Investment News

11 Legal Documents That You Should Check Before Buying Any Property

11 Legal Documents That You Should Check Before Buying Any Property

September 19, 2018 in Defination, Investment News, Real Estate News

Property buying can often be messy. Jargons float around and you can be confused with all the legalese. We made it simple for you. Use this handy guide to help you navigate the real estate pitfalls you may encounter while buying a home. While purchasing property, it is essential to check that the following documents are in order:

  • Agreement to sell – It is the first document prepared in anticipation of a sale of the property. It contains a detailed description of the property and states the terms of conditions between the buyer and the seller, including the purchase price as agreed upon.
  • Absolute sale deed and title deed - The sale deed or title deed is the most important document that records the actual transfer of ownership of the property. It needs to be registered at the sub registrar’s office under whose jurisdiction the property would fall.
  • Title search and report – Property title search is a process of retrieving the chain of documents relating to the history of the property that has been registered with the concerned authority. It includes a description of the property and names of title holders, joint tenancy, etc. It is especially important for procuring a home loan.
  • Khata certificate – This document is known by different names in different states and it provides proof that the property has an entry in the local municipal records.
  • Receipt of property tax – The receipts of property tax hold that the previous owner or occupier had paid all the taxes and none have been left as due. They also establish the legal status of the property and therefore serve as an important document of evidence.
  • Encumbrance certificate – An encumbrance certificate states that the property is free from all encumbrances or loans. It is a key document for procuring a loan against property from banks. It has all the details about transactions relating to the property.
  • Occupancy certificate – An occupancy certificate or completion certificate is given by the municipal corporation after the construction of a building to establish that it was constructed according to a sanctioned plan and that it is ready to be occupied.
  • Statement from a bank if loan outstanding – If any loan is outstanding on the property that is being purchased, it is safe to procure the statements relating to the loan so that there is full disclosure in that regard.
  • Non-objection certificates – It is important to ask the developer to produce copies of various NOCs that must be procured from various departments such as the Sewage Board, Pollution Board, Environment Department, Traffic and Coordination Department, etc. This forms the ‘intimation of disapproval’ for the construction of the building.
  • Sanctioned building plan by statutory authority – This is to ensure that the buyers are cautious about any deviations from the sanctioned plan made by the developer.
  • Power of Attorney/s, if any – A Power of Attorney is required in original if any person is acting on the authorization of the owner of the property. It could be general or specific.

Sources:  thehindu.com

Faridabad Metropolitan Development Authority to be set up: Haryana CM

Faridabad Metropolitan Development Authority to be set up: Haryana CM

September 17, 2018 in Investment News, Real Estate News, RERA Update

Haryana chief minister Manohar Lal Khattar, on September 13, 2018, said that since Faridabad is the second-largest city of Haryana after Gurugram, it has been decided to constitute a Faridabad Metropolitan Development Authority (FMDA), on the lines of the Gurugram Metro Development Authority (GMDA).

The chief minister made the announcement at a press conference and listed several achievements of the Town and Country Planning Department, the portfolio he holds, in the last four years.

He said the government has allowed construction of four-storey residential buildings in the state, the registration of which will be opened from, September 13, 2018. People can now construct a stilt and four floors on their plots. Earlier rules limited construction to a stilt and three floors, within a prescribed height of 15 metres. The new provision has been made in the revised Haryana Building Code 2017.

Khattar said the Haryana Building Code 2017 has been framed, in order to remove the variations and bring uniformity in building bye-laws adopted by different development agencies.

The chief minister said to address the problem of parking of vehicles in residential areas, a provision for stilt has been made. Apart from this, it has been made mandatory, to provide car bay in every residential plot, he said, adding that use of basement for the residential purpose has also been allowed, provided fire safety, lighting and ventilation provisions are fulfilled.

He said a provision for green buildings has been made, under which a building owner is provided with the benefit of additional floor area ratio (FAR) of three to 15 per cent. If the building owner sets up solar photovoltaic plant and solid waste management plant for management of water, electricity and waste, he would be provided with the additional FAR.

Khattar also said that the state government had decided to constitute an Appellate Tribunal, to hear the complaints of allottees against the decision of the Haryana Real Estate Regulatory Authority (HRERA) set up to redress the grievances of allottees. The office of the Appellate Tribunal would be set up at Karnal. The chief minister said HRERA had, so far, received 842 complaints, out of which 209 complaints had already been disposed of and the rest would be redressed soon.

He also said the Haryana Shehari Vikas Pradhikaran (HSVP), the state’s urban development authority, plans to float nine sectors, including a defence sector exclusively for defence personnel in the state, during the current financial year. These will include three sectors in Mahendergarh and one each in Bhiwani, Yamuna Nagar, Dabwali, Taoru and Pinjore. Apart from this, a defence sector exclusively for defence personnel is likely to be floated at Jhajjar, the chief minister said. Khattar said the HSVP has a plan to float 30,470 plots in 47 residential sectors across the state and a schedule, in this regard, will be issued soon.

He also said the metro stations in the Haryana segment, on the Bahadurgarh to Mundka line and the stations on the Mujesar (YMCA Chowk) to Ballabhgarh Metro Corridor, had been renamed. On the Bahadurgarh to Mundka Metro line, the MIE Metro Station had been renamed Pandit Shree Ram Sharma Metro Station; Bus Stand Metro Station as Bahadurgarh City Metro Station; and City Park Metro Station as Brig Hoshiar Singh Metro Station.

Sources: housing.com

Real Estate Activity Sees Growth Despite Increase In Construction Cost

Real Estate Activity Sees Growth Despite Increase In Construction Cost

September 14, 2018 in Investment News, Real Estate News, RERA Update

Despite an increase in construction costs, activities in the real estate sector have witnessed growth, according to a report by CBRE, a real estate consulting firm.

The report titled ‘India Real Estate – Variance in Construction Costs’ mentioned that the prices of cement have nearly tripled in the last 16 years, while the cost of structural steel more than doubled between April 2005 and November 2017.

Despite this, the overall stock of developed real estate in India’s leading urban centres would reach 8.2 billion sq. ft. by 2025, therefore, providing employment to approximately 17 million people across the country.

According to the report, out of six leading cities in India (Chennai, Bengaluru, Hyderabad, Pune, Mumbai and Delhi), Mumbai remains the most expensive. Construction costs in Chennai and Bengaluru are almost on par with Delhi and Pune. Variation in costs could be primarily attributed to different demand levels, proximity to supply centres as well as the efficiency of logistics networks across these cities.

“Rising demand for real estate as well as infrastructure development is expected to propel the construction industry towards a growth trajectory. Already, the implementation of GST has impacted the cost of raw materials and streamlined inter-state and import taxes, giving the industry a major boost,” said Anshuman Magazine, Chairman, India and South East Asia, CBRE.

The average cost of construction for a residential apartment in a mid-rise building was pegged at Rs 3,125/sq. ft. in Mumbai, and Rs 2,750/sq. ft. in Delhi and Pune. In Chennai and Bengaluru, the cost was Rs 2,500/sq. ft., while in Hyderabad such an apartment would cost Rs 2,375/sq. ft.

“Construction sector is one of the largest employment generators and has a strong linkage with various industries. We foresee strong growth for the sector over the next five years, owing to a thrust from the real estate and infrastructure sectors. The construction sector has already received a boost in the form of GST which has stabilised prices. Going forward, we foresee technology to play a dominant role,” said Gurjot Bhatia, Managing Director-Project Management at CBRE South Asia.

The report also highlighted some of the challenges being faced by the sector. One of the major challenges that the industry needs to overcome is the shortage of qualified contractors who can complete projects within a stipulated time period.

Sources: thehindubusinessline.com

DLF To Invest In Commercial Projects In Gurugram

DLF To Invest In Commercial Projects In Gurugram

September 10, 2018 in DLF News, Gurgaon Investment, Investment News

Realty major DLF will now invest over Rs 1,400 crore to develop a commercial project in Gurugram after the firm received the green nod to expand the office space by nearly 1 million square feet area.

After the Haryana government increased the floor area ration (FAR) under its new TOD (Transit Oriented Development) policy, the DLF applied for the development of increased build-up area in its ongoing Cyber Park project spread over nearly 12 acres.

The environment ministry has given the green nod for the DLF’s proposed expansion project in Gurugram after taking into account the recommendations of the Expert Appraisal Committee, as per the official document.

The approval is subject to the compliance with certain conditions, it added.

As per the proposal, the DLF will now invest Rs 1,439.11 crore to develop the Cyber Park project, as against the earlier estimate of Rs 412.67 crore.

According to the sources, the company will now get a leasable area of around 2.5 million square feet as against earlier 1.7 million square feet.

The construction of this project, which is located close to Cyber City that commands high rental, is in the advanced stage and the company has already pre-leased about 60 per cent of the area, they added.

In the proposal, the DLF has informed that the number of parking will increase to 4,425 from 3,542 cars and would generate employment to 35,532 persons.

DLF, the country’s largest realty firm, is a leading developer of a commercial real estate with a portfolio of over 30 million square feet.

To monetise its rent-yielding commercial assets, the DLF promoters have recently sold 33.34 per cent stake in its rental arm DCCDL for about Rs 9,000 crore. The realty major holds the remaining 66.6 per cent.

Recently, the company has bought 12 acres of land in Gurugram for Rs 1,500 crore to develop another commercial project.

Sources: realty.economictimes.indiatimes.com

Withdraw OCS Or CCS Given To Incomplete Projects

Withdraw OCS Or CCS Given To Incomplete Projects

September 6, 2018 in Gurgaon Investment, Investment News, Real Estate News

As part of a landmark judgment, the Haryana Real Estate Regulatory Authority – Gurugram bench has asked the Town and Country Planning Department (DTCP), Haryana, to withdraw the Completion Certificate (CC), or Occupation Certificate (OC), issued to projects that are yet to complete the development.

The authority has also asked DTCP to initiate an inquiry as to how such certificates have been procured fraudulently.

The development is expected to have ramifications across other states and regions too as several developers had rushed to secure these completion and occupation certificates ahead of the commencement of RERA in a bid to escape its jurisdiction.

It has observed many such cases where part CC, or OC, has already been issued even though the development work is not yet complete, which should be the criteria for granting these approvals.

“A fraud has been committed to secure these OCs and CCs even though the projects are yet to be completed. We have issued show-cause notices to such builders and are reaching out to vigilance for an enquiry into the matter,” KK Khandelwal, chairman, Haryana Real Estate Regulatory Authority, told ET.

The regulator has also asked DTCP to take disciplinary action against officers whose connivance builders have secured such clearances.

The authority has provided a month’s time to promoters of such projects to apply for registration, failing which penal proceedings will be initiated against them.

According to experts, the authority has taken cognizance of the trouble faced by homebuyers of such incomplete projects and builders procuring OC/CC even without completing the projects.

“This order would have wider implications benefitting homebuyers, especially since many states have diluted their real estate rules that favour builders. Such developers will be forced to comply with the registration requirement or face penalty up to 10% of the project cost as provided under the RERA,” said Abhay Upadhyay, president of pan-India homebuyers’ body Forum for People’s Collective Efforts (FPCE).

According to RERA, the development scope of the project includes external work such as roads, landscaping, water supply, sewerage and drainage, electricity supply transformer, sub-station, solid-waste management and any other work as may be provided in local laws.

Internal development work means roads, footpaths, water supply, parks, tree planting, street lighting, provision for community buildings, water conservation, energy management, fire protection and safety requirements, social infrastructure such as educational, health and other public amenities as per sanctioned plans.

Upadhyay reckons that in many cases homebuyers face problems because they are being forced to take possession without the promised infrastructure in place. The CC, or OC, can only be granted after the completion of such development work as observed by the authority.

The authority has also ruled that mere applying for Completion Certificate, or Occupation Certificate, will not exempt any real estate project from falling under the ambit of the Real Estate (Regulation & Development) Act, 2016 (RERA).

It has made it clear that the OC, or CC, granted prior to the commencement of the act will be the only condition to get an exemption from RERA registration of the project.

“…mere filing of the application cannot be treated as completion of the project/occupation of the project,” the order said.

However, it has further stated that homebuyers of these exempted projects can still approach the authority for any structural defect in the project within five years of filing the complaint. The authority has also ruled that all real estate projects will be covered for land title defect liability.

Sources: realty.economictimes.indiatimes.com

Will Rope In Builders, Industry Bodies To Finish Delayed Projects In Gurugram

Will Rope In Builders, Industry Bodies To Finish Delayed Projects In Gurugram

September 4, 2018 in Investment News, Real Estate News

The Haryana RERA will devise a mechanism to rope in developers and industry bodies to complete realty projects which have been pending for years, said the regulator’s Gurugram bench chairman KK Khandelwal at a meeting held on Monday.

“We are working on a mechanism, which will be sent to the state government for its approval so that we can deliver as many realty projects as possible,” said Khandelwal.

Earlier at Monday’s meeting, president of National Real Estate Development Council (Naredco) Praveen Jain said many developers were indeed interested in taking over the realty projects that had been pending as their original developers had gone bankrupt or not in a position to complete them owing to multiple reasons.

“In cases where the net worth is positive, many developers are interested to take over and finish the project. We have even approached the state government with such proposals but there was no policy or guideline available for the same,” said Jain.

The role of RERA, Khandelwal said, was that of a facilitator, and completion and handover of projects was its top priority. According to him, whenever the RERA bench receives a complaint, it first tries to settle it outside the authority between the buyer and the builder.

“We have resolved 15 cases till now in out-of-the-authority settlements,” he said. Till now, 4,000 projects and more than 600 real estate agents have been registered in Haryana under RERA.

A group of homebuyers who were also present at the event voiced their concerns, questioning as to why the authority was taking months for the resolution of complaints when the Act requires the complaint to be addressed in two months.

“Even though the Act mentions that buyers’ complaints should be resolved within two months, many of them have been pending for months. We need to know as to why is it taking so long to resolve the complaints by the RERA bench,” said Naveen Arora, general secretary, Universal Aura Welfare Association.

To this, Khandelwal said when the bench started its operations with 800 complaints, there was a backlog and there weren’t enough resources. However, processes would be streamlined and complaints would be resolved as soon as possible, he said.

All realty projects, he reiterated, come under the ambit of RERA even though only those under construction are required to register with the authority.

Buyers can approach the bench with their complaints against builders in any realty project, he added.

Sources: realty.economictimes.indiatimes.com

Dubai’s Emaar Properties To Partner With Local Developers To Monetize Land Bank In India

Dubai’s Emaar Properties To Partner With Local Developers To Monetize Land Bank In India

September 2, 2018 in Essar Group News, Investment News, Real Estate News

Sitting on a huge land bank of 4,500 acres across India, Dubai-based Emaar Properties is looking for partners to develop some of the land parcels that it does not intend to construct.

Emaar India’s new CEO Prashant Gupta said the company has also chalked out a plan to launch 7-8 projects in 2019 calendar year, even as its current focus is to complete 10,000 pending units by end of the next year at a cost of about Rs 1,000 crore.

“We have a land bank of 4,500 acres across India. We will not sell land as we are not allowed to do so as per the FDI law. We will go for partnership for land parcels which we don’t want to develop,” he told PTI.

Gupta said the company will provide the land to its joint venture partners, who would develop projects on their own brand.

“These projects will not be developed under the Emaar brand. No co-branding as well,” he said, adding that the company would just share revenue with its partners.

The company is in various stage of discussion with local developers, he added.

Asked about launching own projects, Gupta said the company has identified some land parcels where a company would like to develop projects.

“We plan to launch 8 projects in the calendar year 2019. One or two out of these 8 may happen even this year but we will not push for it as the focus is currently on an execution of existing projects,” he said.

The company has applied for necessary government approvals to start new projects.

On reports about the company selling its office building in Gurugram, Gupta declined to comment terming it as market rumours.

In 2005, Emaar Properties entered Indian real estate market in partnership with India’s MGF Group and invested Rs 8,500 crore through joint venture Emaar MGF Land.

However, in April 2016, it decided to end their 11-year old JV. In January this year, the National Company Law Tribunal (NCLT) approved the proposed demerger scheme of Emaar MGF Land, paving the way for two JV partners to go separate ways.

The demerger process got completed by July-end but during the last two years, the Dubai-based firm has been strengthening its India operations.

As part of this exercise, the company raised debt to complete its delayed projects.

“Our entire focus is on completion of all existing projects. We have increased the number of labourers at our sites to 9,000 from 7,000 workers a few months back,” said Gupta, who joined Emaar India in June from Aditya Birla Group where he worked about seven years.

“Real estate is a complex business. There are lots of challenges. Therefore, we are trying to build a stronger organisation. Like in Dubai, the focus in India will be on customers and speed,” he added.

Post-demerger, he said the company has restructured operation where underperforming employees have been given pink slips and those positions being filled with quality talents from across sectors.

“We would like Emaar to be India’s most admired real estate player. We know it’s a long way and will take us a few years, but that is the ultimate objective,” Gupta concluded.

Sources: moneycontrol.com

Haryana to Develop Five New Cities along KMP Expressway

Haryana to Develop Five New Cities along KMP Expressway

August 30, 2018 in Gurgaon Investment, Investment News

The Haryana government has announced that it has prepared a draft Panchgram Development Authority Bill, for the development of five cities, together labelled as ‘Panchagram’, on either side of the Kundli-Manesar-Palwal Expressway

The Haryana government has decided to develop five new cities along the Kundli-Manesar-Palwal Expressway, minister for industries and commerce, Vipul Goel said, on August 28, 2018. To be developed within two kilometres on either side of the Expressway, the area would be named ‘Panchagram’, the minister said, adding that the cities, however, will have different names. Goel said the government has already prepared a draft Panchgram Development Authority Bill, which would be introduced in the state assembly, after the cabinet’s approval.

The minister gave the information at a press conference on MSME Funding, by the PHD Chamber of Commerce. “In coming times, the KMP Expressway would completely transform the industrial scenario in Haryana. The present government has provided facilities to entrepreneurs, to give a boost to the industrial sector in the state, to create large-scale job opportunities,” Goel said. He said the industrial and commercial townships were being set up on 3,300 acres area at Kharkhoda in Sonipat. This would be the first-of-its-kind township in the state, he added.

Similarly, an industrial model township has been developed on 1,400 acres in Sohna of Gururgram. Both of these townships would be connected to the KMP Expressway. Sohna township would also be linked to the Gurugram-Sohna-Alwar Highway. He said the state government has planned to develop an industrial corridor along KMP Western Expressway, with world-class facilities.

Terming the micro, small and medium category of industries as the ‘backbone of the industrial sector‘, the state minister said such units strengthen the entire ecosystem. The MSME industry could be started with small capital and it would create large employment opportunity, he said. He said the government was working to formulate an MSME policy, which was in the final phase of development and would soon be released. It would prove to be a milestone for the MSME sector, Goel said.

The state government has also encouraged industries under the Enterprise Promotion Policy-2015. The policy provides for subsidies on investment and interest on loans, besides assistance in technology acquisition and help for testing equipment, the minister said, adding that it also provides for the refund of stamp duty and lower electricity tariff for industries.

Sources: housing.com

Haryana Government Takes Over 15 Troubled Realty Projects

Haryana Government Takes Over 15 Troubled Realty Projects

August 17, 2018 in Gurgaon Investment, Investment News

Haryana’s town and country planning department (DTCP) says it has cancelled the licences of and taken over 15 stalled real estate projects across the state. The step, which comes days after the state-run National Buildings Construction Company (NBCC) was roped in to revive Amrapali’s unfinished projects in Noida, indicates government intervention to rescue troubled real estate projects could no longer be unusual, at least not in NCR where housing projects are running years behind schedule.

DTCP’s “takeover” involves all aspects of a project, including security deposits, an official said, so that the department could complete them on its own. None of the 15 Haryana projects that have lost licences is comparable to Amrapali’s in scale. They are mostly small and medium-sized projects, both housing and commercial, with around 1,000 buyers collectively. Nine of them are in Gurugram, followed by Karnal (3), Faridabad (2) and Hisar (1).

The licences were cancelled on the orders of Jitender Sihag, DTCP’s chief town planner. Officials said the developers have around Rs 200 crore outstanding as external development charge (EDC) dues for the projects, all of which are in different stages of construction. “The developers have been restrained from sale, purchase or transaction in these projects. The licences have been cancelled and projects taken over by the director, DTCP,” Bhuvesh Kumar, senior town planner, Gurugram, told TOI.

The developers have been offered a window of 60 days to appeal. If they clear dues and remove other discrepancies pointed by the DTCP, the licence can be revived, an official said. If they fail to do so, DTCP will seize the bank guarantee and other assets.

Kumar said buyers will not be financially affected. “Buyers have to produce their agreement and the government will serve their liability at the same rate at which they had purchased it from the builder. The government will give the buyers either the property they booked or the money they have already paid, which will be recovered from the bank guarantee and other assets of the builder. Buyers won’t be affected,” said Kumar.

Projects to be hit in Gurugram include a commercial complex in Sector 110, which is to come upon a 10.25-acre plot. Though the licence is valid up to August 22, 2019, the developer could neither rectify deficiencies pointed out by the DTCP nor deposit outstanding EDC dues. Another licence for a commercial project in Sector 81A on a 10.8-acre plot was cancelled for non-compliance, EDC dues of Rs 64.65 crore, and non-renewal of the licence which was valid up to December 9, 2017.

Similarly, the licence of a commercial project in Sector 95A, on a plot measuring four acres, was cancelled because the licence has not been renewed (it was valid till July 25, 2017), non-compliance with DTCP suggestions and outstanding EDC dues. Other projects include commercial colonies on 10.4 acres in Sector 88, and on 2.4 acres in Sector 102, besides an affordable group housing colony in Sector 84 on 5.1 acres.

Sources: realty.economictimes.indiatimes.com

SEZ Space Accounts for 22% of the Total Office Stock in India: CBRE Report

SEZ Space Accounts for 22% of the Total Office Stock in India: CBRE Report

August 15, 2018 in Investment News, Real Estate News

Special economic zone accounts for about 22% of the total office stock in India across seven leading cities with Bangalore, Chennai, Delhi-NCR and Hyderabad housing almost 77% of this SEZ stock Overall.

The technology sector dominated SEZ space take-up with over 60% space absorption in the past three years.

Anshuman Magazine, Chairman, India and South East Asia, CBRE, said: “We feel that the space take-up in SEZs should remain strong till the end of 2019. We also expect that at least till the end of 2019, there will be a continuity in several trends in the SEZ segment of the commercial real estate market with growing preference for SEZ spaces by corporate, particularly those belonging to sectors such as technology, research and consulting, engineering and manufacturing, banking and financial services.”

On the supply pipeline, more than 20% of the upcoming office supply lined up for completion over the next two years is expected to consist of SEZ developments.

According to the findings over 80% of this supply, a pipeline is expected to come up in markets including Bangalore, Hyderabad, Delhi-NCR and Chennai.

The government in 2015 laid a roadmap to successfully reduce corporate tax from 30% to 25% by 2019. This also included announcing a sunset date on tax exemptions granted to SEZ developers and unitholders.

Abhinav Joshi, Head of Research, CBRE India, said, “Despite the sunset clause, corporate have been leasing space in prominent SEZs across leading cities. Firms belonging to the technology sector have had a share of almost 60% in the overall leasing in SEZ space from 2015 – H1 2018. We feel this activity will remain strong at least till the end of 2019, post which there could be a rationalization in demand.”

However, despite the sunset clause, the availability of quality office spaces offering large floor plates and options for further scalability in SEZ will continue to be an attractive factor for corporate, the report said.

Sources: economictimes.indiatimes.com

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