Category: Real Estate News

Important Facts to Look For in The Real Estate Bill

The real estate industry has cordially praised the amendment of Real estate (Regulations and Developments) Bill in 2015 approved by Union Cabinet. This bill has been introduced to unite the regulations and environment in the industry. The main motive of the bill is to provide the best services to the buyers and investors by giving the possession on time and fastest project deliveries, proper and effective redressal of customer grievances, safe and secured investments and maintained growth in the realty sector

IMPORTANT FACTS TO LOOK FOR IN.jpg
Some featuring facts which are favorable for the homebuyers in the unauthorized market are discussed below-

Regulations of real estate projects and agents- A disordered realty sector has many small association developers and agents who are willing to expand themselves day and night. There was no organizer or any association who can control and regulate this disarranged industry. There was a lack of laws and rules which can stop the immoral activities of developers to save the buyers interest and hard-earned money. The bill is now introduced to bring the stakeholders under the regulations where they can suffer from 3 years imprisonment for developers and 1 year for agents for not obeying the laws.

Escrow amount limit increase- A developer uses a temporary account to stop the outflow of funds from one project to another. This account is called the escrow amount. After the introduction of the bill, the developers are bound to keep 70% of funds in escrow amount. Though some of the developers welcomed this measure and some have criticized it.

Disclosures of information are compulsory– A common phenomenon in the real estate is homebuyers are not being provided with full information about the projects. The amendment now made it compulsory for the developers that they should convey every information about the projects including layout plans, floor plans, and registration of the projects, details of the architect agent and contractor which will make property dealing transparent.

Weighing consumer opinion– After the amendment of the bill, the promoters and developers are being restricted for making changes in the project specifications without taking the consent of the buyers and investors.

Simplify the grievance redressal– The bill ensures that the grievances which are raised by the buyers will be solved and settlement of the disputes will be done by forming Appellate Tribunal by appointing adjudicating officers. The customers can appeal in the district courts in 644 consumer courts. This process will decrease the expenditure and consume less time for redressal.

Buyers can plan to invest in Flats In Rajarhat as the projects are capable to deliver the possession on time and all the apartments are made with good interiors.

SC bars construction work in SWM-failed states across the country

States that have missed the boat to formulate their respective solid waste management policies are going to have a harder payback this time.  On this Friday, a bench of Justice M B Lokur and Justice S Abdul Nazeer issued a strong writer order against these states and UTS.

What is there in this order?

The order sets the barricade around the upcoming and on-going construction works across these states and UTS which have failed to formulate their solid waste management (SWM) under the Solid Waste Management Rules 2016. These states are not allowed to commence their construction works until they codify their SWM policies.

How does it act on the states’ revenue?

It seems that states have been either delaying or chose to remain unresponsive after the release of the order back in the year 2016.
Now if states continue with the same limp demeanour, it will definitely bruise the revenue of the state from the real estate sector.
At present, it also takes a toll on the modus operandi of the very section as well.
What are the consequences that the real estate sector has to accost?
Sometimes well-meaning plans can bring undesired opposite results. We have seen this in the recent past when the country had to go through a severe cash crunch post demonetization when the mean objective was to eradicate the black money circulation in the credit flow. Common people had to suffer a lot and real estate was one worst-hit sector in those days.
SC has prohibited construction works in states and UT’s including Maharashtra, Madhya Pradesh, Uttarakhand, Chandigarh and Goa for their “pathetic” attitude in not framing proper policy on solid waste management without speculating the aftereffects.
“People have already spared enough strolling along with the free will of developers and realtors. After RERA came into the frame, they finally gained the relief of faith that their hard-earned money won’t get lost in the whirl as they permanently received a legal platform where they can lodge the complaint against the counterfeit activities of the real estate state holders. RERA also brought up the assurance that the project deliverance would be on-time along with the quality check. The recent order of the Apex Court is challenging the regulations of RERA in a straight line,” said Mr Mahesh Somani, Chairman – National RERA Committee, National Association of Realtors, India (east zone) and Vice President of RECA Kolkata.
“If the construction work gets halted somehow, how would the homebuyers get their project delivered within due time maintained under RERA rules where this time they can’t even blame the developers for the delay? The recent speculation would further add to their troubles, where states have chosen to stand by the order of the Supreme Court on its banning on construction activities in the states unless any solid waste management policy has been settled. This move of the states would certainly take a dig on the shield of buyer protection ACT RERA and buyers will be highly in doubt about the actual functionality of the ACT,”- added Mr Somani.
Of course, sanitization is crucial; states should definitely come up with a proper policy of the same. Meanwhile, banning of construction works happens to be a dry run for the effectiveness of the RERA regime. Let’s see how the states RERA Authorities deal with the situation.

Online registration process has commenced for WBHIRA

Are you willing to buy flats in Kolkata? Or you are a suburb-lover when it comes to buying your own home?

‘Buying home’ symbolizes a sense of pride and security for every homebuyer. But while buying flats in Kolkata or in any other districts, in West Bengal especially these days, you need to be an extra alert.

A series of legal amendments have happened in the real estate sector of West Bengal in recent times and being a home-buyer or an investor you need to have a close track of the market updates when buying properties are on the cards.

We tell you, investing in a real estate project without having knowledge about the real estate act and the co-laterals, happening in and around the state can dent your savings. Shocked?

Skipping this article can make you lose a few lakhs. Can you afford?

Have a quick look at the updates first –

Amidst the central state squabble around state’s tweaking attitude with the name and the key facets of the central act Real Estate (Regulation and Development) Act, 2016 finally the portal of WBHIRA has set to go.

West Bengal Housing Industry Regulation Authority (WBHIRA) has at last launched its official RERA registration portal: www.hira.wb.gov.in; which means developers and real estate agents can no longer take homebuyers on a ride in name of project legitimacy and its deliverance. 

Abiding by the rules every on-going realty project, whether it is in the capital or suburb has to be registered with the state RERA authority.

The state act has categorized the registration process into 3 broad segments which are as follows –

  1. For real estate projects – One can register real estate projects as per Section-3 of West Bengal Housing Industry 2017, read with West Bengal Housing Industry Regulation Rules 2018.

  2. For real estate agents – An agent has to register him/herself as per Section 9 of West Bengal Housing Industry 2017, read with West Bengal Housing Industry Regulation Rules 2018.

Registrations for both projects and agents have already started and under the purview of RERA projects and agents without their respective registration numbers would be subject to desertion.

Now, this is indeed great news from the homebuyers’ standpoint; but the registration is somehow pinching real estate stakeholders a bit hard.

The registration fees that the government has prescribed are like these –

  • For an individual registration, it will cost a person Rs. 25,000.

  • Other than individual the registration fee is Rs. 2, 50, 000.

The charge for the registration is so far higher than that of the rest of the states and UTs where the Act is there in the picture.

“Real estate is one sector that has been the worst blamed for the counterfeiting activities by its stakeholders at large. Even it’s really late, but the state has started the registration process which will mandate the registration of the realty stakeholders and safeguard the rights of the homebuyers in amalgam. Again, the charge for the registration is pretty high for them which they will end up passing on to the homebuyers at the end,”- said Mr. Mahesh Somani, Chairman: National RERA Committee, National Association of Realtors (NAR), India and Vice President: Realtors & Estate Consultants’ Association of Kolkata, (RECA Kolkata).

However, the successful implementation of WBHIRA is still in question as the act has curbed two of the key provisions of the central Act on which the union government has not given a nod. By far, the central government repealed Section 92 of the Maharashtra Housing Act 2012 and the same has been followed by the Kerala government.

Now all the eyes are upon the central advisory council, (constituted under Section 42 of central RERA) how it fixes the applicability of HIRA/RERA in accordance with the consensus of both the governments.

What made real estate developers file writ petition against GST council? (An industry update)

A group of real estate developers of Maharashtra recently moved the Bombay High Court against the Goods and Services Tax (GST) Council, central, and the state government of Maharashtra of late.

As per the latest industry reports, the prime reason behind dragging the central, state government, and the GST council is the applicability of GST on mere transfer of land development rights by the owner to a realty developer.

To be more specific, real estate developers challenged a recent notification which made the transfer of development rights from the land owner to the developers taxable under the revised tax regime.

In a notification published in January 2018, GST council mandated that if any construction work falls under the Joint Development Agreement (JDA) category, wherein a landowner transfers the land to a developer and gets apartment, a certain amount of revenue or a combination of both in return; GST would be levied on both the land owner and the real estate developer.

“In the past, such transactions were exempt from the tax system. Now, that the revised tax regime has been already in force, any real estate transaction under JDA will come under GST ambit and it will seek tax payment from both of the consignees, where the entire land transaction has already been kept out of the GST purview; thus situation is a bit tricky here,”- said Mr. Mahesh Somani, Chairman – National RERA Committee, National Association of Realtors, India (NAR-India).

Starting from the advanced lawsuit, till the unified tax regime – nothing is going in favour of real estate developers. Tax experts consider that with this new notification of GST, it will add to the cost pressure on realty developers even bigger; as such transactions would get slower and complex credit generating process under GST. Again, for this taxability, the acquisition of land will turn to a complex process for the developers as it won’t be easy to settle the consideration with the land owners abiding the new rule.

On the other hand, the government claimed that in most of the cases, real estate developers give apartments to the land owners after the completion of the project which is nothing but consideration for the transfer of the project rights; therefore it shouldn’t be free from the GST purview.

However, the Bombay High Court issued notice to the Union Government of India, state of Maharashtra and GST Council and the next date of hearing is decided on July 9, 2018.

According to the industry experts, GST council has come to this conclusion, considering the rising trend of joint venture agreement between land owners and the developers as these ventures don’t fit in the outright land deal kind. While developers are game for JD ventures for their ease-of-investment business strategy, land owners are up for higher return on investment (ROI) prospect than just one time consideration.

Why it is the ideal time to invest in Mid-Budget Flats in Kolkata right now

Want to buy a home in your early thirties?
Are you looking for compact apartments in a metro city?

The industry experts suggest that investing in mid-budget flats in Kolkata can lead you to the throne. Research indicates that 80% of the young homebuyers consider property portals (esp video contents) while choosing an apartment. But there are other prime facts too which can return the maximum on your investment. One essential fact would be keeping yourself updated with the latest governmental announcements related to the residential realty segment. Keeping a close track on the institutional declarations is a pivotal fact to be considered while buying your home. If you miss out any, you could end up paying higher than the actual price.

Reportedly, the booking of mid-budget flats in Kolkata has increased over 20%-25% during the last fiscal. Want to know why?

Read on: In its recent announcement central government has allotted Credit Linked Subsidy System (CLSS) to the Middle-Income Group housing category coupled with an increased Floor Area Ratio (FAR).  It means middle-income group affordable housing (both MIG-I & MIG-II categories) are now eligible to claim the CLSS benefit provided by MIG-I category should have a carpet area of 160 sq meter or 1,722 sq ft and for MIG- II category it is 200 sq meter or 2,153 sq ft under the Pradhan Mantri Awas Yojana (PMAY-U) Urban. The CLSS for MIG scheme started gaining impetus in the last couple of quarters and the growth is indeed noticeable.

Since the affordable housing sector has turned out to be the newest sales outpouring source for the real estate sector in India, the Ministry of Housing & Urban Affairs (MHUPA) is absolutely leaving no stones unturned in order to give it a further boost.

It’s an open secret that the word ‘affordability’ varies from state-to-state based on several parameters such as- availability of land, socio-economic structure, cost of living, potential growth factors and lots more.
Buying flats in Kolkata meet all these said parameters successfully. And the best part is most of the top-level housing development of these days fit into the said CLSS beneficiary with ease.

Previously, there was an increment of carpet area for both MIG categories. It took the sales of affordable homes higher across the metros by 15%-17%.

Now under the revised rules, homebuyers with annual household income from Rs 6 lakh to Rs 12 lakh would be eligible for MIG I category, while MIG II for income needs to be above Rs 12 lakh up to Rs 18 lakh. Interest Subsidy for MIG I and II will be 4% and 3%, correspondingly for maximum loan tenure of 20 years.

The adequate home loan amount for interest subsidy will be Rs 9 lakh and 12 lakh for MIG I and MIG II category, in that order. Loan quantum above this limit will be at non-subsidized rates. In its recent release the ministry has declared that as on 11.06.2018, an amount of Rs.736.79 crore has been disbursed to 35,204 beneficiaries belonging to the MIG categories.

The range of the CLSS e was expanded to MIG category with the approval of the cabinet In February 2017. The scheme got its approval for implementation in the year 2017 has been stretched up to March 2019.

The recent home loan revision decision of Reserve Bank of India (RBI) foreshadowed the revised CLSS announcement by the housing ministry. As per the revised home loan structure of RBI, the housing loan limits for PSL eligibility from existing Rs 28 lakh to Rs 35 lakh in metropolitan centres (with population of 10 lakh and beyond), and from existing Rs 20 lakh to Rs 25 lakh in other centres, provided the by and large cost of the housing unit in the metropolitan centre and at other centres do not surpass Rs 45 lakh and Rs 30 lakh, respectively.

“Government’s decision to increase the carpet area further will expedite the construction part of affordable housing sector along with a close quality check. Since most of the mid-budget flats in Kolkata fall under the CLSS benefit scheme, the overall sales are expected to get a sizable augment in the coming years or so,”- says Mr. Mahesh Somani, Chairman- National RERA Committee, National Association of Realtors, India.

The increased construction activity in residential segment is about to reflect on the demand and supply chain of the core segments like- cement, steel, equipment and the other related segments. There will be a wider open horizon for the skilled and unskilled workers with the growing housing construction process across the urban areas of the country.

This is like a digging gold mine opportunity for the MIG flat buyers. People who have been in search of mid-budget flats in Kolkata, this should be the perfect time to plunge in.