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Builder charging exorbitant interest from buyers on delayed payment is unfair: NCDRC

Builder charging exorbitant interest from buyers on delayed payment is unfair: NCDRC

June 14, 2019 in Uncategorized

NEW DELHI: Forcing homebuyers to pay interest in the range of 18 per cent per annum for delay in payment of installment while the builders themselves pay a paltry 1.5-2 per cent for delay in project amounts to unfair trade practice by real estate companies which cannot be enforced, the apex consumer commission has ruled, bringing relief to homebuyers.
A bench of National Consumer Disputes Redressal Commission’s president Justice R K Agrawal and member M Shreesha said that such provisions in builder-buyer agreement are unfair and unreasonable and real estate company could not be allowed to bind home-buyers with one-sided contractual terms which protect the interests of the company at the cost of the buyers.
It said that there should be parity in the rate of interest to be paid by builders and homebuyers for not complying with the terms of agreement and suggested that the builders should be compelled to pay the same rate of interest as compensation for delay in project which they demand from buyers in case of delay in payment.
The court passed the order on a plea of a homebuyer who had booked a flat in 2012 in ‘Winter Hills 77’ residential housing project in Gurugram which was being developed by a real estate company Umang Realtech Pvt Ltd. The buyer was promised possession of the flat by December 2015 and had paid around Rs 83 lakh to the builder in different instalments. As the builder failed to deliver the project even four years after the promised dateline, the buyer sought refund of the money with 18 per cent interest per annum, at a rate at which he had paid penalty to builder for delay in payment on his part.
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The company, however, said that it was liable to pay compensation at the rate of Rs 5 per square feet for delay as per the agreement. Rejecting its contention, the commission said, “It is also an admitted fact that the opposite party (the company) charged interest at the rate 18 per cent per annum for any delayed payments made by the purchasers and there is no justification in offering a meager Rs 5- per square feet, which comes to approximately 1.4 per cent per annum which is only a paltry percentage of what the company was charging for any delayed payments”.
“In any case, such a clause, where the seller, in case of default on the part of the buyer seeks to recover interest a 18 per cent per annum but offers only Rs 5 per square feet for any delay in delivery of possession, amounts to unfair trade practice since it gives an unfair advantage to seller over the buyer. We are of the view that such terms in clauses are extremely unfair and one-sided and fall within the definition of unfair trade practice,” the commission said.
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Although the commission said if the seller is charging interest of 18 per cent per annum from buyer then logically buyer should also be paid at the same rate, it, however, directed the company to refund the money with 12 per cent interest taking into account that banks have lowered the interest rate in recent years. It also directed the company to pay compensation of Rs 1 lakh to the buyer.

Sources: realty.economictimes.indiatimes.com

Gurugram: Realtech Realtors’ director arrested for duping buyers

Gurugram: Realtech Realtors’ director arrested for duping buyers

June 13, 2019 in Uncategorized

GURUGRAM: One of the directors of a city-based real estate company was arrested on Tuesday for allegedly duping over 60 homebuyers. The developer — Realtech Realtors Private Limited — is accused of collecting money from buyers for the residential project “The Luxurium” in Sector 73 and diverting the money for other purposes without completing the project.
The accused has been identified as Atul Kumar (35), a resident of Shivaji Nagar. A case was registered against the company in 2017 at Badshapur police station and according to the police, Kumar despite repeated notices did not join the police investigation and evaded arrest for nearly two years.
Police sources said that Kumar is among the three accused in the case. His other two partners are on the run. “We had been conducting raids, for some time, but the accused always managed to give police the slip. On Tuesday, however, we received information about Kumar’s location and arresed him from his house,” said inspector Mukesh Mann, SHO, Badshapur police station.
The police had registered a case in 2017 after receiving a complaint from 66 homebuyers who had invested around 24 crore in the residential project. As per the norm, a developer cannot advertise and collect money from buyers before approval of building plan on the name of “pre-launch”. The building plan of the project was approved in February 2012 but the developer had stated collecting money from buyers since October 2011. The homebuyers in their complaint said, “The company was supposed to complete the project by 2015 and hand over the possession. We have already paid the developer more than 60% of the total amount. Later we got to know that the developer has been diverting the money to their other projects.”
When contacted, district town planner (planning) RS Batth, said, “Several buyers who have invested in the project have approached us with the complaint. We carried out a probe and then recommended the filing of an FIR against the developer.” Despite several attempts, officials from the builder’s company could not be contacted.

Sources: realty.economictimes.indiatimes.com

Gurugram records 22% rise in stamp duty collections

Gurugram records 22% rise in stamp duty collections

June 12, 2019 in Uncategorized

GURUGRAM: Stamp duty collections in Gurugram have risen by approximately 22% in the past two years, despite the ongoing slump in the city’s real estate sector. The numbers are more surprising, considering reports of fewer new project launches and an inventory pile-up. The total stamp duty collected in the district was Rs 1,284 crore in financial year 2016-2017, which rose to Rs 1,303 crore in 2017-18, and to Rs 1,560 crore in 2018-19. The numbers cover all three tehsils and one sub-tehsil of the city, including Gurugram, Manesar, Farrukhnagar and Wazirabad. Wazirabad, covering the whole of Golf Course Road and Southern Peripheral Road was made a sub-tehsil in 2017-18. Not surprisingly, in 2018-19, 43% of the stamp duty collected — approximately Rs 678 crore — came from Wazirabad. According to deputy commissioner Amit Khatri, there are three reasons for the steady increase in stamp duty collections, the major one being stabilisation of circle rates over the past few years. “Circle rates of Gurugram district were regularly lowered in 2016-17 and 2017-18, as the government wanted to give the real estate sector a boost. Circle rates were again raised only in 2018-19.” While the Haryana government kept Gurugram’s circle rates stable between 2014-15 and 2015-16, they were lowered over the next two years — by 10-15% in 2016-17, and again by 5% in 2017-18. Last year, they were again raised by 10-25%. Khatri added that besides stable circle rates, ease of access and improving city infrastructure has ensured continuous investments in land, and hence increase in stamp duty collections. Industry voices, though, differed from Khatri, saying increase in stamp duty collections don’t necessarily mean growth in investment in the real estate sector. Praveen Jain, chairman, NAREDCO and MD, Tulip Infrastructure, said rise in stamp duty collections is a result of many long delayed projects that are now nearing completion. “Many long-pending projects are now nearing completion, and homebuyers are registering their properties, which explains the rise in stamp duty collections,” said Jain. He added that investment by developers in new projects remains extremely low. According to developers, another reason for the rise in stamp duty collections is the increase in floor area ratio (FAR) for independent plots. “Many transactions are happening due to higher FAR on plots, allowing addition of independent floors to plotted houses, which is another reason for the rise in stamp duty transactions. If you look at the purchase of bigger land parcels by developers, they have almost come to a halt,” said a city-based developer. Sources: realty.economictimes.indiatimes.com

Gurugram: Housing projects in seven sectors built in Ghata lake area prone to flooding

Gurugram: Housing projects in seven sectors built in Ghata lake area prone to flooding

June 7, 2019 in Uncategorized

GURUGRAM: Scores of highrise buildings and houses in seven residential sectors (58-64, along Southern Peripheral Road) built in the catchment area of Ghata bundh face a permanent risk of flooding during monsoons, or any episode of heavy rainfall, because the catchment is shaped like a gradient that will naturally bring rainwater rushing towards the lower side.
The observation has been made in a study conducted by the GMDA, which found the difference in the gradient of these seven sectors to be 10 metres, shaped like a slope going downwards from Sector 58 towards Sector 64. This implies that the flooding threat is the highest in the farthest sectors where, officials said, many housing licences having been issued, putting the projects at risk because of the danger of basements getting flooded.
While a few high-end projects have already been developed in the area, work on several others is under way. “Due to the topographical characteristics of the place, Ghata receives water from the Aravalis in Delhi as well as Gurgaon. And in case of heavy rainfall, the projects developed in the vicinity of the bundh and the lake (the lowest point of the gradient) are highly susceptible to flooding and damage to their foundation,” said a GMDA source.
This brings under scrutiny the decision to grant the licences in the first place as well as the master plan’s categorisation of the area as residential sectors. The GMDA study, conducted on the instructions of the National Green Tribunal (NGT) to survey Ghata bundh and its catchment area,
states that the department of town and country planning has issued several licences for urbanisation in Ghata in consonance with the master plan.
The report identifies a 60-hectare rea situated at an elevation below 240 metres as most vulnerable to flooding during peak stormwater flow, whereas the vulnerability is moderate above 240m. The highest point of the gradient on which these seven sectors are built is at 245m, and the lowest at 235m.
“The natural flow of the water has been disturbed in the area around the bundh and in case of heavy rain, the whole catchment is at the risk of flooding,” said a senior GMDA official.
The study was done in compliance with a 2018 NGT order which mandated the restoration of Ghata lake.
A senior official involved in making the report said that given the gravity of the matter, there is a need for an explanation from DTCP as to why housing licences were issued. “Questions must be asked why the licences were issued despite knowledge of the flooding risk in the area, and if any drainage arrangements were made to offset the risks,” said the official.
DTCP chief KM Pandurang said, “I will have to analyse the study before I can comment on its contents.” However, in an affidavit dated July 22, 2016 in the NGT, DTCP had justified the move, saying the said area had been earmarked in the development plan as a residential sector. Therefore, DTCP is competent to grant a license for development of residential colonies in the said sector, it said.
Environment experts have long been pointing out the damage done to Ghata bundh. The bundh as of now survives as an 800-metre long structure with the lake bed mostly encroached. “We need to understand if the bundh and the water body can be revived and if yes, then the government need to give alternative land to the licencees and salvage whatever is left of the water body. Additionally, all the nullahs must be cleared of encroachment so that water can flow freely,” said Chetan Agarwal, an environment activist.

Sources: realty.economictimes.indiatimes.com

Setback for Jaypee buyers in plan to shore up votes for NBCC bid

Setback for Jaypee buyers in plan to shore up votes for NBCC bid

June 6, 2019 in Uncategorized

NEW DELHI: The National Company Law Tribunal (NCLT) has rejected a plea by a group of homebuyers to treat them as a separate sub-class of creditors at committee of creditors (CoC) meetings for the insolvency resolution of Jaypee Infratech. The plea sought this classification so that absentee homebuyers’ votes can be factored in as ‘yes’ votes.
The decision will lead to further uncertainty in the resolution process of Jaypee Infratech, the real estate company behind ambitious projects like Wish Town that has fallen into bankruptcy, because it has not been able to garner the vote share from creditors that is required for the resolution to pass.
In his judgment, NCLT’s Delhi bench (member, judicial) R Varadharajan said, “The CoC, taking into consideration Section 21(2) of IBC (Insolvency and Bankruptcy Code), 2016, shall comprise all financial creditors, and must be construed as one and cannot be segmented class-wise particularly for the purpose of computation of voting share.”
The bench also refused to lower the requirement of vote share for adoption of a resolution.
According to provisions of the IBC, a minimum of 66% of the total votes of creditors at a CoC is required to adopt state-owned construction company NBCC’s offer to take over Jaypee Infratech. In the present circumstances, it seems improbable.
Though homebuyers have a 58.2% vote share in the CoC, at meetings for the resolution of Jaypee Infratech, maximum voting by homebuyers has only reached 31% of the total votes. This happens because not all homebuyers turn up at the meetings. Banks and other financial institutions have a 41% share, and the remaining is held by depositors.
To shore up the vote share, homebuyers need the absentee votes to be counted as a ‘yes’ rather than a ‘no’, as is the rule now. But under the IBC, this cannot happen till homebuyers are recognised as a separate sub-class of creditors under financial creditors.
If all homebuyers who have participated and voted so far vote in favour of the NBCC bid along with other institutional creditors who are in favour, the total vote would reach around 60%, which would still fall well short of the legal requirement of 66%. This is why the demand for a ‘yes’ vote of absentee homebuyers. If the resolution process does not go through, there are fears that the company could go into liquidation, which will hurt homebuyers the most.
The ministry of corporate affairs, in its opinion given on May 7 to the NCLT, had favoured categorising homebuyers as a separate sub-class within the ambit of financial creditors. It was an outcome-based approach that would facilitate the resolution process of Jaypee Infratech.
In its opinion, the ministry had quoted an NCLT judgement in the case of AMR Infrastructure in which it held that where the CoC consists of only one class of creditors — ‘Real Estate’ in this case — the majority vote has to be taken into consideration. The order had also noted that following the principle of “first past the post”, it was recommended that once the majority threshold was crossed, it should be treated as the voting preference of the whole.
Jaypee Infratech’s biggest financial creditor IDBI, which has a vote share of 18.01% in the CoC, has asked permission from NCLT to vote against the NBCC’s bid to take over the company. But other smaller creditors like Life Insurance Corporation with a vote share of 3.15% and some other banks, it is learnt, are supporting the resolution through NBCC’s takeover.
A majority of home buyers favours NBCC’s takeover. If the majority’s view is taken as that of the entire class as in the case of AMR, the Jaypee Infratech resolution can be reached.

Sources: realty.economictimes.indiatimes.com

Clear property tax by July 31 and get 10% rebate: Gurugram civic body

Clear property tax by July 31 and get 10% rebate: Gurugram civic body

June 4, 2019 in Uncategorized

GURUGRAM: MCG on Monday announced a 10% rebate on property tax payments for all those who clear their dues for the financial year 2019-20 before July 31.
MCG commissioner Yashpal Yadav asked the property owners to utilise this opportunity and clear their dues. “The property owners can pay the property taxes online. We have taken the whole process of property tax payments online to ensure more transparency in the process,” Yadav said.
He added that all the grievances related to property taxes can also be raised on the portal. In the last two months, MCG has received around Rs 17 crore as property tax payments.
Officials claim that the online system has helped streamline the property tax payments’ system for better.
According to sources, the number of people clearing their dues between April and June has gone up considerably this year.
While every year only 2,000 to 3,000 property owners clear their dues in the first quarter, this year around 11,282 owners have cleared their dues till May 31.
“The increase in number of property owners paying their taxes at the beginning of the financial year is a good sign for us. It will help bring down the number of defaulters eventually,” said a senior MCG official.
Meanwhile, the corporation has sent 400 notices to property tax defaulters and the process of sealing and demolitions is also underway. MCG had planned to auction 91 properties but the dates have been postponed thrice in the last one month.

Sources: realty.economictimes.indiatimes.com

Over 55% complaints registered with Haryana RERA disposed-off

Over 55% complaints registered with Haryana RERA disposed-off

May 29, 2019 in Uncategorized

NEW DELHI: Of the total 4,785 registered complaints, the Haryana Real Estate Regulatory Authority (H-RERA) has disposed off 2,718 till date.
“Most of the complaints registered are related to delay in projects and refund of money from the builders. H-RERA has also imposed heavy financial penalties on various developers for delay in projects,” said K.K.Khandelwal, chairman, H-RERA.
He was speaking at the M B M Engineering College, Jodhpur Alumni Association meet.
Khandelwal further added that the reason for delay in various projects is not always due to fault of the developer, it is the concerned government authorities which are equally responsible for the delay as they take their own time to issue sanctions related to the project. The government officers and establishments should also be made answerable for delay in projects.
In Gurugram, about 410 real estate projects and 1,900 real estate agents are registered with H-RERA.

Sources: realty.economictimes.indiatimes.com

Gurugram: DTCP cancels OCs of 38 properties over violation of norms

Gurugram: DTCP cancels OCs of 38 properties over violation of norms

May 21, 2019 in Uncategorized

GURUGRAM: The department of town and country planning (DTCP) has cancelled occupation certificates issued to 38 residential properties in DLF areas and Sushant Lok 1 for violating building norms.
According to DTCP, these properties were running commercial activities in residential buildings, causing loss of revenue for the state exchequer to the tune of several crores of rupees every year.
As per rules, commercial activities are not allowed in residential areas, be it licensed colonies that come under DTCP or plots in sectors falling under Haryana Shahari Vikas Pradhikaran (HSVP).
District town planner (planning) RS Batth told TOI that out of the 38 properties, 30 are situated on Golf Course Road and in DLF area while the remaining are in three blocks of Sushant Lok 1.
“The action was taken after completing the due process. A team of junior engineers visited the properties and noted the violations, after which the OCs were cancelled. The DTCP director, during his visit to Gurgaon last week, issued strict instructions to check illegal commercial activities and take action against such violators,” Batth said, adding that the department is writing to the district administration so that these properties are not registered at the tehsil level.
DTCP director KM Pandurang said, “We will continue with action against such illegal constructions and violations.”
TOI had earlier reported that more than 100 residential buildings, after procuring occupation certificates from the government, had made changes in the structures to start commercial activities, including gym, salon, showrooms, clinics, educational institutions and others.

Sources: realty.economictimes.indiatimes.com

How Gurugram civic body is keeping track of illegal construction via app

How Gurugram civic body is keeping track of illegal construction via app

May 19, 2019 in Uncategorized

GURUGRAM: The ‘Violation’ mobile application, developed by MCG, has received around 830 complaints alleging illegal construction and encroachments in the past three months.
While 570 complaints were recorded on the app in February, another 172 and 88 complaints were received in March and April, respectively.
According to an MCG official, the app was launched in an attempt to digitise the enforcement operations of the corporation, and now all the processes related to the enforcement wing are carried out online.
“The app has helped us bring in transparency and accountability in handling encroachment and unauthorised construction complaints. At the same time it has also made it easier to maintain a record of all such activities in the city,” said MCG commissioner Yashpal Yadav.
Yadav added that every junior engineer in the wing has the app installed on their phones and when they receive the complaint on the app, they have to attend to it and update the status on the ground. “They need to be within a specified perimeter of the spot mentioned in the complaint in order to upload the details,” said Yadav.
The app was developed by the in-house GIS lab in order to ensure that the data cannot be misused by anyone outside the department. The app has a feature that sends a sealing notice to the defaulter automatically once a complaint gets registered. Illegal constructions and encroachments are rampant in the city and MCG has drawn flak for not being able to contain the menace despite regular sealing and demolition drives.
Between April 2018 and February 2019, the MCG has issued 846 notices for encroachments. Additionally, 389 demolition orders were passed during this time with 156 sealing drives and 141 demolitions.

Sources: realty.economictimes.indiatimes.com

Gurugram: Homebuyers, shop owners accuse official of corruption

Gurugram: Homebuyers, shop owners accuse official of corruption

May 18, 2019 in Uncategorized

GURUGRAM: Owners of hundreds of flats in residential societies and commercial spaces in malls have filed a series of complaints against the district registrar of firms and societies, I S Yadav, with the additional chief secretary (ACS) of the industry and commerce department, Devender Singh, seeking a probe into corruption charges against the former.
The complainants are mostly owners in Westend Heights, Ridgewood Estate, CHD Avenue 71 and Central Plaza Mall.
Shop owners of Central Plaza Mall in Sector 53 complain of misappropriation of mall association’s fund by the current governing body, which has gone unchecked by the district registrar. Yogesh Saini, owner of a shop in Central Plaza Mall, said Yadav did not obey the 2017 order by the state registrar’s office for Yadav to audit accounts of the shop owner’s association, following complaints by shop owners, which he did not obey.
Saini alleged several crores of rupees of the association’s funds were misappropriated because Yadav failed to take action.
A resident of Westend Heights, Ritu Bhariok, said representatives of five residential societies, including herself, had met ACS Devender Singh in Chandigarh to discuss their grievances and to demand action. Bhariok alleged the Westend Heights RWA has been concealing the society’s key financial records and documents, which every property owner and member is entitled to review and receive.
“Despite clear directions and multiple orders by the state registrar of societies over the past two years, Yadav has been ignoring the wrongdoings and avoiding compliance of directions by his senior officials, causing harassment to residents,” said Bhariok.
Ritu Bagai, another Ridgewood Estate resident, said following RWA elections, residents lodged complaints against Yadav for arbitrarily approving the governing body, in violation of Haryana Registration and Regulation of Societies (HRRS) Act 2012, but no action was taken. She added residents are hopeful the ACS will take action against Yadav.
Gaurav Kalra, resident of CHD Avenue 71, said, “We’d first reported financial irregularity and other violations by the RWA to the district registrar on April 2 2018, but our complaint is still lying unresolved.” He added even after repeated requests, Yadav has purposely delayed hearings/proceedings in the name of natural justice, thus extending time allowed to the governing body, which the latter has used to further misappropriate public funds and manipulate/tamper records. He wrote that although the district registrar’s inaction was brought to the state registrar’s notice, no relief has been offered till date.
When contacted, I S Yadav said, “Residents can raise their grievances but many of the complaints were filed to put pressure on me. Issues raised by residents are being looked into as per HRRS Act 2012 norms,” adding most complaints about RWA elections etc have already been resolved, only a few are still being processed.

Sources: realty.economictimes.indiatimes.com

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