In a significant ruling, the National Consumer Disputes Redressal Commission has said that a property’s rental value cannot be a parameter for granting delayed compensation to the homebuyer as it constitutes just about 3-4 percent return on the price of the house and the 'paltry amount' would not compel the developer to complete construction within the agreed timeframe.

“Rentals, in my opinion, should not be made the sole basis for grant of such compensation. It has to be kept in mind that the rentals in our country being very low do not constitute even 3-4 percent return on the price of the house.

"If compensation in such cases is computed solely on the basis of the prevailing rentals, the builder would have no incentive to complete the construction within the agreed timeframe, since he would know that even if he diverts the funds collected from the flat buyers to another project or for other purposes and that leads to delay in completion of the construction he would be able to get away paying a paltry compensation which would cost him not more than 3-4% of the capital employed,” the NCDRC bench has ruled.

The court was hearing the matter between the company Springdale Core Consultants Pvt Ltd and Pioneer Urban Land and Infrastructure Ltd.

It also ruled that a real estate company cannot levy holding charges on a homebuyer as it does not suffer any loss on account of a buyer taking possession at a later date due to an ongoing court case.

“As far as holding charges are concerned, the developer having received the sale consideration has nothing to lose by holding possession of the allotted flat except that it would be required to maintain the apartment. Therefore, the holding charges will not be payable to the developer. Even in a case where the possession has been delayed on account of the allottee having not paid the entire sale consideration, the developer shall not be entitled to any holding charges though it would be entitled to interest for the period the payment is delayed,” it ruled.

It also said that even companies that have purchased properties in their own name for their directors and family can approach the consumer court for redressal but firms are not entitled to mental agony as is the case with individual buyers.

The court directed the builder Pioneer Urban Land and Infrastructure Ltd to deliver position of the flat “complete in all respects” to the company within eight weeks and compensation in the form of simple interest at the rate of 6 percent per annum to the complainant on the amount of Rs 4,81,51,038 with effect from March 5, 2016 till the date on which the possession was offered through a letter dated April 3, 2019.

It ruled that any balance amount to be paid by the buyer to the builder shall be adjusted out of the compensation payable to the buyer. The buyer would also be entitled to Rs 50,000 as cost of litigation.

“…the compensation for the delay in the delivery of the possession, where the complainant is a company should not be at par with the compensation granted to an individual since a company would not be entitled to compensation for the mental agony and harassment to which an individual would be entitled,” it ruled.

The compensation in the form of interest, which NCDRC awards, is an all-inclusive compensation and includes the compensation for the mental agony and harassment undergone by a buyer on account of the delay in delivery of the possession.

t had clarified that if a house or a residential plot is booked or purchased by a company for the residential use of its directors or employees, the company will be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, as far as such a booking or purchase is concerned.

Only if a house or a residential plot is bought or booked by a company as a part of its business activities and such purchase or booking has a close and direct nexus with the regular profit generating activities of the company, it will not be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, an earlier order by the consumer court had said.

On the back of rising demand from those above 60 years during the pandemic, Max India Ltd's arm Antara Senior Living is planning to invest over Rs 300 crore over the next four years for its existing and new lines of businesses that include residences for seniors, a chain of assisted living care homes and services.

These are expected to come up in Delhi-NCR, Mumbai, Pune, Hyderabad, Bengaluru and Chennai.

The company opened its first 30-bed Care Home in Gurugram on July 15. This will be followed shortly by another Care Home launch in South Delhi. Antara plans to set up a chain of 35-40 such care homes in the next three years that will operate with an asset-light model. Of these, around 10 are expected to specialise in Memory Care.

“The current launch is a part of Antara’s strategic shift towards becoming an integrated service provider for all senior care needs,” said Antara Senior Living MD & CEO Rajit Mehta.

“Our vision is to be able to come up with independent residences in the next five years covering three clusters - Delhi NCR, Mumbai/Pune and the south cluster (Bengaluru/Hyderabad/Chennai) and then build about 30 care homes in the three clusters and 10 memory care homes," he told Moneycontrol.

The total capital invested in all these services –residences for seniors, Care at Home and Care Homes and the medical care products will be about Rs 300 crore over the next three to four years, he added.

The Care Homes and Care at Home services will cater to seniors over the age of 55, who need more immersive interventions in their daily lives due to medical or age-related issues.

Antara’s Care Homes will include healthcare and monitoring services with round the clock nursing support from medically trained care professionals, daily doctor consults, vital monitoring, medication administration and emergency response protocol, regular physical activity, physiotherapy, and counselling sessions.

The second new line of business, Care at Home services will provide well-equipped, medically trained professionals who can offer seniors the care needed inside their own home’s comfort. The initial set of services under the Care at Home business include critical care, physiotherapy, rehabilitation, nursing, GDA, and diagnostics.

Antara will also provide Med Care Products such as respiratory aids, wheelchairs, walking sticks, and other consumables to help address the diverse needs of seniors and ensure quality stay for its residents.

The company already has an existing business line of residences for seniors.

The potential market size of Assisted Living Services in India is estimated at about $1 billion. The Indian consensus suggests the share of elders as a percentage of the total population in the country will have increased from around 7.5 percent in 2001 to almost 12.5 percent by 2026 and surpass 19.5 percent by 2050. Of the current 120 million senior population, 40 million have vision-related problems, 3.7 million have diabetes and 1.7 million have cardiovascular ailments.

Established in 2013, Antara Senior Living, a wholly-owned subsidiary of Max India, is being led by Tara Singh Vachani, who is the executive chairman.

The GST anti profiteering authority has found Ghaziabad-based Gaursons Realtech guilty of not passing on lower tax rate benefits worth Rs 19.72 crore to homebuyers. While upholding the profiteering amount, National Anti Profiteering Authority (NAA) also asked DGAP to investigate 33 other projects of Gaursons Realtech to check whether the benefits of lower taxes paid on raw material used in construction were passed on to flat buyers.

Based on the application that the realty company had resorted to profiteering when it sold flat in its '16th Park View' project on Yamuna Expressway (Greater Noida), the Directorate General of Anti Profiteering (DGAP) investigated the case.

The applicant had alleged that Gaursons Realtech had charged 12 per cent GST from him on the consideration paid by him before Goods and Services Tax was rolled out on July 1, 2017.

The applicant had alleged that he had paid the full amount for the flat on or before June 30,2017. However, the realty company raised the demand for payment of 12 per cent GST on the amount paid prior to the rollout of the new indirect tax regime and raised the cost of the flat from Rs 28.78 lakh to Rs 30.62 lakh.

The DGAP in its report found that the company has not passed on input tax credit (ITC) benefit to the tune of Rs 19,72,09,203 by not reducing the base price by 5.77 per cent in case of 2,349 homebuyers.

Gaursons Realtech has also claimed that it has passed on the benefit of Rs 28,22,65,749 to 908 home buyers.

National Anti Profiteering Authority (NAA) in its order said that Gaursons Realtech has benefitted from the additional ITC to the extent of 5.77 per cent of turnover during July 2017-March 2019 and has not passed on the benefit to the buyers.

"Thus, the profiteering amount is determined as Rs 19,72,09,203," NAA said.

The authority asked Gaursons Realtech to pass on the balance benefit of ITC of over Rs 1.04 crore in case of 908 flat buyers, which the company had not passed on already, along with 18 per cent interest.

It also directed the realty company to reduce the price to be realised from flat buyers and asked DGAP to investigate the amount of benefit, which needs to be passed on from April 1, 2019 till June 30,2020.

NAA asked DGAP to investigate 33 other projects of Gaursons Realtech to see whether the benefit of ITC was passed on to buyers in these projects.

Property buyers came out of hiding in Mumbai, India’s priciest real estate market, to boost the sagging fortunes of a segment crippled by the coronavirus lockdown.

A raft of transactions for commercial and residential properties were finalised in the Mumbai registration and stamp duty department after it reopened for business on May 18.  At least 1,642 documents such as agreements of sale, mortgages and tenancy as well as sale deeds valued at Rs 176 crore were registered in May and June, according to data shared by the stamp duty department of Mumbai.

Though many of these agreements were simply waiting to be signed after the registration and stamp duty department reopened, the pace of deals signals a recovery in the Mumbai real estate market.

Compare the May and June deals with the transactions before the lockdown. Up to 4,073 documents were registered and Rs 194 crore collected in March before the lockdown. In April, when the lockdown set in, there were zero registrations, an unprecedented event in Mumbai, India’s financial hub and India’s richest municipality.

Roughly 20 residential transactions registered in June were valued at more than Rs 10 crore, brokers in the know told Moneycontrol. Below are the notable deals:

1. Romesh Sobti, a former managing director of IndusBank, bought two sea-view apartments in Oberoi Realty’s uber luxury project in Mumbai’s Worli at Rs 38.15 crore. These properties were registered at Rs 4.60 crore each.

2. In June, a buyer bought a property in an Indiabulls project in Lower Parel for Rs 15.2 crore and registered it for Rs 76 lakh.

3. A unit in a project named The Residences by Runwal Developers in Malabar Hill was sold for Rs 25.47 crore and registered for Rs 1.27 crore in June, brokers privy to the registration details said.

4. A 3,261 sq ft property in Artesia project in Worli by K Raheja Corp was bought for Rs 19 crore and registered for Rs 95 lakh, according to brokers.

In housing, the number of registrations bounced back by 33 percent with 1,250 transactions in June. In value terms, these sales are worth roughly Rs 1,920 crore, said people familiar with the matter. The Mumbai registration and stamp duty department also amassed Rs 2,581 crore in 2019-2020 compared with the targeted Rs 2,630 crore for both commercial and residential properties.

The Union Cabinet on July 8 approved the affordable rental housing complexes (ARHCs) scheme for urban migrants employed in the industries, service sector and manufacturing sector close to their workplace in industrial as well as in non-formal urban sectors.

Considering that rental yields in India are anything between 1.5 percent and 3 percent, will this scheme attract private participation from real estate developers?

Also, will developers who own land parcels in municipal limits be keen to develop it for the affordable rental housing (ARH) scheme given the steep prices at which they may have bought the land earlier?

Real estate developers and experts are of the opinion that the scheme to be viable, it should provide risk linked returns using means such as transferable development rights, single window clearance and strong regulatory framework to attract private developers, especially those who are into affordable housing

The entire cost of construction/refurbishment would have to be provided at priority sector lending rates which essentially should be in single digits along with priority sector and infrastructure sector tax breaks.

Also, in the case of land parcels where the developer is offering his own land parcel for the scheme, the transferable development rights method could be adopted wherein the builder is given the option to load the TDR value for one land parcel onto another project that he is constructing to realise value.

ARHC approach

According to guidelines issued by the housing and urban development ministry, ARHCs will have a two-pronged approach. First, the existing vacant government funded housing complexes will be converted into ARHCs through concession agreements for 25 years.

The concessionaire will make the complexes livable by repair/retrofit and maintenance of rooms and filling up infrastructure gaps like water, sewer/septage, sanitation, roads. States/Union Territories will select concessionaire through transparent bidding. Complexes will revert to urban local bodies (ULB) after 25 years to restart next cycle like earlier or run on their own, the ministry said.

Second, special incentives like use permission, 50 percent additional FAR/FSI, concessional loan at priority sector lending rate, tax reliefs at par with affordable housing will be offered to private/public entities to develop ARHCs on their own available vacant land for 25 years.

Beneficiaries could be labour, urban poor such as street vendors, market or trade associations, industrial workers, manufacturing units, long term tourists, visitors, hospitality sector, students, educational or health institutions.

The progress in the country’s REIT framework, enhanced market data and sustainability initiatives has pushed India’s ranking to 34^th position in JLL and LaSalle’s biennial Global Real Estate Transparency Index (GRETI).

India's rank has improved by five notches from 39 to 34 since the last six years from 2014 until 2020.

India has also edged into the top 20 for Sustainability Transparency through the role of organisations like the Indian Green Building Council and Green Rating for Integrated Habitat Assessment, the report said.

The impact of key reforms and steady improvement in Indian real estate has enthused global investors. Institutional investments created a new benchmark of 5 billion dollars annually in last three years.

The government’s objective of providing ‘Housing for all’ by 2022 is being achieved through regulatory and fiscal incentives as well as providing tax benefits to sovereign wealth funds for investments in affordable housing.

Within the realty sector, key structural reforms such as the Real Estate Regulation and Development Act  2016 (RERA), GST, Benami Transaction Prohibition (Amendment) Act, 2016, Insolvency and Bankruptcy Code, digitization of land records have brought about greater transparency in what was an erstwhile largely unregulated sector a few years back.

The 2020 Index is launched at a time of massive economic and societal disruption where the need for transparent processes, accurate and timely data and high ethical standards are in closer focus.

The backdrop of COVID-19 is also ensuring that transparency within Asia Pacific’s real estate legal and regulatory systems is more important than ever to global investors as they look to deploy approximately $40 billion in dry powder capital into the region.

“India has seen a steady improvement in the Global Transparency Index over the years. In fact, along with Indonesia, Philippines and Vietnam, we are among the handful of countries that have seen the maximum improvement owing to positive governmental support and an enhanced ecosystem of transparency. In particular, the national REIT framework has been a major contributor to transparency in India, and with ongoing progress and governance, will continue to attract more interest from institutional investors,” said Ramesh Nair, CEO and Country Head (India) JLL.

Furthermore, innovative new property technology (proptech) is changing how real estate data is gathered and analyzed and influencing industry transparency at a regulatory level.

“While investment into commercial real estate has inevitably paused during the pandemic, the overarching trend toward rising allocations to this asset class will continue. As investors look to allocate more capital into Asia Pacific real estate, transparency becomes fundamentally more important, as will the enforcement of robust regulatory frameworks,” said Samantak Das, Chief Economist and Head – Research & REIS, India, JLL.

Real estate regulators will write within a week to the RBI, seeking one-time debt restructuring for the industry to help developers overcome the liquidity issues, Uttar Pradesh RERA Chairman Rajive Kumar recently said.

Industry bodies CREDAI and Naredco have been demanding one time restructuring of developers outstanding loans with financial institutions to prevent bad loans and making them eligible for fresh borrowings.

Addressing a webinar on Saturday, he said the decision to extend timelines for completion of projects by six months has been taken for the benefits of homebuyers and ensure customers get possessions of their flats.

Kumar asked developers not to impose any penalty on homebuyers for any default in payments of their installments during this coronavirus pandemic.

“One big issue faced by the industry is liquidity challenge for quite some time,” he said, adding that many stalled projects do not qualify for getting last mile funding from the Rs 25,000 crore special window created by the government.

All India Forum of Real Estate Regulatory Authorities (AIFORERA) has decided to take up the issue of one-time debt restructuring with the RBI, said Kumar, who is the Chairman of this new association.

He informed that the forum will write to the Reserve Bank of India in the coming week.

The UP-RERA chief was speaking at a webinar organised by property magazine Realty & More and public relation firm ICCPL on completion of three years of realty law RERA.

Kumar also warned builders to comply with the orders passed by the authorities, else it would be forced to take action as per the provisions under the law.

On hombuyers grievance that builders got relief from regulators and not them, the UP-RERA chief said the extension of timeline for projects completions would ensure that flat owners get keys of their dream home.

Quoting a survey done by Housing.com, Agarwala said that 81 per cent of respondents want to buy ready to move in flats or ones nearing completion , reflecting distrust in consumers mind towards builders.

Supertech Chairman R K Arora said a regulator was needed in the sector and the RERA law has helped in trust building.  Gulshan Homz Director Deepak Kapoor said the RERA has brought financial discipline in the development of real estate projects.

Gaurs group MD Manoj Gaur said the law has brought credibility in the sector and developers feel proud in saying that their projects are registered under this law.

He, however, suggested that the government’s development authorities and financial institutions should be brought under the ambit of RERA to make everyone accountable.

Bhutani group CEO Ashish Bhutani said the RERA has brought transparency in the real estate sector and the developers do not have to make extra efforts to market products to prospective buyers, especially NRIs.

The Consumer Disputes Redressal Commission (NCDRC) has ruled that if a homebuyer decides not to take possession of an apartment, the builder can at best retain the earnest money but will have to refund the rest of the amount paid by the buyer.

It also said that a one-year delay in completion of a housing project is ‘reasonable’ and a buyer cannot seek refund on that ground.

The NCDRC bench of Justice V K Jain was hearing a matter that concerned two senior citizens who had booked a flat for their son with Emaar MGF Land Limited worth Rs 1.68 crore and paid Rs 10 lakh at the time of booking it in 2013. They paid the builder an amount of over Rs 1 crore by taking a loan from HDFC but asked for a refund after the builder offered possession after a delay of 14 months in 2018.

A provisional allotment letter dated February 27, 2013 was issued to the buyers followed by execution of agreement on April 15, 2013. As per the agreement the possession was to be delivered within 42 months from the start of construction and grace period of three months was also available to the builder. The payment was to be made in installments linked with the progress of the construction.

Homebuyers had alleged that the terms of the buyers agreement were wholly one sided and they had taken a loan of Rs 1 crore from HDFC Bank for making payment to the builder for which tripartite agreement was also executed on March 30, 2015.

“The complainants paid an initial amount of Rs. 10 lacs to the builder for booking a residential flat allotted to them. The said amount being the initial deposit made by them would constitute earnest money despite definition to the contrary given in the buyer agreement executed between the parties. The builder, in my opinion, should deduct only a sum of Rs 10 lakh out of the total amount received by it in the complainants either directly or through OP number 2 and the balance amount be refunded along with interest with effect from 25.06.2017,” the bench ruled.

The complainants have taken substantial loans from HDFC Bank. The amount with the complainants had raised by way of loan from HDFC Bank should be refunded by the builder along with same interest which the complainants had paid to the said bank, the NCDRC order said.

The interest on the balance amount if any contributed by the complainants, considering all the facts and circumstances of the case should carry interest at the rate of 10 per cent per annum, the order said.

The homebuyers had said in their complaint that they were not interested in taking possession of the flat and had approached the consumer court to seek a refund of the amount paid by them to the builder along with interest and compensation. The flat was booked by them for their son, who seeing the failure of the builder to complete the timely construction, had left for overseas and they therefore did not require the flat any more.

The builder had responded saying that possession had been offered to the buyers even before the institution of the consumer complaint and that the complainants had defaulted in taking possession by paying the balance amount due from them.

The counsel appearing for the builder had submitted that the flat allotted to the complainants is still available with them and its possession can be given to the complainants on payment of the balance amount due from them. The builder also said that the occupancy certificate was obtained by him before offering possession to the buyers.

The developer said that it was ready and willing to give possession on payment of the balance dues.

“The ground taken by the complainants for refusing to take possession of the flat does not seem to be justified, considering that the possession as per the agreement could be delivered by 11.08.2017, whereas the complainant number 3, according to the complainants number 1 and 2, left India way back in the year 2014. Therefore, the ground given by them for refusing to take possession does not seem to be justified,” the consumer court ruled.

Real estate developers in West Bengal are witnessing a gradual recovery in sales after the lockdown restrictions were eased, and an association of the builders has launched a digital campaign to attract buyers, industry sources said on Tuesday.

The developers claimed that around 2,000 inventory units, which remained unsold, have been purchased by individuals, and there will be a 10-15 per cent jump in prices for new ones.

“There is a gradual sales recovery since the unlocking of the country,” said an official of the realtors’ apex body Credai.

The industry saw an uptick in sales in the housing segment.

“After a tough three months, we are seeing sales recovery in the residential segment. Though we are yet to reach pre-Covid levels in real estate sales, we have got indications that the market is stabilising,” the association’s Bengal chapter president Nandu Belani said.

The real estate industry in West Bengal has been hit severely due to the coronavirus outbreak and developers have sold units “either at a loss or with no margins in most of the projects”, Credai West Bengal president Sushil Mohta said.

“The introduction of only 17 projects during the April -June period this year as against 46 launched during the corresponding period in 2019 bears testimony to this trend.

This will continue till September 2020,” he said.

Real estate consulting firm Anarock said residential launches declined by 56 per cent and sales were down by 49 per cent in seven cities of the country during the first half of 2020.

All-India housing prices index rose by 3.9 percent during the fourth quarter of 2019-20 compared to the year ago period, but contracted 0.2 percent compared to the previous quarter, the RBI said on Tuesday.

The Reserve Bank of India (RBI) released its quarterly house price index (HPI) for the fourth quarter of 2019-20. The HPI is calculated on base year 2010-11.

The index is based on transaction level data received from housing registration authorities in ten major cities (viz., Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow and Mumbai).

"The all-India HPI contracted by (-) 0.2 percent on a sequential basis (q-o-q), largely due to decline in the house prices in Delhi, Bengaluru, Ahmedabad and Jaipur; Mumbai recorded the highest sequential rise," the statement said.

However, on an annual basis (YoY), the all-India HPI increased by 3.9 percent in the fourth quarter of 2019-20. The index had risen by 3 percent in the previous quarter and 3.6 percent In Jan-March 2019.

The HPI varied widely across cities and ranged from 22.6 percent (in Jaipur) to (-) 13.8 percent (in Kochi), the statement said.