent is bound to render proper accounts to the principal on demand. You do not need a contract to ask for accounts. You need to have asked.

Two more consequences follow, and owners miss both.

The rent is your income. It is taxable in your hands even where a relative collects and keeps it in his own account, and the mechanics of that sit in rental income tax for NRIs. Where money has been moving through a relative's account for years, take the position to a chartered accountant before you take it anywhere else.

Permission protects you on possession. A relative living in the flat with your consent is a permissive occupant, and permissive possession never ripens into ownership. An arrangement with nothing on paper is where that protection gets argued about. Put the permission in writing now, dated, even if you change nothing else.

The exit that does not detonate the family

The move is not an accusation. It is a change of structure, and structure is easier to argue with than a person.

1/ Change the recipient, not the person. Rent goes to your NRO account from the tenant, from this month. Frame it as a tax and compliance requirement, because it is one. 2/ Put the tenancy on paper in your name. A registered leave and licence agreement naming you as the licensor, the deposit stated, the term stated. Your relative can still be the local contact on it. 3/ Hire the boring part out. Inspection, rent follow-up, bill payment and receipts go to a paid service. This is the step that takes the burden off your relative rather than the trust, and it is the sentence to use. 4/ Ask for a handover, not an audit. Keys, the agreement, the deposit, the last bills, the society contact. Ask for what you need going forward. Do not open the ledger of the last six years unless you intend to litigate it, and litigating it against family costs more than the flat earns. 5/ Thank the person in public and in writing. Six years of unpaid work happened. Say so to the family before anyone else frames the change.

Where the arrangement has already broken past repair, the comparison between a relative and a paid manager, cost by cost, is in property manager versus relative managing your India flat. Before you hand the keys to anyone new, run them through the questions in how to verify a property manager in India.

FAQ

Is a relative managing my property in India legally accountable to me? Yes. A person managing property on your behalf is your agent under the Indian Contract Act, 1872, whether or not they are paid and whether or not anything was signed. Section 211 requires the agent to follow the principal's directions and Section 213 requires the agent to render proper accounts to the principal on demand. A written demand for accounts is the first step in any dispute.

How do I know if a family member is mishandling my flat in India? Watch for rent that arrives late and in rounded amounts, a tenancy agreement you have never seen, repairs reported as figures with no receipts, arrears on society dues or property tax that reach you as a notice, and resistance when you propose that someone else inspect the flat. Two or three of these together describe an arrangement that has stopped working.

Can a relative living in my India property claim ownership of it? Not while the occupation is permissive. Under Article 65 of the Limitation Act, 1963, only possession that is hostile, open, continuous and exclusive for twelve years can ripen into title, and possession held with the owner's permission is never hostile. The risk sits in informal arrangements with nothing on paper, so record the permission in writing and date it.

How do I take back control of my India property from a family member? Change the structure rather than accusing the person. Redirect rent from the tenant to your NRO account, put the tenancy on paper in your name, hand inspection and bill payment to a paid service, and ask for a forward handover of keys, agreement, deposit and bills rather than an audit of past years. Say in writing that the change removes an unpaid burden.

Do I owe tax on rent my relative collected and kept in India? Rental income from a property you own in India is taxable in your hands, and money reaching a relative's account instead of yours does not change who owns the income. Where rent has been collected this way over several years, take the exact position to a chartered accountant before filing, because the correction may involve past returns as well as the current one.

A way out that does not go through a dinner table

66 MG Road takes over the part of this that nobody in a family should be doing for free: the inspection visit, the rent follow-up, the society office, the bills, the receipts. Rent lands in your NRO account from the tenant. Every expense arrives as a line item with the bill attached. Your relative keeps the relationship and loses the unpaid job, which is the version most families are relieved to arrive at. We have people on the ground in Bangalore and Hyderabad, and work through broker partners in Mumbai, Pune, Chennai and Gurgaon.

This is general information, not tax or legal advice. Confirm your own position with a qualified adviser.

Saurabh Garg, founder, 66 MG Road

Sources

• Section 213, The Indian Contract Act, 1872 ("An agent is bound to render proper accounts to his principal on demand"), Indian Kanoon: https://indiankanoon.org/doc/1464461/
• Section 211, The Indian Contract Act, 1872 (agent's duty in conducting the principal's business), Indian Kanoon: https://indiankanoon.org/doc/768660/
• The Limitation Act, 1963 (Article 65, twelve-year period for possession of immovable property), Bhatt & Joshi Associates: https://bhattandjoshiassociates.com/what-is-the-period-of-limitation-for-a-suit-for-possession-of-immovable-property/