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SVP Builders-Gulmohur Projects Has Buyers Protesting Against Delayed Possession, Bounced Penalty Cheques.

New Delhi: The buyers of flats from the SVP builders are an aggrieved lot due to its callous attitude in delivering/offering possessions of the flats.  The project where the residents have booked their flats – Krishna Garden and Gulmohar Garden Phase II dates back to 2009-2010. However, the project is still far from completion.

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Whenever an allottee who gets the offer of possession letter is bombarded with some unwarranted charges. Not only this, the builder changed the building plans and got the same approved from the GDA fraudulently without obtaining the consent of the stakeholders/buyers.  This builder has also gone back on agreements signed with the buyers and is openly flouting the terms and conditions of the agreement, said a press release from Raj Nagar Extension Social Welfare Association.

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According to Saurabh Suri, the SVP Builders have committed following defaults:

1. Superfluous demands relating to metro cess and elevated road charges.  Also, there are two types of amount an allottee has to pay for metro cess – i.e. Rs.15/- psf  if paid within 15 days of demand or Rs.35/- psf after the 15 days.  This he is doing entirely on his whims and fancies.

2. Illegally adjusting the above cess charges against the penalty he has to pay to allottee on account of delayed possession.  No receipt is being given for above cess charges paid by the allottees, which is a financial bungling.

3. Offering the offer of possession without obtaining the mandatory Completion & Occupancy Certificates from the concerned government authorities.  Due to unavailability of CC & OC, buyers have to shell out extra 12% on account of GST.

4. Erecting mechanical hydraulic parking inside the periphery of the project, thus depriving the open parking that he has agreed to in the agreement and for which substantial amount has been taken by him from the prospective buyers.

5. Public amenities like, Swimming Pool, Club House, though specifically charged from each buyer are not being made available.

6. Inordinate delay in offering possession and not honouring the penalty clause, and, whereas though he has given post-dated cheques on account of penalty for delay in possession, these cheques have bounced in most of the cases.

7. For delayed payments he is charging 18% interest and himself not paying penalty charges as mandated by RERA.

8. Builder and its staff is very arrogant and they just do not attend to buyers for any of their above problems.

In view of the above, the buyers association held a dharna at the office of the builder – SVP Builder, 17 Kiran Enclave, Ghaziabad on October 20 at 1 PM. The builder failed to provide any solution.

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RERA – Still Rare On The Ground

  • Maharashtra has the most RERA-registered projects with 17,353, UP with 3,950 projects
  • Serious developer-favouring dilutions impacting demand in many states

More than a year after RERA was formally implemented, we are beginning to see some real impact on the ground. However, the results are still far from scintillating.

Progress so far

Out of all the states and Union Territories in India, Maharashtra takes the first place when it comes to proactive RERA adoption, implementation and integration, followed by Uttar Pradesh, Gujarat, Madhya Pradesh and Karnataka.

As per the latest registration updates, more than 32,306 projects and 23,111 real estate agents have been registered under RERA across states.

  • Maharashtra has the highest share of registered projects under RERA, accounting for 17,353
  • Uttar Pradesh has 3,950 projects registered
  • Gujarat has 3,300 projects registered
  • Karnataka has 1,982 projects registered
  • Madhya Pradesh has 1,901 projects registered.

States such as Maharashtra, Karnataka, Gujarat, Rajasthan, Madhya Pradesh and Punjab have fully-operational RERA. Due to the complexity in laws pertaining to land, north-eastern states such as Mizoram, Manipur, Nagaland, Meghalaya have not implemented RERA as yet, and are examining the provisions.

A RERA portal has been launched and interim regulations are visible in the cases of Himachal Pradesh, Uttarakhand, Haryana, Uttar Pradesh, Chhattisgarh, Andhra Pradesh, Karnataka, Tamil Nadu and Bihar.

A RERA website is not yet operational in West Bengal, and a committee has been formed to study the Maharashtra and Karnataka model of RERA implementation.

Penalty impositions so far

Penalties have been imposed by state RERA cells for not aligning with the RERA rules in: 

Maharashtra, which has penalised many reputed developers recently for advertising unregistered projects and not having the project address updated on the RERA website. 

In Karnataka, the 2nd most active state in implementing RERA, where the RERA cell has sent notification letters to 100-130 projects in Bengaluru for not registering under RERA in 2017. 953 project applications are still under investigation. 

 

(Disclaimer: Numbers as per respective state RERA websites in August 2018)

Despite some encouraging number, it is evident that RERA has not been adopted in the manner and to the extent the Centre originally intended. In some states, there have been serious developer-favouring dilutions of the clauses meant to protect the interests of buyers.

Delay in project execution because of dilution of RERA, and the overall signal such dilutions send to the market will act as a dampener on buyers’ confidence. This, in turn, will affect developers' ability to sell.

There can certainly be circumstances under which a project can be delayed for which the developer cannot be held responsible. Among such extenuating circumstances, the failure by concerned Government authorities to furnish timely development permits without good reason probably counts the highest.

The effect that the more recent amendments will have depends on how different states interpret the concept of ‘exceptional and compelling circumstances’. RERA must define such circumstances clearly and satisfactorily to end-users and investors.

Also, Government agencies dealing with project clearances should be brought under RERA's ambit, as well. If RERA is to bring in genuine accountability, the accountability must be unilateral, not one-sided.

Major Dilutions

While many states are still in the process of notifying their RERA rules, there has been continuous fretting about the dilution of the rules recently notified by many states. In fact, there are multiple changes made by different states in the RERA proposed initially by the Central Government.

Dilution in ongoing projects’ definitions has left a huge number of projects out of the RERA ambit, and this is understandably a major concern for buyers.

A broad-based list of RERA dilutions:

Introduction of exceptions to dilute the definition of ‘ongoing’ projects

Penalty provisions related to imprisonment of developers

Calculations on monetary fines or penalties as a percentage of project cost

Payment schedule requirements

Norms for escrow withdrawals

Liability in case of structural defects

Fees on filing complaints against the developer

To live up to the spirit of RERA, the Government must ensure at all costs that the RERA rules remain aligned and effective across all the states, while balancing the interests of both buyers and developers.

(The writer is Chairman - ANAROCK Property Consultants)

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Gurugram Real Estate - Q1 2018 vs Q1 2017

Residential Real Estate

The Millennium City of Gurugram has a very prominent place on India’s residential real estate map and is considered a bellwether of the state of the market for NCR. If we study what happened in the city’s housing market in the first quarter of 2018 against the same period in 2017, some interesting changes emerge.

Pricing

Q1 2018 - The weighted average price for housing properties launched between January to May in 2018 is INR 4580/sq.ft.

Q1 2017 - The weighted average price for housing properties launched between January to May in 2017 was INR 4,300/sq.ft.

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How To Avoid Defaulting On Home Loan Payment

Home loans are paid in instalments which are commonly known as Equated Monthly Instalments (EMI). These are fixed amount which is expected to be paid by the borrower to the bank every month as a part of loan repayment. A bank considers a home loan to be in default when the borrower fails to make a payment and is behind by 90 days. In such a case, the borrower would have missed 3 payments of EMI.

When the home loan is in default, banks do not seize the assets of the borrowers immediately. They send a notice to the borrower stating that the EMI payment has been missed and strict action will be taken in this regard. Banks are ready to understand the various reasons behind non-payment of the EMIs, which might include financial crisis, accident, etc. if the borrower approaches the bank with an explanation.

Once the reason is conveyed by the borrower or is otherwise evident to the lender, the bank restructures the EMI and extends the loan tenure on the request of the borrower. This would help the borrower to repay the EMIs on time, and banks will not have to auction the property. Only in extreme cases will the property be sold by the bank. If the property of the borrower is sold within a span of 3 years of acquisition, then the borrower can expect to receive a profit on the sale. However, if the property is sold after 3 years, the borrower can take the benefit of tax exemption.

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Completion Challenge Before Builders in NCR

Project delays are one of the most alarming issues historically dogging the Indian real estate sector. The dearth of effective planning and execution of construction activities, escalating construction costs, approval delays, diversion of allocated funds to other projects and tepid sales are some of the predominant factors resulting in project delays. The homebuyer is, of course, at the losing end.

                    

To put it in numbers, during 2017, out of the total 5.8 lakh residential units slated to be completed across the top 7 cities in India, only 1.5 lakh units were actually delivered until December 2017. This indicates that around 4.3 lakh units actually missed their stipulated completion deadlines.

The National Capital Region (NCR), one of the country’s largest residential markets, was seriously wounded by sudden policy changes, structural reforms - and the dubious practices of unscrupulous developers. As a result, it topped the list of cities with maximum project delays. Around 1.5 lakh units in NCR missed the 2017 deadline. The story in Mumbai Metropolitan Region (MMR) was no different with nearly 1.1 lakh units missing the said deadline.