Delhi govt allows property transaction through GPA

Delhi government on July 22 lifted the ban on registration of property transactions involving general power of attorney (GPA) which is expected to provide relief to lakhs of residents living in group housing societies and unauthorized colonies.

The Revenue Department issued a circular allowing registration of all GPA-based property transactions in the city with immediate effect.

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How to buy a flat and not lose sleep

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Most middle class people in the country dream of owning a house. Also, investing money in real estate is always rewarding. But since the government is yet to prepare an ownership registry of all the properties in the country, in many cases, the title of a property is not clear. Besides, as there is no clear land acquisition policy, a real estate project can run into trouble and the dream sour quickly. Besides, multiple agencies are required to give approvals before a project can take off and be completed. Unless buyers are diligent and ensure that the property they are purchasing has no encumbrances, they can easily land in trouble.
In order to help homebuyers take the necessary precautions before entering into a deal to buy a house, TOI is taking you through the various approvals and measures that a buyer should look for.
CHECKING CREDENTIALS
Shweta Jain, executive director of Cushman and Wakefield, says that quite often projects face hurdles in obtaining legal approvals from all the authorities. This not only leads to delay in implementation, but also, sometimes, can force the developer to scrap the project which can cause a huge loss to the buyer.
Before finding out whether a builder has secured all the approvals to start construction, you must check the ownership of the land on which the project is to be developed. For this, you can ask the developer to show the allotment letter of the land, if it has been purchased from a government agency.
If the land has been acquired from farmers, check the title paper which mentions the owner. This will also help you determine whether the title of the property is clear or not. The next step should be to find out whether the developer has secured all the approvals or not.
The major set of approvals that must be obtained by a builder are building plans and floor plans, structural safety certificates, no-objection certificates from the civic authorities, environment clearances, urban land ceiling certificates, commencement certificates and title deed. They will also have to secure an NOC from the water authority to use water for construction.
WRITTEN AGREEMENT
You must insist on a written agreement with the developer. It should clearly mention the specifications of the apartment and all the terms and conditions, including payment plan, time of delivery and quantum of penalty if any party defaults — construction deadline in the case of the developer and payment schedule in case of the buyer. This will also take care of hidden costs, if any.
If one is buying a house in a completed project, the buyer should physically check the occupation certificate, fire safety equipment and mechanism, water and electricity connections and property tax receipts for the project.
This is very important as the country does not yet have a real estate regulator and well-laid-out guidelines for the sector.
The occupation certificate from a government authority, in particular, is very important. It signifies that the building is complete and fit for living; and, that, it has not only got all the approvals in place but also that it has adhered to all the norms and building bylaws.
In NCR, purchasing a property is even more risky if one does it through power of attorney – in this, the title of the property remains with the original allottee but the rights to its use and all other benefits vest with the last buyer, who can also transfer the property rights to a new buyer. Even the share certificate of a property in a society continues in the name of the original allottee.
In this situation, it is difficult to find out who is the last owner. This leads to fraud many a times, and a person who is in possession of the property can claim to be the owner of the property with false documents and even sell it off. This is one reason why banks refuse to give a loan to a buyer who is buying a property from a person who owns it through power of attorney. Therefore, it is advisable to buy freehold property from the legal owner alone and get it registered in your name.
USING BANK FOR CHECKING
If you are planning to buy a flat, the best course of action is to buy it through a bank loan. A senior official of HDFC Ltd says that since the bank accepts the apartment – which is yet to be constructed in a new project – as collateral when they give a home loan, they do all the checks, including that of the credentials of the builder, to ensure that the market value of the collateral does not diminish.
So, even if you have adequate money, take a small loan from a bank so that it too is involved in the whole process. Later, if you want, you can prepay the loan as this does not attract any penalty.

IT PAYS TO BE CAUTIOUS 
When buying a property, no amount of scrutiny is enough. It always pays to be cautious. We tell you how to figure out the value and track record of a developer and get the best deal when you have made your choice.
Background check of the developer: This will help assess the execution capability of the developer on timeliness and quality. It will also help to compare the project with that of the developers’ competitors. The financial soundness of the builder should also be studied as it will indicate his capability to execute and complete the project in absence of external borrowings. The developer should have a traceable track record which is a good reference point for new launches and under-construction projects. The number of projects delivered by the builder and the time taken for delivery should be considered. It is also important to be aware of the developers’involvement in any legal feud in the past so one can judiciously make the buying decision.
Fundability of the project and financial institution affiliations: If the flat has to be mortgaged, it is always helpful to identify lenders and financiers for the project. This ensures authenticity of the titles and approvals as these would have been investigated with greater diligence.

Specifications: The buyer should monitor structural and finishing specifications which are spelt out when the project is launched and marketed. However, one should supervise the progress through frequent visits to the site and ensure the specifications, as shown in the sample flats, are adhered to. In case of any difference, one can write a formal complaint to the developer and also approach the consumer court.
Price of the apartment: The total price of the apartment is a factor of the basic selling price (BSP) and the cost incurred for external and internal development, power back-up, preferential location charges, club membership, maintenance and parking. The costs that are not generally accounted for by the buyer are stamp duty and registration charges and maintenance cost per square foot. Most builders may also take the society maintenance charges for up to two years in advance. Typically, the developer markets the projects on BSP and mentions additional costs separately. In certain projects, pricing may vary depending on the amenities and specifications. Brokers may offer discounts and pay back commissions to the buyer. The buyer should compare the prevailing rates and values with those of similar projects in the area or comparable locations.
Mode of payment: Although there are a number of payment modes offered by developers for under-construction or newly-launched projects, most prevalent are down payment, constructionlinked and flexi-payment plans. Down payment plan requires the buyer to pay around 10-15% of the cost as booking amount, around 80-90% within 45-60 days of booking and the remaining at the time of possession. This plan is the most economical as the developer offers huge discounts but the risks are higher if there is delay in completion. The construction-linked plan has a relatively lower risk although it may the most expensive. In this plan, the buyer pays 10% of the total cost of the apartment or a specific amount for booking and the rest is paid at various construction milestones. The flexi plan is a combination of the earlier two plans whereby one is required to pay around 30-40% at the time of booking and a similar amount is pegged to construction milestones with the rest to be paid at the time of possession.
BUYER-SELLER AGREEMENT
This agreement has all the clauses, terms, conditions and legal implications for the buyer and developer should there be a default on either side. Important points are interest, penalty and default charges for a buyer and clauses of refund of payment in case the project is not completed or is scrapped. Also, the penalty in case of structural defects and delay in construction should be included. The agreement should also include a clause to transfer the undivided and common land to the society and owners which will ensure no further development or construction by the developer after the project is completed and handed over. The agreement should be registered.
AREA OF FLAT
The buyer should check the area of the apartment as usually the area marketed and sold is the super built-up area which is then used to work out the cost of the apartment. The developer charges for the built-up area, which includes the area enclosed by the walls and the area occupied by the walls, while the actual usable area is the carpet area which is the area within the walls
DESIGN AND LAYOUT
Buyer should fi nd out about contractor, architect and structural engineer in order to assess quality of work as this is critical if flat is for own use. Cross-ventilation and ample sunlight should be

CHECKLIST 
Check with people living in a developer’s earlier projects about the quality of work
Prefer projects which are about to be completed
Check project’s legality—land title, status of layout plan and other NOCs
Check difference between super area and carpet area of fl at
In the name of super area, developer adds proportionate area of common facilities to each flat. This ‘load’ can range from 15% to 45%
Go for construction-linked plan because you have to pay according to the pace of construction
For loan, avoid banks suggested by developer
Seek service of bank lawyer who can provide you the valuation and legal status of property for a nominal fee, usually Rs 3,500-4,000.

DOCUMENTS 
For Delhi
Perpetual lease deed | Conveyance deed | Sale deed in case of resale properties | Mutation paid | Last paid house tax receipt | Last paid electricity and water bills | Completion certifi cate | Sanctioned plans
For Noida/Greater Noida
Allotment letter from Noida Authority (in case of a plot or flat built by authority) | Registered perpetual lease deed | Proof of payment of lease rental, one-time or yearly | Transfer memorandum and registered transfer deed in case of resale property | NOC from Jal Department | Share certificate and NOC from society (where applicable as some old sectors or group housings have been allotted to societies) | Completion certificate for houses with sanctioned building plans | Mutation letter in name of current owner
For Gurgaon
Allotment letter/builder-buyer agreement in case of DLF or HUDA properties | Registered sale deed in name of current owner with all originals from previous owners | Sanctioned building plans and completion certifi cate in case of independent houses | Mutation letter from DLF or HUDA | Proof of up-to-date payments of power and water and house tax charges | NOC from RWA or maintenance offi ce in case of group housing

TITLES AND DOCUMENTATION 
The risk of clear titles and documentation is significantly less if the property is purchased from the urban development authorities. However, if the flat is to be purchased from a private developer or colonizer, one should seek legal assistance to check documents related to land ownership, licences and approvals, allotment letter, sanctioned plans etc.

CERTIFICATES 
CERTIFICATE FROM SOCIETY | One should check the share certificate issued by a society. This establishes the identity of the seller. The share needs to be transferred in your name as the purchaser. This certificate forms a part of your ownership deed. NOC FROM SOCIETY | Check NOC issued by the society in case of a resale. This NOC states there are no dues payable by the seller to the society and that the seller has complied with the conditions laid down by the society.
OWNERSHIP TITLES FOR GROUP HOUSING COOPERATIVES | It is essential to have the shares or the ownership documents allotted or transferred to ascertain the legal rights.

TITLE PAPERS 
If you are buying the property directly from a builder, you should check the title papers showing who the owner is. This will tell you whether the title is clear or the property is under litigation, whether the land is freehold or leasehold, whether the seller has the authority to develop and sell the property, and if the property is free of encumbrances. A clear title can be ensured when there’s a conveyance deed in favour of the seller. CHECKING BY BANK | For those availing a loan, the bank normally appoints its own lawyer to check the title deeds. Or, you hire a lawyer and ask for originals, don’t accept photocopies.

MUNICIPAL CLEARANCES 
Another important document is the completion certificate issued by the municipal authorities. It shows whether a building complies with the rules in respect of height and distance from road, besides other things, and whether it is built according to the approved plan. You should also check the occupation certificate. It certifies that water, sewage and electrical connections are in place.

PURCHASE AGREEMENT 
Another document that needs to be checked is the purchase agreement between the developer and the authority or the agency from which the developer has bought the land. It ensures the seller (developer) is entitled to sell the property, states if there is a mortgage on the property, and shows if the mortgage money has been paid off.DEVELOPMENT AGREEMENT | If the property has been developed jointly by the owner and a builder, scrutinize the joint development agreement, which mentions the terms of development of the property.

LIST OF APPROVALS 
Often a project faces delays in getting legal approvals from a number of authorities. Noncompliance may result in scrapping of the project and reduction in market value. The approvals to be obtained are building plans and floor plan approvals, structural safety certificate, no-objection certificate from the civic authority, environment clearances, urban land ceiling certificate, commencement certificate and title deed. Upon possession, the buyer should physically check the occupation certificate, fire safety equipment and mechanisms, water and electricity connections and property tax receipts.

Unitech arm UCP plans to sell IT SEZ for Rs 2,800cr

 Unitech Corporate Parks (UCP), a Unitech group firm listed in London, plans to sell its IT special economic zone (SEZ) in Gurgaon comprising around 3.5 million sq ft of office space for about Rs 2,800 crore.

UCP — listed on the London’s Alternative Investment Market (AIM) and formed to invest in commercial real estate in India — has 60% stake in the Gurgaon SEZ. Unitech has the remaining stake in the SEZ.

According to sources, UCP is looking to sell the Gurgaon SEZ and has given the mandate to property consultant Jones Lang LaSalle (JLL) India to find out potential buyers. JLL India has started the process to sell this asset by initiating informal discussions with probable buyers, sources said, adding that formal bids could be called by the end of this month. The valuation of the deal is expected to be around Rs 2,800 crore, sources said.

A Unitech spokesperson declined to comment. Unitech is expected to garner Rs 1,100-1 ,200 crore from the deal, which will be used to retire debt and fund construction of projects, sources said. They added the SEZ is expected to be completed by the year-end and 75% of the area has already been leased.

UCP raised about 360 million pounds by issuing and placing its ordinary shares on the AIM of the London Stock Exchange in December, 2006. It had invested in six commercial projects in India in partnership with Unitech, of which five are in the National Capital Region and one in Kolkata. UCP has 60% stake in these properties, while Unitech has 40%. That apart, Unitech holds 12-13 % stake in UCP.

“The board is working actively on all future options for the company and ways to monetize the assets as they progress ,” UCP had said in its half yearly report in December, 2012. “We continue to believe that the maximum value for shareholders will be achieved by creating investments which are substantially physically complete and well let, and so our strategy continues to be to progress the projects as quickly as tenant demand permits,” it had said.

Now, pay TDS on property over Rs 50 lakh

Now, you will now have to deduct tax when you make the payment to the seller if the cost of the immovable property exceeds Rs 50 lakh. The Central Board of Direct Taxes has notified the new provision of tax deducted at source, or TDS, on immovable property. 

The Finance Act 2013 had provided that purchaser of an immovable property (other than agricultural land) worth over Rs 50 lakh is required to pay withholding tax at the rate of 1% from the consideration payable to a resident transferor. 

The rate at which tax is to be cut is 1%, but it would go up to as high as 20% if the seller does not disclose his permanent account number. The provision will apply even when the property has been financed through a bank loan. 

Buyer will have to ensure either he himself or the bank deducts tax before disbursing the loan to the seller. The provision will apply in cases where buyer bought an under construction property prior to the provision coming into effect but has to make the balance payment after June One. 

The tax deducted is to be paid electronically on the Income-tax Department’s website by filling a form online. If a person does not have the facility to pay tax online, he can take the printout of the duly filled form and make payment on any authorised branch. The income tax authorities have done away with the mandatory requirement of Tax deduction and account number for buyers. The buyer will be able to generate the TDS certificate from I-T department’s website and provide it to the seller. The seller would also be able to see the TDS credit in 26AS statement.

Sebi likely to rework REIT rules to lure in FIIs, HNIs

The Securities & Exchange Board of India may amend the dormant guidelines governing real estate investment trusts to lure international investors into investing in them as various arms of the government scramble to defend the sliding rupee.

A new set of rules may soon be announced by the regulator which would make it easy for wealthy Indians and international investors to buy into these trusts that provide regular income like bonds or bank deposits, said two people familiar with the development.

The new format for the so called REIT will keep away retail investors as such investments with liberal guidelines may not be appropriate for those with less risk appetite.

“We are working on a new set of guidelines that will be attractive to FIIs,” said a person at the market regulator who did not want to be identified. But it will be out of bounds for retail investors since the relaxed guidelines will be a risky proposition for them, he said.

Indian regulators are looking to re-draft the Real Estate Investment Trust, or REIT, guidelines to draw foreign investment to shore up the rupee. The initial guidelines announced in 2006 were so onerous that not a single trust was founded. One of the conditions was that the trusts have to declare the net asset value on a daily basis, a requirement quite impossible in thereal estate market where similar properties do not trade on a daily basis.

REITs are a pool of funds raised by issuing a tradable security like a share or a debenture. The value of a REIT is dependent on the rental income from the properties that are owned by the REIT as a whole. This is one way of real estate investment for higher yields for small investors who cannot spend crores of rupees buying property.

The Indian currency is among the worst performers among emerging markets as foreign investors pulled out more than $6 billion amid fears that the Federal Reserve chairman Ben Bernanke will end the $85 billion monthly bond purchases that helped global stocks rally.

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3 more districts enter National Capital Region

 The National Capital Region has undergone another expansion with three more districts – Mahendragarh and Bhiwani (both in Haryana) and Bharatpur (Rajasthan) – added to it on Monday. This brings the number of districts in the NCR to 19, with the total area increasing by 34% to 45,887sq km.

And there are other districts waiting to join the elite club. Haryana wants Jind and Karnal in NCR, while UP is pushing for the inclusion of Mathura-Vrindavan.

Government sources said Monday’s inclusion was dictated by contiguity with existing NCR boundaries and ‘good’ rail and road connectivity to the national capital and other major cities.

Things You Should Know Before Buying An Apartment

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Buying a property whether it is a land, home, apartment or villa, it is important to have a detailed research about it. Most of the people in present generation opt for apartments for buying. If you decide to buy an apartment, there are certain things that you should that you should consider.

Here are certain tips for you to take before buying a apartment for dwelling.

  • With Basic Facilities: This is the first thing that you should consider before buying a flat. The essential facilities that a flat provides are water supply, power supply, elevator, lift facility and security. It is always better to buy those which have close access to grocery stores, hospitals, educational institutions and work places. Therefore, you can avoid spending money for transportation for every purpose. As a result, it saves your precious time too.
  • Societal Status: People classify each flat based on economic funds possessed by the individual’s dwelling within it. Considering the economic assets of the people dwelling in a flat, these flats classify as a lower level, medium level and higher level. Therefore, it is elementary to research the category of flat which you are going to buy. This categorization reflects the buyer’s status in the society too.
  • Floor Location: As the ground floor of an apartment is having more access to the facilities, people prefer to buy the apartment within ground floor. If the functioning of elevator got stuck, it becomes very difficult for the dwellers of upper floor to get all facilities accessible. As a result, the price for flat in the ground floor becomes higher than the upper floors.
  • Society: You should select apartment considering the society which it belongs to. If you need the one which provides access to grocery shops, educational institutions and entertainment zone or if you need the one which is away from the hustle and bustle of busy city life, choose in accordance with it. You can also choose flats between cosmopolitan environment which can satisfy both the benefit of a city as well as rural areas.
  • Budget: You should make necessary arrangement before you do the property deal. If you are deciding to get a bank loan, you should discuss about it with the banker and make necessary arrangements for the loan. If you are availing loan, you should also discuss about EMI. Ensure that the EMI for the loan is affordable for your monthly budget.
  • Family and Children: If you have a spouse and children, you should select the dwelling unit which is comfortable and meeting the requirements of your spouse and children. If you have children, also make certain that the school they are studying is near to your apartment.
  • Developing Location: Before investing in apartments, it is necessary to check whether its location has any scope for future progress. If the authority in a location plans to develop projects in it, it adds the value of money which you have invested and your investment becomes more worthy.

If you consider all these tips before buying an apartment, you can make your investment most valuable and worthy without any fear of loss.