Real Estate News

Gurugram: Builder may be asked to pay Rs 1.5 crore for chopping 2,000 trees

Gurugram: Builder may be asked to pay Rs 1.5 crore for chopping 2,000 trees

May 5, 2019 in Real Estate News

GURUGRAM: A real estate developer may be asked to pay Rs 1.5 crore as penalty for chopping off 2,200 trees in Choma village near Palam Vihar in 2017.
After the National Green Tribunal (NGT) directed the forest department to analyse the damage due to the felling of trees, it prepared a report. “The district forest department has submitted the report with the recommendation on the penalty. However, the head office will send it to the NGT and then a final decision will be taken,” said a source, requesting anonymity.
The report has been sent to Chandigarh and it would now be sent to senior officials at the NGT.
In 2017, the developer had axed 2,200 trees in Choma, although, the forest department had permitted cutting of only 20 trees. The trees were felled in the first week of February in 2017 and an FIR was lodged against the developer and some forest officials in March 2017. The builder was allegedly helped by a forest guard, a forester and a range forest officer. Later, two forest guards were suspended and a probe was conducted by the forest department. Many forest department officials had also complained about the incident alleging negligence. But no action was taken.
In March this year, the NGT directed the forest department to analyse the damage and recommend the penalty amount. It asked the forest department to submit a report within two years.
Activists, however, feel that imposing a penalty is not enough. “The department needs to understand that the amount is very small for the real estate developer. It is definitely not enough. Strict action should be taken against any employee and officer found responsible for tree cutting at that time. I think the builder should also be given the responsibility to plant trees and take care of those for a few years,” said Vivek Kamboj, an environmentalist. Kamboj had filed a complaint with the forest department and the state environment ministry when the trees were felled.

Sources: realty.economictimes.indiatimes.com

Gurugram: Clear EDC to get papers for properties built on farmland

Gurugram: Clear EDC to get papers for properties built on farmland

May 4, 2019 in Real Estate News

GURUGRAM: The Gurugram Metropolitan Development Authority(GMDA) will now charge 40% of external development charges (EDC) at the time of approving the building plan, and 50% before issuing occupation certificates (OCs) for all properties which earlier came under agricultural zone but are now part of the ‘urbanisable’ zone after change of land use (CLU). A notice in this regard was passed on Wednesday.

The order became necessary after changes were made in the Gurgaon-Manesar Urban Complex plan, and will mostly cover areas in new sectors and Manesar. “After changes in the development plan, it has become imperative that recovery of full EDC is made in cases where CLU is involved. While the money recovered might not be very high, it will still aid development,” said a senior GMDA official.

He added the authority had proposed to the government that 100% recovery be made before issuance of OCs in all cases involving CLU. But four months since they sent their proposal, the government is yet to take a decision. “Hence we decided to charge EDC in a staggered manner so that OC applications aren’t kept pending. The staggered payments, however, will be applicable only till the government takes a decision in the matter,” said the official.

A copy of the notice accessed by TOI stated EDC receipts by government are well short of expenditures made under this head, as far as the Gurgaon-Manesar Urban Complex is concerned. And the significant deficit in the EDC receipts is impeding fulfilment of development obligations in the city.

GMDA will be in a serious financial crunch if it fails to recover the funds under EDC charges soon from the state government. One of the authority’s major revenue sources is EDC, but in the last two years, it has not received any funds from DTCP, which has reflected poorly on GMDA’s books.

The issue was raised in GMDA’s budget meeting in April, in the presence of chief minister Manohar Lal Khattar, where DTCP assured GMDA it will release EDC funds soon enough. GMDA has also allocated around Rs 534 crore of development works to be funded from EDC charges. Beyond EDC, GMDA also plans to start levying stamp duty charges and excise charges.

Sources: realty.economictimes.indiatimes.com

Gurugram: NCDRC directs Ramprastha City’s builder to refund home buyers’ money

Gurugram: NCDRC directs Ramprastha City’s builder to refund home buyers’ money

May 3, 2019 in Real Estate News

GURUGRAM: The National Consumer Disputes Redressal Commission (NCDRC) on Wednesday directed builder Ramprastha to refund the entire amount paid by seven homebuyers along with 12% interest.
The buyers had paid Rs 70-80 lakh for flats in SKYZ project, a part of Ramprastha City in Sector 37D, around eight years ago.
Now, along with the interest they are expected to get around Rs 1.2 crore each from the developer, who has been given four weeks to refund the amount.
Ramprastha City welfare association on behalf of seven buyers had earlier approached the commission against the developer seeking refund as completion of the project was delayed for several years.
Ramprastha launched the mega project spread over 450 acres in Sector 37D along Dwarka Expressway in 2008-09. It has around 6,000 flats in six different projects.
Three of the projects were supposed to be ready by 2012, one project by 2014 and the two other projects were supposed to be ready by 2015. Most projects, however, are incomplete.
“As per the construction-linked plan, the builder takes around 90% of the payment from buyers by 2013. By that time, around 60% of the work was done. And the status is more or less the same till date,” said Pradip Rahi, a resident of Ramprastha City and president of the welfare association.
With no hope of getting their flats in near future, buyers formed an association in 2013 and started meeting government authorities seeking their intervention to expedite the project’s completion.
“The association on behalf of around 400 buyers approached the commission in 2015, but for two years there had been no progress in the case, and some of the buyers started getting impatient,” Rahi said, adding that seven buyers came forward seeking refund from the developer in 2017.
A separate case was filed in 2017 in NCDRC on behalf of seven buyers of SKYZ project, and for two years the developer kept on delaying the case on some or other pretext.
“Some of the buyers had approached Haryana Real Estate Regulatory Authority (HRera). The developer cited this to delay the court proceedings,” said Rahi.
After two years of wait, finally NCDRC on Wednesday passed an order in favour of the seven buyers.
“We demanded 15% interest, but it was settled for 12% simple interest. We agreed to it,” said Rahi.
“This is good news for us as we won the case with 12% interest. I’m happy for our seven members who believed in people’s power and joined the association to fight the case. Other case filed by us is listed for final hearing in May. We expect justice from the court,” he said.
Sushil Kaushik, the counsel for buyers, said, “Justice can be delayed but can’t be denied. I was facing a tough time to explain buyers as the judgment was getting delayed since 2015. But this win will regain trust of buyers to fight against injustice.”
A representative of Ramprastha said the commission passed the order on Wednesday, and the builder had not received the certified copy so far.
“We will study the order and take an appropriate step,” he said.

Sources: realty.economictimes.indiatimes.com

Gurugram civic body plans unique code for its properties to check land-grab

Gurugram civic body plans unique code for its properties to check land-grab

April 30, 2019 in Real Estate News

GURUGRAM: Municipal Corporation of Gurgaon (MCG) has started the process of identifying and marking its properties within the city in a bid to curb land grab cases.
A unique code will be attached to all its properties, including empty plots and buildings.
According to sources within MCG, the corporation will mark more than two-and-a-half-thousand acres of land in the city to keep a track of its assets. As of now, the corporation only has documentary records of the same. The unique codes will be updated in the MCG online database.
“Once we have identified the properties, we will generate a unique code for each property and update that in our database with the deatils of status and ownership of that property. This will help us monitor our assets in a much more efficient manner,” said an MCG official. He added that the process of identifying and marking properties had already begun and the planning wing of the corporation planned to finish the exercise in the next 15 days.
In the empty plots, MCG will also put up boards, specifying it is the corporation’s land. According to sources, MCG currently owns about 2,500 acres of land in the city and of this, at least 196 acres has been encroached upon. MCG is also thinking of ways to utilise the empty properties so that it can save them from encroachment, and also generate some revenue. Land encroachment is a major issue for the corporation as it not only leads to revenue loss but also gives it a bad name.
Additionally, the anti-encroachment drives demand a lot of manpower and other resources. Recently, a land grab case in Sector 72 landed in the National Green Tribunal (NGT). An unauthorised colony had come up on land earmarked as open space. In April, MCG had found out that around three acres of its land in the Baliawas village had been grabbed by seven people in connivance with the tehsil officials. An inquiry in the matter is currently under way.

Sources: realty.economictimes.indiatimes.com

Rating cut for two Reliance group company papers alarms market

Rating cut for two Reliance group company papers alarms market

April 29, 2019 in Real Estate News

MUMBAI: Mutual funds and non-banking finance companies (NBFCs) are getting the shivers over possible adverse investor reaction to sharp downgrades of Reliance Home Finance (RHFL) and Reliance Commercial Finance (RCFL) debt instruments stemming from the financial status of the indebted Anil Ambani-led Reliance Group.
The market has been jittery since the shock default by Infrastructure Leasing & Financial Services (IL&FS) in September last year sparked a liquidity crisis that hit NBFCs. One of the ripple effects has been the inability of some mutual funds to make payments on time to fixed maturity plans subscribers after investing in unsecured corporate debt.
Borrowing costs may rise and liquidity may shrink in the debt market with key investors such as mutual funds holding back on investments. Fund houses may also raise their cash position, expecting a surge in redemptions as in the aftermath of the default by IL&FS. “Whenever there is a default, lenders tighten norms of lending,” said Mahindra Finance managing director Ramesh Iyer.
Rs 2,600-cr exposure in RHFL, RCFL
“Two things will happen — first money becomes costly and second it may not be available for all. Lenders may characterise risks differently and some people might find it difficult to raise funds. NBFCs with good ALM (asset and liability) norms are able to borrow based on fresh disbursement needs,” he said.
Rating cut for two Reliance group company papers alarms market
The differential between triple-A NBFCs and non-triple A ones is now in the range of 60-100 basis points compared with 20-40 basis points before August last year, traders said. The gap may widen further by 20-30 basis points. One basis point is onehundredth of a percentage point.
“There seems to be some pressure on rates and liquidity, which are already in deficit in the banking system,” said Aditya Birla Mutual Fund CEO A Balasubramanian. “Fund managers will be more judicious in subscribing to debt paper. The Reliance Group’s exposure to mutual funds is nothing fresh but was from the past before August last year.”
The silver lining is the magnitude of investment will not be as large as that of IL&FS. Unlike IL&FS or Zee, fund managers have already factored in negative news flows amid lingering troubles for the Reliance Group, which includes Reliance Communications.
Mutual funds are estimated to have over Rs 5,000 crore invested in eight Reliance Group companies, of which nearly Rs 2,600 crore is in RHFL and RCFL securities. Reliance Mutual Fund holds about twothirds of the two companies’ bonds, according to a market estimate.
“Borrowing cost may go up in the short term highlighting weak players in the market,” said Value Research CEO Dhirendra Kumar. “The extinction of unfit is a natural course. Darwin’s theory (survival of the fittest) is finally at work in India.”
RHFL and RCFL have delayed bank loan repayments.
“If a sector is mired in default, lenders are not willing to lend to them,” said PNB Housing Finance managing director Sanjaya Gupta. “If there is a shortage of credit, it will lead to consolidation in financial initiations.”
Care cut RHFL’s rating to D for default from BBB+ as the company failed to repay bank loans on time.
“There has been rescheduling of repayment in one of the bonds issued by RCFL,” said Ravi Kumar, analyst at Care Ratings. “Other instruments downgraded have high risk of default given the weakening of the credit profile of the companies.”
Care also downgraded an RCFL nonconvertible debenture (NCD) series worth Rs 200 crore to D from BBB+ on which there has been a mutually agreed deferment in repayments. Payments due on April19 have been deferred to September. Besides, the rating company has downgraded various NCDs/other credit facilities mostly to C (junk status) from BBB+.
The two companies have been trying to sell good-quality loan portfolios with both raising nearly Rs 8,000 crore from such efforts in the past six months. They aim to raise about Rs 500 crore every month, said a company spokesperson.
RCFL and RHFL expect to regularise all repayments shortly, they said in statements on Saturday.
The companies “have been affected by a timing mismatch in regard to the ongoing further securitisation / monetisation proposals with banks, etc., and the same has resulted in minor delay on principal repayments,” Reliance Capital said.
“NBFCs’ liquidity has been tight for the last six-seven months and people are risk averse due to elections,” said Karthik Srinivasan of ICRA. “People will continue be cautious.”
Rating company ICRA also cut RHFL’s commercial paper programme to A4 from A2 earlier.

Sources: realty.economictimes.indiatimes.com

MREAT penalises home buyers for suppressing facts in carpet area dispute

MREAT penalises home buyers for suppressing facts in carpet area dispute

April 28, 2019 in Real Estate News

The Maharashtra Real Estate Appellate Tribunal (MREAT) has set aside two MahaRERA orders which had asked L&T Parel Project to pay a compensation of Rs 2 lakh for ‘harassing’ home buyers, and directed the developer to reduce the price of the flat since its carpet area had been reduced.
The tribunal presided over by a bench consisting of Chairperson Justice (retd) Indira Jain and Member, Administration, SS Sandhu, also held that the home buyers, Alok Kejriwal and son Akshat Kejriwal, were guilty of suppressio veri (suppression of truth), and asks them to bear the cost of the litigation.
The case relates to a complaint by Kejriwals, who had booked flat 2804 in L&T’s Crescent Bay project in Parel, alleging that the developer had reduced the carpet area given in the allotment letter when they registered the project with MahaRERA and hence price of the flat should be reduced. In December 2018, MahaRERA Member Bhalchandra Kapadnis had relied upon a report by authority’s technical officer which said that developer told the Kejriwals that the area of the flat is 119.69 sq m when the correct area by RERA definition should have been 112.06 sq m, and recommended a proportionate decrease in the cost of the flat. Kapadnis had ruled in favour of home buyers and imposed a penalty of Rs 2 lakh for harassing them. He had also, on developer’s plea, allowed L&T to either abide by his ruling or refund the entire Rs 6.53 crore paid by the home buyers.
L&T Parel Project challenged both September and December 2018 orders before the tribunal. The developer advocates Naushad Engineer, Chirag Kamdar and Abir Patel contended that the home buyers had suppressed material facts. They submitted that in April 2015, Kejriwalas had booked flat 2704 in their joint names following which an allotment letter was issued on July 7, 2015. They were asked to register the agreement for sale, but Kejriwals postponed the registration citing personal reasons. In February 2017, they approached the developer again requesting a floor rise and shifted their booking from flat 2704 to flat 2804 on the 28th floor. They said in 2015 the carpet area was calculated as per existing Maharashtra Ownership of Flats Act and RERA methodology excludes balconies from its carpet area definition and hence creates an impression that 7.63 sq m or 82.17 sq ft has been reduced, there is no reduction of flat area. They argued that both flats were identical and except floor rise, there is no change in flats.
Ruling that the home buyers could not establish reduction in area of flat 2804 as alleged, the tribunal members said that the MahaRERA orders of September and Decemebr 2018 were not sustainable in law.
When contacted, Advocate Sunder Bhandary, who appeared for the Kejriwals, said “We are not satisfied with the tribunal’s ruling. RERA definition of carpet area excludes balconies and how can they that area be included then. The tribunal did not consider this, and we will go in second appeal to the Bombay High Court.”

Sources: realty.economictimes.indiatimes.com

Developers can’t use buyers’ funds to repay loans, say UP-RERA & Haryana RERA

Developers can’t use buyers’ funds to repay loans, say UP-RERA & Haryana RERA

April 25, 2019 in Real Estate News

GURUGRAM | NOIDA: Developers should not repay loans taken from banks and financial institutions by using 70% of the total amount collected from buyers and allottees of a project in escrow accounts, both HRera and UPRera have ordered. This amount is meant to complete construction of the project and meet the land cost, the regulatory authorities said.
In a case in Gurgaon, the local bench of HRera has directed the police commissioner to register a criminal case against Indiabulls Housing Finance Limited, Industrial Finance Corporation of India Limited and PNB Housing Finance Limited for using money from the 70% of the amount collected from buyers and allottees, which it said should be used to complete construction of the project as per the Rera Act.
HRera’s Gurgaon chief KK Khandelwal said it is probably the first-of-its-kind decision since the regulatory authority is constituted, in which it has asked the police to initiate action against the financers of the realty project.
The authority has taken a serious note of the fact that lending institutions “fraudulently and arbitrarily withdrew 100% of the receivable deposited in the Rera account in violation of Section 4(2)(l)(D) of Rera, 2016”.
According to the Rera provision, “70% of the amounts realised for the realty project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a bank to cover the cost of construction and the land cost, and shall be used only for that purpose.”
The builder can use only 30% of the amount collected from allottees for other purposes, including creating charge in favour of lending institutions to repay loans.
In the normal course, lending banks and institutions get repayment of their loans from the escrow accounts opened by developers where all the receivables get deposited.
If the collection from allottees in a particular month is less than the installment supposed to be paid to lending banks and institutions, the entire amount in the escrow account goes to lenders. But this leaves the project high and dry owing to cash crunch, and the construction could be stalled.
Khandelwal said before making a provision for any purpose, 70% of the money collected from allottees must go to another escrow account, which should be called Rera account, to be maintained for the purpose of construction of the project and meet the land cost under the supervision of Rera.
Khandelwal said the developer “cannot create lien on the project” to raise money for a purpose other than completing construction of a project.
He also said the provision in law is to address the mischief, earlier being committed by unscrupulous builders to divert amount realised from the allottees to other projects or for different purposes other than the project, for which amount has been deposited by the allottees.
UP Rera in a letter to various banks said, “It is obligatory both for the promoter and the bank to ensure strict compliance of the above stated provisions of the Rera Act.”
UP Rera also pointed out that some of the banks, especially those which have sanctioned loan to promoters, arbitrarily adjust the entire amount deposited in the account against the outstanding loan of the promoter, instead of transferring 70% of the money collected to the escrow account for the purpose of construction and payment of land cost.’’
He also said HRera has issued strict directions to these financiers to deposit back the excess amount withdrawn by them in violation of the statutory provision of Rera, 2016. Also, a show cause notice has been issued to the developer, asking it why penal proceedings should not be initiated against it for violating the provisions of the Act and in particular section 4(2)(l)(D).

Sources: realty.economictimes.indiatimes.com

SpringHouse looks to open 8-10 centres by December 2019

SpringHouse looks to open 8-10 centres by December 2019

April 23, 2019 in Real Estate News

NEW DELHI: SpringHouse, a Delhi-based co-working firm, is looking to open 8-10 centres by December 2019, said
Mukul Pasricha, founder & CEO of the company.
Most of these new centres will be located in the National Capital Region. It currently has 15 operational centres across NCR.
“Apart from NCR, we are also looking at Bengaluru. We plan to open a centre their by September 2019. In Bengaluru we would be looking to open 20,000-25,000 sq ft space,” said Pasricha.
The company is also looking to raise Rs 15-16 crore post September 2019. “As of now we are bootstrap but as and when we start scaling up further, we would be looking to raise funds,” he added.
In the financial year 2019, SpringHouse generated a revenue of Rs 6 crore and is now targeting a revenue of Rs 12 crore by December 2019.
By June, the company plans to open two new centres in Gurugram; one of them is in MG-Road spread across 30,000 sq ft with a seating capacity of 500 while the other is situated in sector 44, Gurugram. It is spread across 10,000 sq ft and will have 135 seats.
It also opened a centre in Noida Sector 16 with 350 seats. The 23,500 sq ft space is taken up from Pioneer House.

Sources: realty.economictimes.indiatimes.com

Gurugram: Over 400 buyers of Mahindra Aura protest against misuse of funds

Gurugram: Over 400 buyers of Mahindra Aura protest against misuse of funds

April 22, 2019 in Real Estate News

GURGAON: Over 400 homebuyers and residents of three different projects in the city staged protests against the developers and RWA on Sunday. The protesters had similar grievances — financial irregularities and delay in possession by the builder.
On Sunday morning, hundreds of residents of Mahindra Aura in New Palam Vihar staged a protest at the society clubhouse against the “malpractices and financial irregularities” conducted by their RWA.
Aura residents said they had brought a no-confidence motion and dissolved the current RWA by calling a special general body meeting on September 16 last year, but the RWA continues to hold financial powers.
“The RWA office bearers have, in collusion with the district registrar office, carried out several illegal activities, including replacement of security agency at a higher cost, increasing maintenance charges and installing poorly-planned CCTV cameras at a cost five times greater than the market rate,” said Tej Malik, a protester.
Mahindra Aura RWA president Yashish Yadav said the matter is in court. “A group of residents are harassing RWA office bearers,” he said.
Meanwhile, around 200 buyers of Greenopolis housing project in Sector 89 protested at the New Delhi residences of the directors of developer Orris Infrastructure, Vijay Gupta and Nirmal Singh. The buyers alleged that the builder has stopped meeting them after taking their money despite the project being way past its 2016 deadline. An Orris representative said he couldn’t comment on the matter as the case is with Rera.
Around 100 homebuyers of Shree Vardhman Flora also protested against the developer at the project site in Sector 90 against the delay in completion. “No work is going on at the site and completion doesn’t seem likely in the near future,” said Shambir Yadav, a buyer. Vardhman spokespersons didn’t revert to messages sent by TOI.
Sources: realty.economictimes.indiatimes.com

Smartworks leases 3 lakh sq ft space in NCR

Smartworks leases 3 lakh sq ft space in NCR

April 12, 2019 in Real Estate News

MUMBAI: Flexible workspaces provider Smartworks has picked up over 3 lakh sq ft office space across two new facilities in Gurgaon and on the Delhi-Noida Expressway through long-term leases spread over 9 years.
With these new leases, Smartworks’ total footprint in India has touched 2 million sq ft with total investment of $30 million so far.
With these new spaces, Smartworks’ Delhi-NCR presence has increased to over 4 lakh sq ft spread across 6 centres as the company already has 2 centres in Gurgaon and one each in Delhi and Noida.
Both the new centres, picked up through lease payment mode, will cumulatively add seating capacity of 6,500, furthering the company’s expansion plan and taking total number of desks to over 40,000 across 20 centres. The new leases are part of the company’s plans to expand its operations to 20 million sq ft over the next 3-5 years.
“In less than 3 years since our inception in April 2016, we have grown from one 9,800 sq ft centre in Delhi to 2 million sq ft across India now. We have been moving steadily towards our target of 20 million sq ft. The deal pipeline is robust and we are optimistic of achieving the portfolio size with solid occupancy levels,” Neetish Sarda, founder, Smartworks, told ET.
Both Gurgaon and on Delhi-Noida Expressway centres are expected to be operational by April.
In November, the company had picked up an 82,000 sq ft on lease at Fleet House, a commercial property on Andheri-Kurla Road in Mumbai for a total tenure of 15 years. This workspace consists of seating capacity of over 2000 and has been pre-booked by 40%. With the addition of the new centre, Smartworks’ total footprint in India has reached 1.5 million sq ft.
“Gurgaon and the Delhi-Noida Expressway are two of the most important business hubs in North India, with several large domestic and international firms, across sectors, either establishing or expanding their footprint here. Both our new centres aim to address the continuously growing demand for agile workspaces here,” Sarda explained.
Several large enterprises that are focused on optimizing their overall costs for office spaces prefer agile workspaces as it leads to cost savings of more than 15%-30% on enterprise level.
According to a recent report by property consultant Cushman & Wakefield, in 2018, co-working players leased nearly 5 million sq ft of space. This is the highest ever annual leasing recorded for the co-working segment.
Flexible space operators have grown rapidly in the past two years, reaching a total footprint of nearly 40 million sq ft in the first half of 2018 in 16 major Asia-Pacific cities including Delhi NCR, Mumbai and Bangalore. India is expected to emerge as one of the world’s largest co-working markets by 2022, showed a recent report.

Sources: realty.economictimes.indiatimes.com  

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