Question 1

Is fractional real estate investment legal in India?

Accepted Answer

Yes. Fractional real estate investment is legal in India under two frameworks: the SEBI SM REIT framework (exchange-listed, governed by SEBI REIT Regulations 2014, amended 2023) and the Trust/SPV model (governed by the Indian Trusts Act, 1882). Both are lawful investment structures. The legality of a specific investment depends on whether the platform uses a properly structured legal vehicle and complies with applicable laws.

Question 2

Does SEBI regulate all fractional real estate platforms in India?

Accepted Answer

No. SEBI regulates platforms that register as SM REIT Investment Managers and list their scheme units on stock exchanges. Trust/SPV platforms operating under the Indian Trusts Act, 1882 are not SEBI-regulated under the SM REIT framework. However, they are governed by the Indian Trusts Act, 1882, PMLA, 2002, and other applicable laws.

Question 3

What law governs Trust/SPV fractional real estate platforms?

Accepted Answer

Trust/SPV fractional platforms operate under the Indian Trusts Act, 1882. Additionally, they must comply with PMLA, 2002 for KYC and AML requirements, and the Income Tax Act, 1961 for tax deductions at source. For platforms using blockchain-based investor certificates, the Indian Evidence Act, 1872, Section 65B also applies.

Question 4

What documentation proves a fractional investment is legal?

Accepted Answer

For Trust/SPV investments: a registered Trust Deed confirming the Trust's existence and the Trustee's fiduciary role, plus an SPV NFT certificate recording the investor's profit rights. For SM REIT investments: the SEBI registration confirmation and the scheme offer document. KYC completion certificates confirm PMLA, 2002 compliance.

Question 5

Is Landbitt's fractional investment structure legal in India?

Accepted Answer

Yes. Landbitt structures investments through registered Trusts under the Indian Trusts Act, 1882 with independent Trustees holding registered title to each asset. The platform conducts PMLA-compliant KYC and issues SPV NFT certificates structured to comply with Indian Evidence Act, 1872, Section 65B. The investment structure is legally constituted under applicable Indian laws.

Aakash Gupta

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