With the real estate sector facing the problem of high inventory, low liquidity and high input cost, we look at some of the top issues that one hopes the interim budget will address, for a revival of the sector.

The Indian economy is expected to remain one of the fastest growing economies in the world. This is possible, only if India’s realty sector performs well, as it contributes a significant portion to the GDP. Hence, there are hopes that the government will address several challenges faced by the sector, in the interim budget 2019. Some of these pertain to taxes, funding and liquidity, rental housing and project approvals. Experts also maintain that while the affordable housing segment has been granted infrastructure status, it would help if this was extended to other segments of residential housing, as well.

While Section 18 of RERA Act clearly states that a homebuyer can seek refund and ought to be compensated for ‘undue’ delays in a project, experts said a withdrawal by a handful should not jeopardise completion of an entire project

On January 9, MahaRERA set aside the plea of over 10 flat buyers who had wanted to exit from a project in Mumbai, stating that bulk withdrawal from the project may mean ‘jeopardising completion of the project’ and impact the remaining 500 home buyers.

The 13-odd buyers had booked units worth Rs 7.5 crore each in the 65-storey Island City Centre project in Dadar constructed Bombay Realty, an arm of The Bombay Dyeing & Manufacturing Company, way back in 2012. They had alleged that the builder had made ‘false assurances regarding amenities and made changes to the carpet area and overall layout of the project’.

"Keeping in mind the larger interest of approximately 520 allottees of the said project, allowing bulk withdrawal from the MahaRERA registered project to so many complainants at this stage would mean jeopardising the project completion. Money for the refund will have to be taken out from the separate account, which is meant specially for the completion of the project and would eventually slow down the progress of the project work especially at a stage where the project is nearing completion with more than 800 of the super structure work completed," the order said.

In October last year, the Haryana Real Estate Regulatory Authority (HRERA) had directed Supertech to refund the amount taken from the buyers of a housing project for cheating the buyers by accepting pre-launch booking before obtaining licences and not handing over the possession of the units on time.

The HRERA bench had ordered that the funds received by the respondent from the complainant by way of advance be refunded along with interest at the rate 10.45 percent per annum as 'he has cheated/defrauded the innocent buyers'.

Interestingly, Chairman of Gurugram Haryana Real Estate Regulatory Authority (HARERA) KK Khandelwal had also made it clear at a later date that in projects where construction is 40 percent complete, refund may not be allowed to ensure that the project is completed.

The purpose of RERA is to balance the interests and protect the rights of the key stakeholders: builders, buyers and agents. "But our first priority is to ensure that home buyers get possession of their homes."

While homebuyers are of the view that they are not responsible for pledging their money with the developer 'indefinitely' and that they have every right to seek a refund if the project has been ‘unreasonably’ delayed, builders are of the opinion that refund should not be ‘allowed’ to a few buyers, especially if construction is on, as that would harm the interests of other buyers and make the project ‘unviable’.

Problems between the co-owners of a property, such as the divorce of a couple, have several ramifications on the ownership of the property. We examine the implications on home loans, the division of the property and ways to resolve the issue amicably.

Buying a home involves several legal and financial obligations. To distribute the burden of buying a home, people often opt for joint ownership, with relatives, especially the spouse. “The general view, is that it is a good idea to buy a home in co-ownership. However, each person can enjoy the tax benefits, only if they have separate and genuine sources of income. Also, if any legal dispute arises over the property, then, all the co-owners will be involved in the case. So, home buyers should evaluate all such possibilities, before making a final decision,” cautions Jeevan Kumar KC, head – investment advisory services at Geojit Financial Services. For a house which is under joint ownership between a husband and wife, problems may arise if the couple opt for a divorce. In such situations, it becomes necessary to determine who will get what portion and how the loan responsibility will be distributed.

The Bombay HC has ordered a temporary stoppage of work on a casting yard being constructed for the Bandra-Versova Sea Link project, following a PIL that alleged that the construction was being done without requisite permissions.

The Bombay High Court, on January 25, 2019, restrained the Maharashtra State Road Development Corporation (MSRDC) from carrying out any work relating to a casting yard, being constructed for the Bandra-Versova Sea Link project in Mumbai, for two weeks. A casting yard is a confined place where concrete structures like segments, parapets, girders, beams and boundary wall panels, are manufactured.

A bench of chief justice Naresh Patil and justice NM Jamdar, gave the direction while hearing a public interest litigation (PIL). The plea claimed that the MSRDC was constructing the casting yard on the Juhu Koliwada beach and in the process, was illegally reclaiming a portion of the beach. The petitioner, activist Zoru Bhatena, told the court that the state-run corporation was carrying on the construction without requisite permissions.

His counsel, advocate Gayatri Singh, told the bench that in the process, the MSRDC was dumping mud on the beach, thus, not only reclaiming the area but also restricting the sea water supply to the mangroves in the area.

Around 7.9 hectares of the beach area was being affected due to the casting yard work, the petitioner said.

The MSRDC, however, denied the allegations and said it had all the requisite permissions for the work.

The bench, however, directed the authorities to stop all work for two weeks and directed the Santacruz police station to ensure the court’s order was not violated.

The Centre on Tuesday moved the Supreme Court seeking its permission to return the 67-acre acquired land around the disputed Ram Janambhoomi Babri Masjid site to original owners.

In a fresh plea, the Centre said it had acquired 67 acres of land around the 2.77 acre disputed Ram Janambhoomi-Babri Masjid site.

The plea has said that the Ram Janambhoomi Nyas (a trust to promote construction of Ram Temple) had sought return of excess land acquired in 1991 to original owners.

Earlier, the apex court had ordered that the status quo be maintained with regard to the acquired 67 acre of land around the disputed site.

The central government in 1991 had acquired 67 acre land around the disputed site.

Fourteen appeals have been filed in the apex court against the 2010 Allahabad High Court judgement, delivered in four civil suits, that the 2.77-acre land be partitioned equally among three parties -- the Sunni Waqf Board, the Nirmohi Akhara and Ram Lalla.

The Supreme Court had on Sunday cancelled the hearing scheduled for Tuesday in the title dispute case due to non-availability of Justice S A Bobde, one of the five judges of the Constitution bench.

The Income-Tax Department has said that it has attached and confiscated properties worth more than Rs 6,900 crores so far, as part of its drive against benami properties.

The Income-Tax (I-T) Department has confiscated assets worth Rs 6,900 crores till now, as part of its action under the anti-benami transactions law, the agency said in a public advertisement on January 29, 2019. The message issued in leading dailies, said people who ‘abet and induce’ benami transactions, benamidar (in whose name the benami property is standing) and beneficiaries (who pay money consideration) are prosecutable and may face rigorous imprisonment of up to seven years, besides being liable to pay fine of up to 25 per cent of the fair market value of benami property.

“The Income-Tax Department has already attached and confiscated benami properties worth more than Rs 6,900 crores,” the message said. The message added that people who furnish false information to authorities under the law (Prohibition of Benami Property Transactions Act, 2016) are prosecutable and may be imprisoned up to five years, besides being liable to pay fine up to 10 per cent of the fair market value of the benami property.

“We urge every conscientious citizen to help the government in eradicating it,” the message added. “Do not enter into benami transactions. It’s illegal and punishable,” the message said and added that action under the new law will be in addition to the I-T Act, 1961.

According to estimates, the Amrapali group, which alone has to deliver 43,000 apartments, has vacant land and available floor space index for construction of about 10,000 new houses.

NEW DELHI: The Centre and the Uttar Pradesh government are looking to tap the unutilised land available with developers of delayed projects in Noida and Greater Noida, as well as setting up a dedicated fund to release stress and speed up delivery of nearly three lakh apartments.

The issue of setting up a stress fund for the sector was discussed at a meeting between Piyush Goyal, who is officiating as finance minister, and public sector banks on Monday where housing secretary D S Mishra was also present, sources told TOI. Though the corpus of the stress fund is yet to be worked out, the seed capital could be anywhere between Rs 1,000 crore and Rs 2,000 crore. The housing ministry, NBCC and banks have been asked to work out a plan that can be implemented quickly.

The other option is to use undeveloped land parcels with developers by transferring them to agencies such as NBCC, the construction PSU, which can leverage them to raise resources or develop them and finance the construction of flats, some of which were booked a decade ago.

The real estate industry has been through several transformations, over the past few decades. We look at how home automation could well usher in the next transformation and how it will impact home buyers and developers.

A few decades ago, a home seeker would have been content with any home that was available within his/her budget. It is also likely that this home seeker would have worked for years, to accumulate the funds for the house. Home buying then, was a luxury that very few could afford. The availability of home loans and defined EMIs, in the 1980s, augmented the growth of real estate in the country, especially in the metropolitan and tier-1 cities, as it brought home ownership within the reach of most tax-payers.

With increasing consumer demand and growth in the real estate sector, developers began experimenting, by offering value-added lifestyle amenities like swimming pools, club houses, gymnasiums, imported fittings, Italian marble floorings, video door phones and concierge services, to create stronger demand for their products. With time, such amenities soon became a standard part of their offerings and consumers expected these, as a part of their lifestyle quotient.

With the real estate sector facing the problem of high inventory, low liquidity and high input cost, we look at some of the top issues that one hopes the interim budget will address, for a revival of the sector.

The Indian economy is expected to remain one of the fastest growing economies in the world. This is possible, only if India’s realty sector performs well, as it contributes a significant portion to the GDP. Hence, there are hopes that the government will address several challenges faced by the sector, in the interim budget 2019. Some of these pertain to taxes, funding and liquidity, rental housing and project approvals. Experts also maintain that while the affordable housing segment has been granted infrastructure status, it would help if this was extended to other segments of residential housing, as well.

According to Niranjan Hiranandani, co-founder and MD of the Hiranandani Group, the government should focus on the following concerns, in the interim budget 2019:

1. “Incentives for rental housing, to meet the acute shortage.

2. A clear policy roadmap for the creation of rental housing stock and exemption from the burden of tax on notional rental income.

3. Rationalisation of GST in case of under-construction properties – the GST should be pegged at either eight per cent with an input tax credit or five per cent without the input tax credit.

4. Focus on financial re-engineering concepts, to overcome the NBFC crisis and the challenge caused by the IL&FS default.

5. Incentives for new asset classes in real estate, like affordable housing, warehousing and logistics, co-working spaces, co-living spaces and light industrial spaces.”

We look at the advantages of the design and build model of executing projects and whether it is likely to become a preferred route for corporates, for their office fit-outs.

‘Design and build’ is a globally popular corporate fit-out delivery method, where both, the design and execution, are entrusted to one single agency. The model has been in existence, as a preferred procurement route for projects of various sizes, in the western and middle-east countries for quite some time. In India, this model has taken time to become a preferred mode of delivering corporate fit-outs. As per an industry research, globally, 85 per cent of interior fit-out projects, with a value of less than USD 57,00,000 are procured through the design and build model.

What is a REIT (Real Estate Investment Trusts) and how to invest in one

Real estate investment trusts are intended to enable more people to invest in the Indian property market and boost funding in the sector. How does it work and why haven’t more people flocked to this investment avenue? We examine.

The Indian real estate sector has been lucrative for savvy investors over the last decade, but it has not been without accompanying uncertainties. The introduction of real estate investment trusts (REITs), will provide a platform that will allow all kinds of investors (even those with smaller budgets) to make safe and rewarding investments in the Indian property market.

With REITs, investors can start with as small a sum as Rs 2 lakhs, to secure units in exchange.

The REIT platform has already been approved by the Securities and Exchange Board of India (SEBI) and like mutual funds, it will pool the money from all investors across the country. The money collected from the REIT funds, will subsequently be invested in commercial properties to generate income.

A REIT will need to be registered via an initial public offering (IPO). REIT units will have to be listed with exchanges and consequently, traded as securities.