Real Estate Regulator Bill gets stronger

Real Estate Regulator Bill gets stronger

The Real Estate Regulator bill ,which was pending in the Upper House (Rajya Sabha) received a boost on Wednesday 9th December 2015 when the Select Committee of Rajya Sabha recommended strengthening its key provisions based on the feedback received from the general population of the country.The 20 recommendations were approved by the Union Cabinet.

These are the changes accommodated in the revised bill…

  • Projects constructed on 500 sq mtrs plot area or with a minimum of 8 flats will also have to be registered with the Real Estate Regulator.Earlier this limit was for projects on 1000 sq mtrs and above.
    With this change,almost all builders and projects will be under the scanner.
  • The Regulatory Authority will now have only 3 months to frame the rules of this law and States will get a max of 6 months to frame the laws after the notification of this Act.Earlier this limit was 1 year.
  • Flat buyers will now be required to take possession within 2 months of the project receiving Occupancy Certificate.
  • All cases and appeals will have to be decided within 60 days instead of 90 days.
  • The Bill also provides an option to set up adjudicating officers and Appellate Tribunal for fast-track dispute resolution.
  • Builders will now have to pay equal rate of interest in case of default or delays as home buyers.
  • The liability of builders for structural defects that has been increased from the earlier two to five years now.
  • Real estate developers will now have to deposit 70% of the project cost in a separate escrow account, from 50% proposed earlier.
  • The revised bill also includes an enabling provision for arranging insurance of land title, which will protect buyers and developers from frauds.
  • Promoters of the project are now barred from changing plans and designs without the consent of the consumer.

However,strangely,the bill has not addressed the bottlenecks and delays created by govt officers in the Town Planning dept who often delay projects unless they are paid their pound of flesh.

The Final proof will be in the pudding and will depend on how efficiently and quickly all these provisions are implemented.

The final effect of this bill will take at-least another year to take effect.

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Home loan survey results

Recently,BNP Paribas conducted a survey of the home loan Market in India.

Interest Rates

Home loan interest rates,India

The conclusions were as follows:

  1. Interest Rate Range:9.95% to 13.75%
  2. Rates offered by banks:9.95% to 11.75%
  3. Rates offered by NBFC (Non banking finance companies):10.75% to 13.75%
  4. Stronges Brand/Trust value:HDFC,SBI and LIC housing finance
  5. Most preferred among banks:ICICI,Axis,SBI.
  6. Most preferred among others:HDFC,LIC.
  7. Best due diligence:HDFC
  8. Best in efficency:HDFC (Less than 6 days to process)
  9. Rate difference between finance firms and banks:20 basis points.
  10. Who gives max commission to agents:MNC banks (1%) followed by NBFC’s and Banks.
  11. Who sells the max home loans:Agents account for 50% of loans being sold.Direct sales and cross selling teams sell the rest. 

Impact of budget 2013 on real estate sector in India

The Union budget of 2013 presented by Chidambaram has had the opposite effect on real estate industry.Already facing a severe slowdown,the finance minister has made life even more difficult for the real estate industry.

The following are the main points of the budget with respect to the real estate trade.

  1. 1% TDS (tax deducted at source) on all real estate transactions over Rs.50 lakhs
  2. Service tax raised to 3.7% against the earlier 3.09% if the house is worth more than 1 crore or the area is over 2000 sq ft.
  3. Excise duty on marble increased from Rs 30 per sq ft to Rs 60 per sq ft.
  4. No ‘infrastructure’ status to real estate sector.This would have enabled real estate companies/builders to get sops like cheap loans etc from the govt and banks.
  5. The only ‘benefit’ that the budget has for a buyer is an additional 1 lakh rupee deduction for interest payment on a first time housing loan.But the catch is that the loan amount has to be less than 25 lakhs.
    So basically,it means nothing.

So all said and done,the going is only going to get tougher for the housing industry post the 2013 budget.

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Competition commission probing 5 real estate companies

English: Logo of DLF.

DLF logo

5 real estate companies-DLF,JP associates,Larsen and Toubro,Tulip infratech and Omaxe are the subject of an investigation by the Competition commission of India for alleged anti-competitive practices.Over 23 cases have been registered against these companies.15 cases against DLF have already been concluded and the company has been fined over Rs.650 crores.
Flat purchasers can approach the CCI if they have been forced to sign one sided agreements favoring the builder,as is the case in most real estate deals these days.
The Competition Act has also been amended to give the CCI to whet all M&A (merger and acquisition) deals and search and seizure raids henceforth.

Stamp duty refund rules

Stamp duty refund rules

Binded Document

Document (Photo credit: Sean MacEntee)

Stamp duty refund rules (this only covers stamp duty not registration charges)

Courtesy:DNA newspaper 12.May.1012

Refund of stamp duty is granted on
(i) spoiled paper
(ii) blank document
(iii) document executed but afterwards found to be unfit due to some reason and
(iv) in some cases of documents executed and registered

Spoiled Paper
In case of spoiled paper or blank document whether franked or on stamp paper, refund should be claimed within six months from the date of purchase of stamp paper or franked Document.
Executed Document (printed and signed document):
In case of document executed but afterwards found to be unfit due to some valid reason, refund should be claimed within six months from the date of purchase of stamp paper or franked Document.
Executed and Registered Documents:
In case of documents which are executed and registered but for some reason physical possession of property mentioned in the Document has not been handed over to the purchaser then in that case refund should be claimed within two years from the date of document.

Procedure to claim refund:
An application for refund on a standard format should be submitted at the concerned Collector of Stamps office, along with the original document and an acknowledgement should be obtained. Subsequently one must follow up with the officer concerned for early disposal of the case. Standard format of refund application along with checklist/formats of other papers/affidavits/power of attorney required with application is available at concerned collector of stamps office.

Refund is granted strictly as per the provisions of section 47 to 52A of The Bombay Stamp Act, 1958 and relevant rules and notification. Hence one is requested to thoroughly check about provisions, rules and notifications and treat above information only as a general guideline.

Collector of Stamps are very strict in regards to refund and a mistake in any of the refund application paper will lead to rejection of refund hence proper legal help should be availed if one is not very clear about the provisions of law.

These guidelines are for claiming stamp duty only.Registration charges are not covered here.Registration charges can also refunded.Please check the rules regarding the same.

For any further clarification,please contact…
Sky properties
9833802522

How to fight an errant builder

From:The economic times.

Home construction is a service under the Consumer Protection Act, hence it falls under the jurisdiction of consumer courts. Besides taking all possible precautions before purchase, purchasers should be vigilant even after paying the entire sales amount to the builder. They should not get complacent and think that the builder will deliver a defect-free property.

As for the builder, he will be held responsible for all defects in the building, and for delays in handing over possession. Consumer Courts and the Apex Court have awarded damages whenever they have found defects in the home. Let us study a few cases where the courts have awarded damages and held builders liable for their negligence.

In Ms. Ruchita D Mirchandani vs. Godrej Properties and Investment Ltd., the purchaser entered into an agreement with the builder for the purchase of a flat. But due to family problems, the purchaser sought to terminate the agreement. The builder informed that the purchaser had no right to terminate the contract.

The builder contended that he alone was entitled to exercise the option of terminating the contract. Hence, he said, if the purchaser did not pay the balance amount, she would have to forego the amount deposited by her.

The State Commission in its order observed that the right to terminate the contract should be made available to the purchaser too. In its absence it is unfair on the builder’s part to retain the amount paid by the purchaser. It amounts to “unfair trade practice” and also “deficiency in service” under provisions of the Consumer Protection Act.

Similarly in the M.P. Housing Development Board versus Virendra Kr. Garg case, the Apex Court observed that public authorities like Housing Boards do not deserve any sympathy. It said that in case of defective service the Board should pay compensation and also make good the loss to the purchaser.

In this case the MP Housing Development Board sold a defective flat to a purchaser. The Board failed to repair the flat even after the architect confirmed the defects. It was also found that the defects were serious and could lead to the collapse of the building. After examining the relevant file, the District Forum directed the payment of damages worth Rs. 50,000, and cost of Rs. 1,000. It also ordered a departmental inquiry for punishing the officials who had failed to discharge their duties.

The State Commission, after noticing the condition of the flat, directed the refund of the deposit amount with 18 per cent interest. It also enhanced the compensation amount to Rs 60, 000, and costs to Rs 5000.

The National Commission set aside the order pertaining to the compensation but awarded interest @18 per cent from the date of deposit.

The Apex Court in its order observed that the authority does not deserve any sympathy, and directed the allottee to keep the flat if he so desired, and use the compensation of Rs 60,000 to get it repaired. If not, the Court directed, the Authority should refund the deposit amount from the date of deposit @ 18 per cent interest.

In the Haryana Urban Development Authority (HUDA) versus Sitaram case, the purchaser applied for a flat to HUDA in 1982 and paid all dues to the authority. But possession was given to him in 2000. The District Forum awarded interest on the amount deposited by him at the rate of 15 per cent after the expiry of two years from the date of deposit.

The State Commission confirmed the said order. The National Commission increased the rate of interest from 15 to 18 per cent. The matter reached the Apex Court and the Hon’ble Court observed that the National Commission has awarded interest on the higher side. It also confirmed the District Forum’s order.

The courts have also held consumers liable if there is any delay on their side. In Hari Govinda Sharma vs. Punjab Urban Planning and Development Authority, the complainant deposited registration fee under a scheme for MIG house on hire purchase after seeing an advertisement issued by the Punjab Urban Planning and Development Authority.

The authority allotted a house to the complainant under a different scheme and demanded the balance money. The complainant contested, and took time to reply. As a result the liability swelled with the addition of interest and penal interest. The NCDRC observed that the complainant was duty bound to pay the said penalty.

The above decisions clearly show that consumers should bring defects to the notice of the authorities concerned immediately after it is detected. Consumers/ purchasers should keep all the relevant documents and other correspondence so that they are able to prove their case. Remember the maxim that the law protects only those who are vigilant.

http://articles.economictimes.indiatimes.com/2005-05-23/news/27485689_1_builder-defects-deposit-amount

 

  • Builder fined for cheating flat buyer(navimumbairealestate.org)

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