Family feud

areas which may have been around the AUD$300,000-$400,000 mark 20 years ago, are now valued at over AUD$10 million. This kind of spectacular growth is largely spread across various cities in India.

Over the next decade, Indians in Australia could find themselves involved in litigation with family members in India over assets which have increased sharply in value in the past 1015 years. One such obvious asset is property.

In 2012, residential property prices in New Delhi rose by 17 % according to the National Housing Bank (NHB). In Mumbai, house prices rose by 8% while Pune registered India’s highest annual house price increase of 33%. Chennai and Jaipur also recorded strong house price increases of 24% and 21%.

These price increases are just the tip of the iceberg as real estate values are known to have two values - the stated value on transactions and the actual value, often the difference of which is financed by cash at time of purchase. Over the past 10 years as the Indian middle class has emerged, property in India has increased substantially in value. For example, properties in South Delhi’s influential

Indian migrants who arrived here in the last 10-20 years, were searching for a better lifestyle - both personal and economic. With limited resources, they settled down and over the years have worked hard to establish themselves. Meanwhile, their parents and other siblings in India have continued on with their lifestyles in India. The annual holidays for the Indian migrant to India are a mixture of family gatherings, shopping and talking about both the economic growth and political situation in India. Often the great unsaid is the value of the family and ancestral property, especially as the parents still live in them.

What can be a potential challenge is the settlement of the property as and when the elders move on. Whereas once upon a time, when the underlying value was in the low hundreds of thousands of dollars, it may have been easier to resolve these issues. But now when the inheritance can be in millions of dollars, it can give rise to family discord.

Family members left behind in India can feel that they have full right to these assets, especially if it is a joint family asset with people still living there and in some cases, running family businesses from these properties. Those living in Australia may like to access their part of the entitlement and invest it as they deem fit for themselves and their future generations.

A potential sale of property in Mumbai in the Bandra region or in Defence Colony in Delhi can add up to $10 million to the family coffers. This lump sum, even if split two ways between siblings, will allow for a high level of family security to the sibling in Australia or overseas.

While there is no easy solution to this, it is often advisable to discuss these issues rather than to have them as an elephant in the room at later family gatherings when things are not so pleasant. The tyranny of distance between India and Australia and the horrendous Indian legal system can make these conflicts very difficult to resolve when there is limited guidance from the elders, and unsolved property matters can lead to long-term conflicts within the same family.

Family feuds are never pleasant: pathways must be found to defuse this situation before it comes to a head.