Is Ahmedabad Will RERA Push Property Prices Up?

By the year 2016 in the month of May 1, RERA act taken into force in the real estate field, hence the real estate agent consider a short-supply and albeit temporarily, as fresh realty project launches is get belated on account of current stricter terms and conditions. Here the short-supply joined to develop the major construction cost and it is expected to increase the property prices in a short time, that said by experts and real estate agent.

If it is more compliance on the new project launches, then it will be postponed. Due to the great demand increase, there will be changes to get delay to launch the fresh new project, which result into short-term supply. This said by the Jaxay Shah, president, Confederation of Real Estate Developers’ Associations of India (CREDAI).

Here around four to six month will be taking for the conversion of agriculture land into non-agriculture (NA). As result, the respective development plan passing as well as the environment clearance need around three months each. After getting such a permissions, the respective constructor need to apply for registration of state regulatory authority w that required one month’s time complete. When you inversed money on purchase a land by today, then it required up to 10 months for me to launch project,” said a city-based developer.

If the fresh project launches is being delayed due to accesses all the permissions by the developers before going to selling project to the buyers. Therefore, there is great demand in the market which has picked up and when the supply does not have proper match pace with demand, then it has chances to dry up the presence of stocks in the current market. Hence the Short supply will automatically get increase the prices of products.

Most of the Industry players will wait for the construction cost to hand over the developers so they need to deposit up to 70% of the money from respective investors as well as from buyers into a part account. It can use only for the purpose of construction of the new project. Then the Developers need to pay the full payments for buying the land as developer need to have land agreement previous to go for the registering of the respective projects. Then the Construction cost of the project will expect to increase up, when it is passed between the consumers and said a developer.

Due to the restricted supply in the delayed project, launches will have changes to increase property prices shortly, and then it will stabilize in longer run, which said by Nirav Kothari, MD, Ahmedabad office and he is JLL, a leading property consultant in the Ahmadabad.

Maharashtra’s real estate regulatory authority to start functioning from May 1

Consumers are keenly looking forward to the rules regarding registration of developers under Real Estate Regulatory Authority (RERA) even as the housing regulator’s appointment was cleared by the state government on Tuesday.

The regulator had to be appointed before April 30. The rules regarding the establishment of the housing regulatory authority were notified and the remaining rules should be out in the public domain in the coming two days, stated housing department sources. The chief minister had earlier approved the rules on March 22 and officials from the housing department stated that RERA will be functional from May 1.

Mumbai Grahak Panchayat’s Shirish Deshpande is keenly looking forward to the rules for the developers which will give a clear picture on whether there has been any dilution of the central Real Estate (Regulation and Development) Act 2016. The CM had earlier told TOI that the rules will be as per the central act. Deshpande’s group had suggested several suggestions.

The failure of most states to put in place a regulator ahead of the April 30 deadline has put a question mark on the Union government’s effort to protect home buyers by giving them a platform to resolve disputes quickly.

Officials from the housing department said that the file for clearing the rules for developers had been forwarded to the law department and it should be cleared soon. There were nearly over 600 suggestions and objections and according to the authorities the same have been incorporated.

Officials stated that the housing department notification mentions the appointment of chairman, member officers and other employees. Gautam Chatterjee, an officer on special duty, has already been appointed as interim regulator and hopes are high that he will be appointed a full-time regulator.

Deshpande from MGP asked as to why the government was short-circuiting the process of appointments and why they have not placed an advertisement in a local daily for member’s posts. “We should have members from all across the society,” he added. Meanwhile, Pune-based consumer group under Vijay Sagar is hoping that all the pro-consumer points are included in the developer rules.

Credai Maharashtra president Shantilal Kataria said, “Developers may face issues particularly with the ongoing projects, however, it will be good for both developers and consumers,” he stated.

Source:http://realty.economictimes.indiatimes.com/news/regulatory/maharashtras-housing-real-estate-regulatory-authority-to-start-functioning-from-may-1/58290523

RERA may Revive Real Estate Sector in Second Half, say Experts

After May 1, when the Real Estate Regulatory Act (RERA) is in place, the realty sector will likely see an uptrend with slight price correction, say industry players and stakeholders.

This is likely as genuine buyers may pitch in on the back of an improved consumer climate and lower home loan rates.

“Considering the present scenario, the next three-four months are like the gestation period for the realty sector and after six months the sector is likely to gain momentum. We are hoping to see the positive impact in the second half of 2017 itself after RERA comes into full effect,” real estate advisory firm PropUrban Founder and CEO Mir Jaffer Ali told IANS.

According to the Real Estate (Regulation and Development) Act, 2016, which came into effect on May 1 last year, every state is supposed to have a RERA in a year’s time.

It will thereon become mandatory for all real estate projects, commercial and residential, to register with RERA for transparent execution.

“At a time when the setting up of a Real Estate Regulatory Authority in each state is set to bring in increased accountability in the markets, we can expect to witness some amount of correction in real estate prices in markets,” property consultant Cushman & Wakefield Managing Director (India) Anshul Jain told IANS.

Ali concurred and said that the cash component in property transactions will see a significant drop, resulting in a fall in land prices, which could be anywhere between 15 and 20 percent at some places.

On a positive note, almost all banks have also lowered the home loan interest rates post demonetisation which would automatically generate more demand for housing with the sops given to affordable housing in this year’s Union Budget being an added advantage.

The start of 2017 has seen buyer sentiment improve and the anticipation is that with a positive electoral result and encouraging budgetary reforms, the sector should perform better over the course of the year.

Large developers such as the Lodha Group have seen sales of 850 units in February 2017, which indicates a gradual upward trend in consumer sentiment across the segment.

More so, with the dust of demonetization finally settling, buyers’ sentiments are looking positive in anticipation of higher transparency and efficiency. The genuine requirement for homes coupled with reduced interest on home loans can be attributed to this.

According to a survey by PropUrban, once RERA is fully in place, about 45 per cent respondents would be investing within the next six months, while another 26 percent are likely to take the plunge within a year.

“Interestingly, now the market will see the return of ‘real buyers’. As for the RERA and Benami Amendment Act, the sector is likely to see the positive impact in the short-term — within one-two years,” Ali said.

Moreover, with the deadline of implementing RERA fast approaching, developers are trying to focus on completing their existing projects rather than launching new ones, which is good for the sector and buyers, he added.

With RERA, there would be mandatory disclosure of project details, including those of the promoter, project, land status and clearances. This would increase the credibility of developers and would protect consumer rights as well.

Dharmesh Jain, President, Confederation of Real Estate Developers’ Associations of India — Maharashtra Chamber of Housing Industry (CREDAI-MCHI), told IANS that RERA “will help in bringing in higher transparency and will help the customer to get possession in time. Also, one will know what they are paying for and would be sure they will get what they are promised. In fact, the developers will have to be accountable on the dates and timelines shared”.

Additionally, buyers and developers will now finally be on a level playing field with respect to penalties for delays. Both parties will now pay the same rate of interest in case the buyer delays payment or the developer delays giving possession.

“RERA is a long-term policy measure whose effect will be pretty permanent, in the sense that it will drive unscrupulous or unorganised developers off the market and leave a level playing field for credible players in its wake,” Ramesh Nair, CEO and Country Head of leading property consultant JLL India, told IANS.

“We are now seeing evidence of a gradual revival on the back of pro-consumer measures like RERA coming in, decisive court actions against errant developers, price corrections and renewed confidence in the economy,” he said.

Shubika Bilkha, Business Head, Real Estate Management Institute (REMI), told IANS, “These initiatives will contribute to organising this sector that has been traditionally fragmented and unorganised while improving consumer confidence.”

source form: http://economictimes.indiatimes.com/wealth/real-estate/rera-may-revive-real-estate-sector-in-second-half-say-experts/articleshow/58108574.cms

New real estate rules under RERA finalised for Delhi

According to the Real Estate (Regulation and Development) Act, 2016, (RERA) all the state governments were to put in place the Act’s rules and regulations for their respective states by 31 October. But the deadline was missed by most states. On 23 November, the Ministry of Urban Development finalised the general rules and regulations for agreement of sale for the National Capital Territory of Delhi. It is now waiting to be notified. Other states are expected to follow soon.

The real estate rules in this agreement of sale are similar to those notified on 31 October by the ministry for the five union territories without legislatures. For Delhi, the rules also provide clarity on some aspects like litigation details that have to be published on website, provision for quality audit of projects and flexibility in agreement for sale.

Disclosure of cases

A promoter or developer has to publish details of litigation on the regulator’s website, with other information related to the project while registering the projects.

Details of litigation that have been disposed of by the court concerned in the past 5 years related to projects developed or being developed by the promoter has to be published on the website. This has been done as a promoter may not have the complete information about the various cases filed at the time of providing such information.

Most real estate consultants believe that it will help homebuyers and others to evaluate the developer’s credentials, but many also don’t think publicising all the litigations is important.

“This will help homebuyers to make informed decision. But given that it is easy to file litigation in the country, not all the litigation needs to be taken seriously. However, out of 10 may be one or two have serious issues that can impact the buyer decision,” said Anshuman Magazine, chairman, India and South East Asia, CBRE.

Other clauses

The rules for Delhi also provide for third-party quality audits, in keeping with the Act’s provisions.

With regard to the rules for agreement for sale between the buyer and the promoter, flexibility has been proposed so as to include other elements or features besides the apartment, plot, garage, parking—if required. For instance, allowances for rules in case of furnished apartments, apartments with private gardens and so on. This has been provided to address special contingencies relating to the nature of projects to be taken up or the needs of buyers.

Next step

As per the Act, once the rules are notified the next step is to designate any officer as regulatory authority till a full-fledged regulatory authority is established for the purposes of the Act, which include grievance redressal in respect of projects registered with such authorities.

Considering this, as of now vice-chairman of Delhi Development Authority (DDA) has been designated as the regulatory authority for National Capital Territory of Delhi under the Act.

Registration of real estate projects will begin only after notification of Section 3 of the Act by the urban development ministry, which will be done in due course.

The full Act is to come into force from 1 May 2017.

Till such a full-fledged regulator comes into being, vice-chairman of DDA, acting as an interim-regulator, would undertake preparatory actions like setting up website and putting in place required institutional mechanisms so that the multi-member regulator can start functioning as and when it is established.

Source:http://www.livemint.com/Money/5fNF5mFlnhJ3dmbNRUtZZL/New-real-estate-rules-under-RERA-finalised-for-Delhi.html

RERA: Property broking market in Karnataka may be hit by high agency fees

BENGALURU: Real estate brokers in Karnataka, hit by slowdown and demonetisation, fear that the new draft state Real Estate Regulator Act (RERA) will make their business unviable, with some even apprehending the prospect of a closure. The government expects an agency to pay a proposed registration fee of Rs 5 lakh in the city and Rs 2.5 lakh in rural areas in the new state RERA rule. Currently, 80% are individual agents while just 20% work with agencies in the city.

The registration fee set by the regulatory authority in Gujarat and Uttar Pradesh is Rs 10,000, which is much more affordable in the light of the relatively lower income levels of real estate agents. “The agents work for a mere two percent commission on the consideration value. The high cost of operations and the long gestation period in real estate transactions diminish the real returns. Given this, it is unviable to expect a real estate agent to pay Rs 5 lakh as registration fee,” said Farook Mahmood, CMD, Silverline Group, a real estate developer and a broking company .

The Bangalore Realtors Association of India (BRA-I) has expressed its reservations on the proposed rules,­ the first being registration fees, and the other is the issue of penalties for default by developers.

“Such measures will be a setback for the trade,” said Ayub Khan, owner, APEX Estates & Properties, a real estate brokerage firm in Bengaluru.

The new draft regulation is likely to hinder the growth of a parallel unorganised real estate agents’ sector comprising individuals who cannot afford the high registration fee.

“Honest brokers won’t be able to afford paying such a high fee.There should be a clear demarcation of what the role of a broker should be. The government should have conducted a written exam for the brokers rather than taking money for doing business,” said BM Pounacha, a Bengaluru-based independent property broker.

The draft regulations propose a penalty of 5-10% on the total value of a unit and imprisonment of up to one year in case of a default by the developer.

“A real estate agent is only a facilitator who brings prospective buyers and developers together, and helps them close the transaction. This is unfair because every agent acts in good faith after the due diligence of the property. A default by the developer for whatever reason cannot be held against the independent agent who is not part of the developer’s business processes. While it is definitely right to prosecute an agent for any offence committed by him, it is illogical to hold him responsible for an offence committed by the developer,” argued Mahmood.

According to Colliers, Bengaluru noted nearly 4,300 new unit launches, totalling about 21,800 new units year-to-date during the third quarter of 2016. The city witnessed about 63% q-o-q decrease in new launches.

Source: http://realty.economictimes.indiatimes.com/news/industry/rera-property-broking-market-in-karnataka-may-be-hit-by-high-agency-fees/55685140

More Protection for Homebuyers

Union urban development ministry finalises new realty rules under the latest law passed by the Parliament

There is good news for homebuyers in Delhi.

The Union urban development (UD) ministry on Wednesday finalised the rules to make the landmark Real Estate (Regulation and Development) Act operational in the national capital.

The law will not only protect new homebuyers from unscrupulous developers but safeguard the interest of allottees of the ongoing projects.

The Parliament had cleared the realty law in March and states and union territories were given six months to notify the rules.

While for Delhi, the UD ministry will notify the rules, the housing and urban poverty alleviation ministry (HUPA) had on October 31 completed the process for five Union Territories that it administers. States have to frame their own rules based on the Central law. So far, only Uttar Pradesh and Gujarat have notified the rules.

“We will notify the rules for Delhi before November 27, the deadline set by the Centre,” said a senior UD ministry official.

However, as of now only some of the provisions of the realty law will become operational. The full Act will come into force from May 1, 2017 when the regulatory authority is set up in each state and Union Territory.

For the interim period, vicechairman of the Delhi Development Authority has been designated as the real estate regulator.

The realty act empowers the appropriate government to designate any officer as regulatory authority till a full fledged one is established.

Some of the important provisions in the Delhi rules that has been finalised are:

ONGOING PROJECTS

The rules have cleared the opacity around ongoing projects that have not received completion certificate till now.

While registering with the regulator, developers of all such project will not only have to make public the original sanctioned plans with specifications and changes made later but also the total amount collected from allottees and the money that has been used already.

Besides, within three months of applying for registration of a project the developer will also have to deposit 70% of the amount collected that has not been used in a separate bank account for ensuring completion of such ongoing projects.

REGISTRATION OF PROJECTS

To incentivise developers to get their project registered with the realty regulator, the Centre has reduced the fee by half.

The fee has been reduced to Rs.5 per sqm for up to 1,000 sqm area and Rs.10 per sqm beyond this limit subject to a maximum of Rs.50 lakh per project.

INTEREST TO BE PAID IN CASE OF DEFAULT

In case of default, promoter and allottee will have to repay with same rate of interest, which will be higher by two per cent of the SBI’s benchmark interest rate

LAW’S PROVISIONS

The realty law makes it mandatory for all such builders — developing a project where the land exceeds 500 square metre — to register themselves with the regulatory authority before launching or even advertising their project

Failure to do so will invite a penalty of up to 10% of the project cost. For subsequent violation, developers will land up in jail for three years.

The rules also provide for the regulatory authorities to undertake third party quality audit of real estate projects registered with them, to ensure quality of construction, services etc., of the project in the interest of buyers.

Source From: http://paper.hindustantimes.com

UP, Gujarat dilute new realty law

States led by UP and Gujarat have begun diluting provisions of the Real Estate (Regulation & Development) Act, which notify the rules for regulation of the sector. Both states have let off most ongoing real estate projects which have been delayed for long and remain a worry for thousands of home buyers awaiting delivery.

While UP has come up with four exemptions to exclude incomplete projects from the category of “ongoing projects”, Gujarat has exempted all projects launched before notification of the rules. This means such projects won’t have to be registered with the real estate regulator in these states.

On the contrary, the law enacted by the Centre earlier this year provides for mandatory registration of all “ongoing projects” that have not received completion certificate.

“The central law, which is binding on all states, does not differentiate between ongoing and future projects for registration. However, it provides for registration of incomplete projects within three months from the commencement of the Act,” said an official here.

The norms notified by UP excluded projects in which services had been handed over to the local authority for maintenance, common areas and facilities that had been handed over to RWAs for maintenance and where development work had been completed and sale and lease deeds of 60% houses executed.

“This dilutes norms laid down in the law and will help builders avoid the mandatory regulatory provisions,” the central government official said.

Source:http://timesofindia.indiatimes.com/india/UP-Gujarat-dilute-new-realty-law/articleshow/55235807.cms

Occupancy certificates to be processed by Noida under new RERA rules

 

The Noida authority on Tuesday said it has stopped accepting builders’ occupancy certificate applications for group housing buildings without the required documents, as laid down under the Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016.

The Noida authority on Tuesday said it has stopped accepting builders’ occupancy certificate applications for group housing buildings without the required documents, as laid down under the Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016 .
As per the rules, if a builder has submitted an application before the local government body (such as the Noida or Greater Noida authority) to obtain occupancy certificate and the same is accepted then that particular project will not be governed under new real estate regulatory authority.

“We have made it very clear to all developers that they will have to provide fire clearances, necessary environmental approvals, no-due certificates and documentary evidence to prove that a particular building is eligible to be occupied and given an occupancy certificate. Our staff will examine whether all required papers are in order. If even a single paper is missing, we will not accept the application,” said SC Gaur, chief architect and town planner of the Noida authority.

Officials said that the authority has issued instructions to its planning department and also informed developers on the issue. The move is to ensure that developers do not misuse the provision to get away from regulatory authority’s strict rules.

As per the process of the Noida authority, a developer’s certified architect submits a completion certificate detailing the building for which an occupancy certificate is required and ready to be handed over to homebuyers. Then, the planning department of the Noida authority examines the documents and conducts an on-site inspection.

Official said that the authority issues occupancy certificates only after it is satisfied that the builder has completed all required facilities.

“Earlier, in many cases, we used to demand missing documents from the developer during the processing of an application. But now we will begin the processing of an application only if all required documents are in place,” Gaur said.

The Greater Noida authority may also adopt Noida’s method to make sure developers do not cheat.

“I will check it with the Noida authority on the procedure it is applying. If I find it necessary, then I will adopt the same,” Deepak Aggarwal, chief executive officer of the Greater Noida authority, said.

Source:http://www.hindustantimes.com/noida/occupancy-certificates-to-be-processed-by-noida-under-new-rera-rules/story-V9YMtVwsEotxRXv8FU5u8K.html

Chandigarh sets up realty regulatory body

The development comes as the central government is set to notify the RERA Act, asking all Union territories to implement the act in the first phase.

The city has become one of the first in the country to set up a temporary Real Estate Regulatory and Development Authority (RERA) to address hardships homebuyers face due to delay in possession of flats and plots.

It handed over charge to 1989-batch IAS officer and Chandigarh Housing Board (CHB) chairman Maninder Singh Bains.

The development comes as the central government is set to notify the RERA Act, asking all Union territories to implement the act in the first phase.

“We have formed temporary RERA in the city. UT housing secretary Maninder Singh Bains will head it as the chairman. He will listen to grievances and complaints of plot owners till the formation of a permanent authority that we will be set up by the stipulated period in April 2017,” said UT adviser Parimal Rai.

Sources said since its formation needs the intervention of the centre, the UT administration has prepared a full-fledged case to be sent to the government in a day or two. Besides private builders and real estate giants, government agencies will also come under the new act.

“In the current scenario, government agencies dealing in construction of houses are also under the act. However, deliberations are being held whether government agencies like CHB and others need to be part of it or not as they are more trustworthy as compared to private builders,” said Bains.

Source:http://realty.economictimes.indiatimes.com/news/regulatory/chandigarh-sets-up-realty-regulatory-body/55171999