Friday, July 3, 2015

The answer to leading a Luxurious Life - Villa

Living in a spacious setting, with large garden, a huge parking space, stairs coming out from the mid of living room and reaching spacious room set on the upper floor. With a big terrace and a few extra spaces here and there will make everybody’s dream of living in heaven on earth a reality. This is how a luxury apartment aka villa feels like. If you want to know what it is all about, keep reading.
Irrespective of the 16% buyers looking for builder floors in the emerging IT hub of India, the demand for villas continues to grow among the buyers and maintain the niche position. The reason for this demand varies from large space, decoration opportunity to a huge play and parking area.

Irrespective of whatever the reasons typical villa buyers may have, they witness the comfort and superiority they get after investing in a villa.

Reasons for this increase in demand

The factors that have seemingly led the world to demand villas are:

  1. They want to stay away from the hustle of the cities
  2. The area they will be getting is huge
  3. There is a lot of space for innovation or second income
  4. Less or no parking/ waste nuisances
  5. Rise in income

Along with the above mentioned factors, things like the excitement of living in an independent house with zero interference is what drive property seekers to Bangalore. Another important benefit of investing in villas in Bangalore can be that time of construction is faster and therefore the time of possession.

Reasons why Bangalorites are opting for luxury living provided by villas

When it comes to following your dream of living a spacious and luxurious life, things like the price, income level and taxes etc. does not stop you. In case of Bangalorites, the factors for this choice can be:

  • High level of Income

People who live and work in Bangalore are paid more than their other metro counterparts, mostly because of the high cost of living.

  • Need of Personal space

Like every other metro people, they too crave for the feeling of being secluded with no interference, where they can relax after a hard days at work.

  • Connectivity

The area where villa system is most prevalent is the Sarjapur locality. The area is easily connected to rest of the city through multiple modes of networks.

  • Land price

The price of villas here is much lower than what they will get in other metros or similar areas.

  • Amenities

The builders who houses in the Sarjapur area provide all the basic amenities that an investor can expect from living in an apartment.

Living in a villa has its own perks but some things should be given huge consideration too, like the age and condition of the property, the reliability of developers, and their past work etc. Other things you should note before making a huge investment is the locality, how is the commutation from this locality, the people who are going to be your future neighbors. Also note the resale value of your property in case you decide to sell it in future.

Villas have proved to provide a luxurious living statement along with comfort and a chance to have a second earning. Investing in one is a sweet deal, but like any other investment make sure you gather full information about the builder group.

This is a guest post by Tripti. Her articles talk about the real estate industry. She is an avid reader and a keen observer.

Tuesday, June 30, 2015

What are the things one should notice before taking possession of the property or new flat in India?

Sumit was finally relieved that he will be getting the possession of his flat in Noida. Sumit had bought this under construction flat in 2009. After many delays due to environmental clearances and slow progress by the developer, the flats were finally ready for possession for flat owners. Sumit and other flat buyers in this group housing project had several rounds of discussions with the builder and environment ministry for speedy delivery of flats. Because on one hand, many of these flat buyers including Sumit were paying monthly rent and on the other hand, EMIs on these flats had started. That was double whammy for Sumit and others.

Now that, flats are ready for possession, what shall Sumit and other home buyers like him verify in order to make sure possession of flats is legal? Before handing over the final payment and taking possession of the property, Sumit and other flat buyers in this group housing project shall ensure that:

  1. Property is vacant
  2. Title certificate to be handed over by seller to buyer
  3. Buildings plans, approved layouts, and other supporting documents (original) to be handed over by seller to buyer
  4. In case of new group housing project (as is the case with Sumit), it shall be verified that building has been given the occupancy/completion certificate by the concerned authority
  5. Mutation is done to reflect the name of the purchaser

Find below detailed document highlighting what needs to be checked before taking over the possession:

Friday, June 26, 2015

What are the major differences between Real Estate Venture Funds, Real Estate Investment Trusts (REIT), and Real Estate Mutual Funds?

Real estate investment from an individual’s point of view is a large investment wherein large amount of money (in Lacs, or in Crores) is required to purchase either a commercial or residential property. The money invested sits there in the asset and over a period of time capital gains are accrued by the investor. The capital gains thus accrued depend on supply demand equilibrium prevailing in the market. If property is available for use, the investor can use it for own purpose or rent it out to earn rental income. Thereby, investment in real estate can fetch twofold returns namely rental yields and capital gains.

However, only investors with deep pockets can afford to invest in real estate asset class. What about retail investors with small amount of money? Can’t they invest in real estate just like they invest in stock markets? Yes, they can by way of participating in either Real Estate Investment Trusts (REIT) or Real Estate Mutual Funds (REMF).  Read more about Real Estate Investment Trust.

Find below the major instruments that can be used by investors to invest in real estate without actually buying a Property:

  • Real Estate Venture Funds

Investment Audience: HNIs, institutional investors and global investors (since minimum investment required by each investor is worth millions, retail investors are outside the purview)

Investment Target: Real Estate Assets (Projects/Ventures), securities (of listed/unlisted entities) or both.

Investment Returns: 25-30% (on an average)

Leading Entities: Indian players (such as Kotak, HDFC, ICICI, Kshitij, DHFL) and international players (such as Actis, Morgan Stanley, Maple Tree, Sun Apollo, Lehman Brothers etc).

  • Real Estate Investment Trusts REITs

Overview: Close ended investment vehicles that invest only in real estate assets (through property or mortgages). It is floated as a company with issued share capital. ( REITs are structured as corporations with issued share capital)

Investment Audience: Retail as well other institutional investors

Investment Target: Real Estate assets only (either through mortgages or property). It invests primarily in ready to use, constructed properties only.

Investment Returns: Returns in the range of 10-15% annually from rental income of property owned by REIT.

  • Real Estate Mutual Funds REMFs

Overview: Close ended funds that invests primarily in securities issued by real estate companies (and to some extent assets as well).

Investment Audience: Retail as well other institutional investors

Investment Target: As per SEBI guidelines, at least 75% of the total assets should be invested in real estate or related securities. Further, a mandatory 35% of assets within the stipulated 75% have to be invested in completed real estate assets. The remaining 25% can be invested in securities related or unrelated to the real estate sector.

Investment Returns: Expected returns in the range of 35% (largely capital gains through investment in securities or sale of assets at time of closure).

Tuesday, June 23, 2015

How can one verify Property Titles in India??

Looking to buy a piece of land or plot or ‘ready to move’ property? Well, it can cost you in crores of Rupees. Agreed, you have arranged for the funds and also have done your due diligence. But, did you verify the ‘title of the property’?

Before you even initiate price negotiations with the seller for buying that plot or property, make sure you verify that ‘title of property’ is clear and the seller has the right to sell the property or land. The property shall be in the approved sector or area within the city. Make sure, property is located in an area where local municipal department has provided civic services such as sewage lines, water lines, and electrification. If it’s a ‘ready to move in’ property such as Bungalow, villa or independent house, make sure that property had been developed as per the local applicable building codes.

What does clear property title mean? A title that is free from claims or legal questions and all other encumbrances about the ownership of the property. Therefore, it is imperative for you to assess property titles carefully. One should take services of legal experts when it comes to verifying property titles. However, we present below the list of legal documents that can help you in verifying the title of the land that you intend to buy.

Friday, June 19, 2015

Be wary of the hidden charges while buying property in Delhi

Description: Hidden Charges increase the actual cost of the property; therefore, it’s better to keep in mind these charges while preparing the budget for a new property.

Buying a property in Delhi is one of the most important decisions for those who want to settle in the capital. The buyer goes out of his or her financial capabilities and prepares the budget to buy the property. But often, the buyer ends up paying extra which he or she does not realize. There are a number of extra charges in the form of extra taxes and other fees which comparatively makes the property much costlier than its actual price. This extra amount other than the actual cost of the property hurts the buyer’s pocket as it gets out of the buyers allocated budget for the property. Hence, the buyer needs to be aware of these hidden charges to prepare the budget accordingly, before investing in a new property.

1. Stamp duty and registration fees: 
Getting a property in Delhi registered is an important aspect in the property buying process. It is a final agreement between both the parties that indicate the change in ownership of the property. In order to get the registration done, one has to pay a certain amount to the government. The registration form costs a particular amount, depending on the total property value. Though the charges for stamp duty and registration for Property in India varies from state to state, but usually it is between 4% to 10%. Typically, in a majority of the states, this registration and stamp duty fee adds up to 5% - 14% of the cost of the property. In addition to this expense, there is another registration fee that is payable to the court which differ from state to state and varies between 1% to 2% of the value of the property.  And, above all, there are additional costs that include lawyers and notary fees, who get the agreement done in the court.

2. Service Tax and VAT:
The service tax is applicable on the purchase of any property in India that is under construction while the VAT is charged over the value of the construction of the project. The imposed service tax is 12.36% of the 25% value of the under constructed property. Whereas the imposed VAT is between 1% to 5% of the under constructed property value. Altogether, the service tax and VAT can add up to 8% to 10% of the entire property value.

3. Preferred Location Charge (PLC):
The term Preferred Location Charge, commonly known as PLC refers to the extra charge that is levied from the buyer to buy property in Delhi in their choice of location. This is applicable specifically in a housing complex, layout or residential community. Though this charge differs from builder to builder and project to project. Lavish villas, penthouses facing the sea or garden are most likely to have higher PLCs.

4. Utility Charges:
The charges referring luxury amenities or those linked with the building come under utility charges. This includes parking in open or closed space, clubhouse membership for a lifetime or yearly, firefighting provision, electrical and various other charges associated with Government utilities as well. Apart from these there are other charges involved while buying property in Delhi such as maintenance, security charges, and others also. Security charges refer to the expense for employing security personnel, installing and maintaining security arrangements like CCTVs camera, intercom among others. These extra charges add up to the initial cost of the project in a huge way and become a burden on the shoulder of the buyer.

5. External Development Charge (EDC):
EDC is usually meant for the maintenance of roads, water, sewage, electric supply, lights and development of the surrounding area. It varies from location to location and adds up to 10% of the entire cost of the project. Sometimes the government also levies development charge on the developer. These charges also are also charged in the form of maintenance fees in advance for a longer period of time. This is a great disadvantage the buyer as he has to shell out extra amounts for which he does not prepare himself.

This is a guest post by Seema Chauhan

Monday, June 15, 2015

The Launch of Virtual Tours for Resale and Rental Properties

Indian consumers are increasingly becoming digitally savvy and prefer using online interactions owing to the cost efficiency. Resale and rental properties are no exceptions. With new improvements in design and marketing, every realtor is trying to provide better service. CommonFloor decided to launch live-in virtual tours to improve the property search efficiency for its consumers. Read on to see how and why this idea was conceived.

Why Virtual Tours? 

Sumit Jain, the co-founder and CEO of Bangalore based real estate portal, CommonFloor had one thing to say about the use of pictures. “Photographs are of the past”, he said. This makes every sense since technology today can drive multiple applications in a jiffy. The world is transitioning to virtual reality and Google Glass today, and it makes all the sense to revamp one’s services for today’s age.

By using virtual tours for resale and rented properties, CommonFloor is aiming to provide a close to reality experience. The idea essentially was to eliminate the need to visit the property to make a decision on the same. The live-in virtual tour on the CommonFloor website and mobile app are set to do exactly that.

In 2012, had introduced the concept of verified listings that were backed with data. They sent their team to visit every listed house and verify and collect information about the listing. It was the differentiating move then, which the competition adopted within a year’s time.

How is this Information Collected? 

CommonFloor plans to create a hybrid model with its virtual tours. They plan to have their team actively map every single listed house in their portal while empowering brokers with technology. A plan to scale the operations up to 5 lakh property mappings is in place as more than 5000 properties have already given virtual tours. The company provides its services to the customer for free, whereas the revenue pitches is on a “per lead” basis from the brokers/homeowners.

Lalit Mangal, the co-founder and CTO of CommonFloor explains the virtual tours to be a product that gives the company a cutting edge in the market and provides the seekers with a wall-to-wall and ceiling-to-floor exploratory power.

CommonFloor currently has a team of over 1000 employees and has listed over 1 lakh residential projects from 200+ cities. They have also developed the virtual reality based device called CommonFloor Retina that takes live-in tours to the next level.

This is a promotional post by Pravitha Rohit

Friday, June 12, 2015

The Hottest Countries for Real Estate Investment in 2015

The Global real estate market has evolved big time in the last few years and the investors are now increasingly investing in emerging economies like India. Even though the rating agencies world over have given preference to developed nations like United States, Australia, France, Hong Kong, Singapore, England and the United Arab Emirates ahead of India, the nonresident Indians and institutional investors world over believe otherwise. And their belief does make a lot of financial sense.

The Indian property market is among the fastest growing sector in world realty and as a result the country has emerged as the hottest destination for realty investments in 2015. Here are the important reasons for renowned interest in Indian real estate industry –

  • Lower prices

Barring few places in Delhi, Noida, Mumbai and luxury flats in Gurgaon, the realty prices in India are much lower as compared to the world’s average. This basically means that the investors from across the world have greater chance for price appreciation with lower input costs. Additionally, the evolution of multitude of online real estate portals has meant that people sitting abroad can now purchase property in India without actually having to do personal on-site visit. These portals features lakhs of verified realty listings and the users can get complete details of all properties/projects from the comfort of their home or on mobile apps.

  • Rupee factor

The value of rupee is the other big reason why people from across the globe are aggressively investing in Indian realty market. The value of 1 USD is equal to nearly 64 rupees, while 1 Australian dollar is nearly 50 rupees and the Singapore dollar is not far behind valuing approximately 48 rupees. This means that people spending in foreign currency to buy flats in India will have to invest a lower sum.

  • Favorable norms for foreign investors

The other big factor for India emerging as the hottest country for property investments in 2015 is the favorable foreign direct investment (FDI) norms. The Modi government has brought in several reform measures to relax FDI rules in construction sector. The central government has also eased the entry and exist norms which has led to a flurry of offshore money in the country. Its trending FDI in realty sector!

  • High demand for residential housing

The expected price appreciation is also one of the critical reasons why the country is attracting lot of investment in infrastructure domain. The realty prices across the country have appreciated more than 200% in the last 10 to 12 years. And looking at the current growth rate, most analysts believe that the prices in construction segment including residential, commercial, industrial as well as hospitality segment, will appreciate annually at the rate of 12% to 14% in the coming few decades. The government reform measures such as building 100 smart cities, housing for all by 2022, constructing new highways, roads, rail tracks, ports and airports will go a long way in complementing the growth. In fact, as per the recent news, the market size of Indian real estate is all set to touch 180 billion USD by 2020.

This is a guest post by Rajveer Das

Tuesday, June 9, 2015

What is mortgaging and what are the Costs involved in mortgaging

These days, buying a house has become relatively easier in India because of evolution of the housing finance sector.  While cost of buying a property has surged, the availability of housing finance has helped middle class buyers to own their dream home. In order to avail housing finance, a buyer typically mortgages his/her property with the lender. A mortgage therefore is a method of using property for the payment of debt.

The provisions relating to mortgage of property are contained under Sections 58 to 104 of the Transfer of Property Act 1882. Section 58 of the Act specifically defines the meaning of mortgage and other related terms, according to which, mortgage means the transfer of an interest in specific immovable property for the purpose of securing payment of money advanced or to be advanced, by way of loan or an existing or future debt. The transferor is called a mortgagor, the transferee a mortgagee, the principal money and interest of which payment is secured is called 'mortgage money', and the instrument by which transfer is affected is called a mortgage deed.

A property can also be mortgaged with the lender for securing a loan for the purposes other than owning a home. Therefore, mortgage is simply a loan against property. Lender charges interest rate from the borrower on the outstanding principal. Borrower is supposed to make a monthly payment to pay the interest charges as well as clear off part of principal amount. Failing to make monthly installments can lead to repossession of property by the lender.

The tenure for which loan is secured by the borrower is pre-decided by lender and borrower at the time of sanctioning of loan. Usually, the tenure of a typical home loan is 20 years because houses tend to be expensive. There are various charges that are involved in availing a home loan from the lender. Find below the list of these charges:

Friday, June 5, 2015

Mahindra World City - Mahindra World City, Chennai India’s first Gold Certified Integrated Business City

“Transforming urban landscapes by creating sustainable communities“– has been the mission of Mahindra Lifespace Development Limited.

Mahindra Lifespace Developers Ltd. - the real estate and infrastructure development business of the $16. 5 billion Mahindra Group, is a leader in sustainable urban development, through the creation of residential and integrated large format developments across nine Indian cities - Mumbai, Pune, Nagpur, Gurgaon, Faridabad, Jaipur, Chennai, Hyderabad and Bangalore. The Company’s residential & commercial development footprint includes over 0.8 million sq. m. (8.3 million sq ft.) of completed projects and over 1.0 million sq. m. (11.3 million sq. ft.) of ongoing and forthcoming projects.

Mahindra World Cities pioneered the concept of integrated cities designed to create a balance between Life, Living and Livelihood. These integrated urban centers are located near existing metros and comprise SEZs, Industrial Parks, Retail and Social Infrastructure.

Promoted in a Public Private Partnership by the Mahindra Group and TIDCO (A Govt. of Tamil Nadu Undertaking), Mahindra World City surpasses the conventional definition of a business space - it is a business eco-system, carefully linked and integrated to function with efficiency. Mahindra World City, Chennai is India’s first integrated City and Corporate India’s first operational SEZ.

Mahindra World Cities are serving as hotbeds of industrialization by attracting foreign businesses and providing Indian companies the environment to export, at the same time they are providing windows of opportunities to local economies. With exports generated in excess of USD 1 billion in FY 2013-14, our cities also focus on integrated modern living.

Etching its name on India’s business map, Mahindra World City Chennai, has attracted corporate giants such as BMW, B.Braun, Capgemini, Holiday Inn Express, Infosys, Ingersoll Rand, Lincoln Electric, Parker Hannifin, Renault-Nissan, Tesa SE, Federal Mogul, Fujitec, NTN Corporation, Timken, TVS Group of Companies and Wipro among others.

Planned as a single point destination for domestic and global companies, Mahindra World Cities include Special Economic Zones and Domestic Tariff Areas. At full stage of development, it envisions to generate direct employment for more than 2, 00,000 people. The Lifestyle Zone, located alongside the Business Zone, offers residences, schools, medical centers, retail malls, business hotels, recreation and leisure facilities, and wide open green spaces for a clean, healthy environment. Bringing life to the city is an environment replete with culture, sports, music, festivals and a lot more.

Mahindra World City Chennai, located on NH45, spreads over 1550 acres and houses more than 60 blue-chip companies across IT, Auto, Fashion and Apparel, etc. MWC Chennai partners with the Indian Green Building Council to become India's first "green township." It is a partnership with the State Industrial Development Body, viz Tamil Nadu Industrial Development Corporation Ltd (TIDCO).

Being one of India's fastest growing commercial and industrial centers, Chennai welcomes many global organizations to set up within its borders. Tamil Nadu, with a proactive state government and investment-friendly policies, has been at the forefront of attracting investments in India.

An international airport, two modern seaports and abundant skilled manpower, a huge talent pool of engineers, make Chennai the ideal destination of choice.

The Paranur Railway Station is the first station of its kind in India to be built in a Public-Private partnership. The Paranur station serves as a Gateway to Mahindra World City. Railways have become a preferred mode of transportation for a majority of the employees who currently reside at Chennai and the suburbs. Moreover, the railways serve as cost effective, efficient and comfortable mode of transport.

The residential and social amenities zone at Mahindra World City, New Chennai designed by M/s HOK, USA, won two international awards for the ‘Mahindra World City’ master plan from the American Society of Landscape Architects (ASLA).

Tuesday, June 2, 2015

Mahindra World City: A Green township that has aspired to achieve balance between Life, Living and Livelihood

Mahindra Lifespace Developers Limited, the real estate and infrastructure development business of the $16.5 billion Mahindra Group, announced that Mahindra World City, its integrated city in Chennai, has been India’s first township to be awarded with Stage I certification under IGBC Green Townships.

It was evaluated on four environmental categories as defined by IGBC which included – Site Selection and Planning, Land Use Planning, Transportation Planning and Infrastructure Resource Management and Innovation in Design & Technology.

Mahindra World City Chennai is a city of many firsts in the journey of sustainability. It has been a pioneer in commissioning an Off-grid solar power plant in the State of Tamil Nadu. Located in The Canopy, the 75 kw Off Grid - Solar power plant, has the capacity to generate 1, 16,000 units of clean electrical energy annually, offsetting almost 60 tons of CO2.

India’s first ‘Green Homes’ developer and one of the first companies to receive the ‘Platinum-rated' green homes pre-certification from IGBC, the properties enhances a sense of well-being that translates into better health, its design maximizes sunlight and cross ventilation translating into lower energy consumption and it uses building materials that enhance temperature insulation.

Rainwater harvesting facilities for the park and recharge pits to collect rain water are imperatives within the city with the companies within Mahindra World City having rainwater harvesting facilities within their campuses. A network of storm water drains has been constructed along all the roads and the entire run-off water from surrounding water bodies and excess rain is conveyed through the storm water drains into the Kolavai Lake.

Mahindra World City, Chennai has developed the best in class infrastructure to create an international destination that attracts global investors and generates economic activity and livelihood opportunities.

The business zone is classified into a Domestic Tariff Area (DTA) and three sector-specific Special Economic Zones (SEZs) for IT (Services and Manufacturing), Auto Ancillaries and Apparel and Fashion Accessories.

The ethos of Mahindra World City has been creation of a holistic ecosystem which not only nourishes business but also makes quality living inside the city a reality. The master plan envisages development of Social and Commercial Infrastructure to integrate work and living. The current developments at Mahindra World City, Chennai include multi format housing, railway station, school, hospital, hotel, commercial centre, club among others.

With excellent living spaces, amidst clean, green, natural environs, Mahindra World City has been built and designed with one simple aim - to make life better for its residents. Spread across 285 acres, the zone has been well planned to provide living spaces supported by modern social infrastructure to over 6000 families across diverse segments.

MWC is located on National Highway 45, not far from the airport, seaport and has a railway station. Nearly 15,000 people use the train services every day.

Mahindra World City is a budding destination for retail, recreation and leisure products and services, providing the perfect setting as a city extraordinaire. The master plan includes a hotel, a hospital, multiplexes, shopping malls, outdoor sports and common recreation centers. The City is located in a rapidly developing industrial and residential belt, well connected by road and rail. The retail and social zone of the City will cater to the people living and working in both the World City and surrounding areas.

MWC Club offers endless options for recreation, leisure, sport and fun that are designed for everyone. Whether it's swimming and lazing in the pool or pampering your senses at the spa while others enjoy playing a game of tennis, it is here at MWC Club that you can truly maximize life and experience the best.

This is a promotional post by Mahindra World City Chennai. If you would like to promote your projects, write to us at

Thursday, May 28, 2015

Detailed Guide: Finding and Moving to a New Home

Are you in your 20s or early 30s? And starting your master’s degree or settling in a new job or just got married, chances are, you have encountered this massive hunt. Yea hunt and we are talking about finding the right place to stay and live in a city of your choice. While real estate prices have boomed in major metros across India, and therefore, only option you are left with is to find a decent 1BHK or at most 2BHK apartment near your workplace or institute.

As easy as it may sound, the whole experience of settling in a new home is tedious to say the least. And when we talk about new home, what we mean is renting a home which is of right size, located close to your workplace and is in close proximity to commercial & institutional centers such as malls, hospitals, schools, etc.

So, what are the things one should pay attention to while looking to rent a home in a metro across India? How should I as a home seeker go about the whole experience? We list down the steps based on true experience.

  • Finding the right place
    • List down your ‘wants’ and ‘needs’
    • Search on Internet
  • Preparing to Move
    • Sign the Lease Agreement only after consultation
    • Hire a mover, it’s always worth it
    • Identify your unloading zone in advance
  • Packing Your Bags and Boxes
  • Setting Up
  • The D├ęcor


One can subscribe to the below Guide “The Most Jugaadu 1 BHK Ever” by Voucher Cloud that has tips and tricks for the young population in India which can help them select/buy/transform their 1 BHK into an awesome crib. Hope you will find this useful.

Tuesday, May 26, 2015

What shall I do if interest rates go up?

Sumit booked his apartment in a builder project in 2010 in Noida Extension. He booked a 4BHK unit measuring 2250 Square Feet at a base selling price point of Rs. 1950 per Square Feet. Prices were affordable and he was able to book the apartment within his budget:

Area of the Apartment (SqFt) 2250
Base Selling Price (Rs/SqFt) 1950
Development Charges (Rs/SqFt) 225
Car Parking (Rs) 150000
Club Charges (Rs) 100000
Interest free Maintenance Charges (IFMS) in (Rs/SqFt) 85
Final cost of the apartment (Rs) 5335000

Out of the required 53.35 Lacs, he arranged for 13.35 Lacs from his own sources such as cash, provident fund, and fixed deposits. Balance amount of Rs. 40 Lacs was availed from a leading bank in form of home loan. Home loan rates in 2010 were hovering at around 8 to 8.25%. Which meant his monthly payment in form of EMI was Rs 33458 for a period of 20 years. His home loan interest rates were of floating type. This meant whenever, RBI revises repo rates, home loan interest rates would go up or down depending upon RBI monetary policy.

Everything was going as per plan; however, as the inflation started to go up because of various macro economic factors, RBI started revising its monetary policy. The focus of RBI moved towards bringing inflation under control. And therefore, interest rates started moving up. From about 8% in 2010, the interest rates jumped to about 11% in 2014.

What it meant for Sumit was that his EMI outlays increased over a period of time. At one point of time, he was paying monthly payment of Rs 41288 in form of EMI. That’s an increase of Rs 7830 per month.

What can Sumit do to maintain his EMI under control?

  1. Stretch the loan tenure: Sumit had availed home loan for a period of 20 years. However, since, interest rates had moved up, he could sit with bank officials and seek to extend the loan tenure to 25-30 years. Thereby, he can bring his EMI under control.
  2. Move to another lender: Sumit can also move to another lender offering lower interest rates. In this case, he has to study and analyze the offers by various banks. And if there is a difference of about 0.5%, then, Sumit can switch to another lender to bring his EMI under control. However, he should check if there are any pre-payment charges with existing lender. As per RBI rule, customer can move from one lender to another without paying any pre-payment charges.
  3. Prepay portion of the Loan amount: Sumit can also prepay some portion of his loan amount to the existing lender. This way, his EMI would come within manageable limits.
  4. Avoid shifting to fixed loan rates: When interest rates are fluctuating, many people believe fixed rates are way to go about. However, fixed interest rates are more expensive and at the same time, one cannot take benefits of lower interest rates as and when RBI brings interest rates down. Therefore, Sumit should stick to points 1, 2, or 3 and should completely avoid point 4.

Thanks. Please share!

Friday, May 22, 2015

How is rent for residential property in India calculated? What are the basic components of Rent?

Are you a tenant looking to occupy a residential property? Or are you a landlord looking to earn income from your residential property? For both the parties, rent is the primary area of discussion before they enter into a lease agreement. How much rent shall be paid for a given residential property? What are the main components of rent? How much is the security deposit? What are the other monthly charges? How is security refunded back when tenant vacates the property? These are some of the questions we will discuss below in this article:

How much rent shall be paid for a given property?

Rent is the monthly payment paid by the tenant to the property owner for the use of property. A residential property is used by tenant for living purposes or for the purposes defined in the lease agreement. Any deviation in the use of property by tenant can lead to eviction. And what is the agreeable rent that tenant and owner can arrive at? Principally there are 2 methods:

  • Rent comparison method

It is the most common yardstick that is used by both tenant and owner for determining the rent of the residential property. This method is based on the ability of similar properties to generate monthly rent. For example, in a given locality, one needs to look at the rent that others are paying on a monthly basis. If properties in question are highly similar, then, one would expect the same rent for a specified property. However, if the properties are dissimilar, then monthly rent is adjusted. If the subject property is superior to other properties in the locality, then, chargeable monthly rent will be on higher side. And if the subject property is inferior to other properties in the locality, then, chargeable monthly rent will be on lower side.

  • Cost method

This is a method based on the cost of the property. Cost of the property is the sum of current market value of land + cost of construction. In India, rental yields for residential properties are not very high. Typically, a property fetches anywhere between 2-3% of annual return on the cost of property. For example, if the cost of property is say Rupees 1 Crores, then, expected yearly rent could be in the range of Rupees 2-3 Lacs Or in other words, Rupees 16000-25000 per month. One must take note of the fact that, this 2-3% annual rent is calculated when the property in question is fully developed or its FSI (Floor Space Index) is fully utilized.

What are the main components of Rent?

Monthly Rent for the residential property comprises of following elements:

  1. Base rent which is calculated by ‘rent comparison method’ or ‘cost method’.
  2. Utility charges to be paid by tenant as per actual. Utility charges include electricity bill, water bill, Gas charges.
  3. Maintenance charges. Maintenance charges are paid extra by the tenant.
  4. Security deposit – it is the lump sum payment demanded by landlord at the beginning of the lease. It is an interest free payment and is refunded by the landlord to the tenant when the property is vacated. However, if the property has been damaged during the tenure of tenant, then, landlord may hold some part of security deposit to cover the expenses. This is clearly highlighted in the lease agreement as well. Security deposit differs from city to city. In Delhi, security deposit is about 2-3 months of rent. However, in Bangalore, the security deposit demanded by landlord is around 10 months of rent.

It is imperative for both tenant and landlord to discuss these things well in advance and all the charges shall be clearly mentioned in the lease agreement to avoid any difficulties during the course of stay.

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Tuesday, May 19, 2015

What are the landlord’s rights and what precautions a landlord shall take before renting out a property?

Real estate is a lucrative investment class. Not only it gives you capital appreciation gains but at the same time one can earn rental income from his/her property. Whether the property you own is commercial or residential, one can rent the property to earn stable monthly income. However, as easy as it may sound, there are always issues when it comes to renting out a property. What if the tenant does not pay the rent on time? What if the tenant mishandles the property? What if the tenant doesn't pay the utility bills on time? These are some of the questions a property owner is confronted with and therefore taking precautions at the beginning of renting out a property will make sure that the property is rented out to good quality tenant.

At the same time, a landlord enjoys legal rights as laid down by the Transfer of Property Act, 1882. These are ‘Right to timely accrual of lease amount’, ‘Right to know about the condition his property is in’, ‘Right to know of any changes that the tenant might want to make’, ‘Right to notify the tenant of an intention to increase the rent’, ‘Right to be informed of any disclosures’, ‘Right to get back his property on repossession’, ‘Right to repossess the property complete with all fittings and furnishings’, ‘Right to claim all the charges for supplies’.

Therefore, before one rents out or leases his/her property to a prospective tenant, make sure to go through the following document about ‘Precautions before renting out’ and ‘landlord's rights’.

Thursday, May 14, 2015

Must-ask Questions Before You Finalize on a Luxury Apartment

Now, that you have decided to buy a luxury apartment, it’s important to invest your time and carry out the necessary homework around the luxury real-estate market. Firstly, the easiest way to do research is using the internet. There are many real-estate discussion forums and groups in social-networking sites such as Facebook or Quora, where you can post questions related to the luxury home market. All you need is basic networking skills, and you can easily evoke informative answers from “virtual” friends.

Apart from posting online queries, it’s important for you to have in-person interactions with people in real estate. For example, you can set appointments with sales people from various real-estate companies and get a quick view of the prices and deals.

Besides, it’s important to draw impartial advice from people who are experts in the market. In that respect, you may meet real-estate advisers, brokers and agents who are known to enlighten many on the market and share a few tips on finding the best deals in the city.

All the interactions, be they virtual or in person, will help you to avoid apprehensions about the big investments you’re about to make. However, there are ways in which you can prepare yourself and ask better questions to understand the market of luxury apartments.

Before the final plunge, let's quickly run through some common questions that come to everyone's mind…

  1. Is the project title clear? 
  2. Has the project got the required approval? 
  3. What is the total cost of ownership? What is the monthly maintenance cost?
  4. Which other costs are included along with the registration fee?  
  5. What are the highlights of the project? 
  6. How great is the aesthetic value of the building? Is the building design in sync with your concept of a luxury building? 
  7. What are the key amenities showcased by the builder? 
  8. According to you, what are the most desirable amenities of a luxury apartment?
  9. How good are the views from balcony and living room?
  10. Are concierge services available? 
  11. How far are the conveniences?
  12. Is the price affordable for you? 
  13. What’s the overall reputation of the builder in terms of deliverability, quality and finish?
  14. What’s the actual size of the house? 
  15. Is there a model apartment or an occupied flat that you can visit?  
  16. What is the compensation offered if the possession gets delayed?
  17. Is there an option to customize the interiors when the building is in construction phase?
  18. What are the luxury amenities provided by the builder? Are they at par with amenities in luxury projects being built by other builders?
  19. What is the overall prospect of the price trends in the given locality?
  20. What is the probable return on investment for the given project?
  21. If the apartment is already occupied, can you check the opinion of current owners about the property?
  22. How is the locality connected to other parts of the city? 
  23. Is there easy access to public transport facilities?
  24. Apart from the main features, what are subtle aspects of the project which make it unique? For example, the floor-to-ceiling height, common wall sharing, number of apartments in each floor or block, number of elevators in each block, fire safety precautions, etc.

Closing note...

Here is one suggestion to prospective luxury home buyers – don’t believe everything that sales reps say. Try to go beyond their words and the glossy brochures. Carry out a good research on your future home as the pay-out is big and it’s an important decision in your life.

This is a Guest post by Seema Mohta, who has over 7 years of experience within Real Estate Industry. She has worked with Various Real estate companies and has Good knowledge about property trends, Investment, Apartments in Sarjapur

Tuesday, May 12, 2015

Real Estate Investment in Kolkata

Investing in real estate is profitable in many ways. Property can either be rented out for a fixed monthly income or sold later for profit. However, most of the purchases consist of a considerable amount of money changing hands and it is advisable to check up on a few facts before plunging into any deal involving real estate.

  • Factors to consider when investing in real estate

Location has the biggest impact when it comes to investing in real estate projects in Kolkata. For e.g. the price of any residential project in a prime location is invariably much more in comparison to other projects. Proximity to schools, malls, markets etc. is something that buyers look for and this appreciates the value of an upcoming or ongoing project. So, the better the location, the higher the value of the property becomes.

There are many other points to consider. Any project which adheres to government regulations about building norms helps in increasing the value of the property by virtue of its trust factor. The main entrance of the project also plays a role in deciding the property’s valuation. A nice entry for a property can help in creating a good perception for a project as a ‘feel-good’ factor. Safety and security in the region and within the property is another important aspect to consider when investing in real estate.

The facilities that the property promises to provide must be looked into when the purchase is being made. This is especially important when dealing with residential projects or complexes as they have many features and facilities which can make a property attractive.

  • The rise in real estate investment in Kolkata

Kolkata has witnessed a gradual rise in property prices with more people gaining trust in real estate investments in Kolkata. More properties are being constructed to cater to the needs of the city and also around the outskirts of the city. This growth of the real estate market to an extent is dependent on the transportation facilities in the city. Kolkata features the most economical modes of transportation compared to the other metros in India. Recent developments include plans to extend the metro railway in Kolkata to facilitate connectivity across more regions within the city. This has allowed real estate companies to develop properties away from the main city as these regions will be well-connected after the completion of the project.

Most developers and real estate companies in Kolkata often adapt and follow model projects in other metro cities. Therefore, good planning of residential projects has been another reason why real estate properties in Kolkata are seen as good investment opportunities. Real Estate companies often try to attract buyers by offering gifts with the purchase of any property. Free televisions, cars and parking spots are perks that prospective buyers find worth the investment.

Real estate investment is more affordable in Kolkata than in the other metro cities. The prices for flats in residential projects are lower than those in cities like Mumbai, Delhi, Chennai or Bangalore. Also, the re-sale value of these properties provides a decent return for any investment. It is due to these reasons that investing in real estate properties in Kolkata is on rise.

This is a Guest Post by Anita Kedia

Friday, May 8, 2015

Luxury houses in India: Choose EMI over rent

Are you paying an enormous sum of money on house rent every month? If yes, ask yourself, that why are you letting your hard-earned money to go down the drain? There is no need to do that anymore! Now, you can select your dream home from various luxury houses in India by investing the same money on EMI. As per research, young professionals are seeking accommodation by buying luxurious houses in India on EMI basis. When the real estate market has a lot to offer then who doesn't wish to spend a little extra and raise their standard of living? Read further to discover how young India is investing in apartments in Chennai and other parts of the country.

  • Matching the demands of young professionals

When it comes to buying luxury houses in India, young, ambitious, and working professionals under the age of 30 are not looking for conventional choices. As per a survey, it was found that young adults wish to buy apartments in Chennai and other metropolitan cities. They do not mind investing in residential properties that are surrounded by greenery and situated on the outskirts of the city. The primary preference lies in high-rise buildings with required amenities.

According to the survey, it was also found that conventional residential spaces do not excite working professionals under the age of 30. The hunt is for owning a property that has a decent connectivity with the rest of the city, but the residential complex needs to offer something unique as compared to the other ongoing projects. A decent society needs to provide social comfort, as well as add to the intellectual quotient of the person. Keeping in mind the fast paced lives of young individuals, they prefer purchasing luxury houses in India that have a few restaurants and food joints nearby.

  • What real estate developers think?

Today, the real estate market is buzzing with modern and upscale luxury houses in India. They understand that the young prefer properties with greenery around. Having facilities such as schools, hospitals, groceries or supermarkets, works as an advantage. Since they are working individuals, they would require a well-knit local transportation from their residence to their workplace. Hence, real estate developers are designing homes where young people can choose between both comfort and affordability. Many luxury houses in India, especially apartments in Chennai are booming with an excellent social infrastructure, lifestyle shopping malls and health care centers. Most premium projects are coming up with a temple, swimming pool, Jacuzzi, spa, badminton and squash court.

  • EMI system is soon catching up with the young crowd

It has to be noted that when youngsters hunt for luxury houses in India and are away from their hometown, they avoid the conventional way of staying with distant relatives. Staying on rent turns out to be a huge hassle because you cannot make too many changes to the house as it is rented. For example, even if you would want to drive a nail into the wall, you would require permission from the owner. Banks have now made loan availability procedures easier as compared to the earlier times. The interest rates too have been brought down. These days, even real estate developers are providing low-down payments and EMI options with zero percent interest. In today’s times, owning an apartment in a contemporary housing complex has become a necessity as well as an aspiration for the urban youth. It has created a demand for quality housing and real estate developers are taking a note of this.

Nowadays, the topmost real estate developers of the country such as House of Hiranandani are coming up with the concept of environmentally-friendly buildings. They have lured potential buyers to invest in larger upscale projects with world class facilities. House of Hiranandani believes that young working individuals prefer innovative designs, classy infrastructure, and built-in modern appliances that save time and energy. Hence, they are working on developing luxury houses in India.

With young investors choosing to buy luxury houses in India on EMI basis, real estate developers are coming up with lucrative schemes for their housing projects. After all, every potential investor wishes to buy a luxurious home at their convenience.

This is a guest post by Deepak Yewle

Tuesday, May 5, 2015

Rahul Gandhi attacks Modi Government’s Real Estate Regulatory Bill. Is he right??

Real Estate Regulatory Authority Bill is facing tough resistance from the Congress Party. Congress Party Vice President has taken up the cause of middle class home buyers. Congress Party is of the view that the bill in its current state is anti-home-buyer and pro builder.

Last Saturday 2nd May 2015, about 200 home buyers who have grievances against builders met Mr. Rahul Gandhi at Congress Headquarters. The problems highlighted by home-buyers ranged from delay in deliveries of flats to shortchanging by the developers.

Congress opines that some amendments to their bill have been made which are pro-builders (Read here about Real Estate Regulatory Bill 2013 passed by Congress Government).

  1. Definition of Carpet area has been changed. As per the bill passed by the Congress party, carpet area was ‘net usable area’ in an apartment, excluding the walls. Now, it has been amended and the ‘net usable area’ will be ‘rent-able area’ as defined in National Building Code 2005 or its later versions.
  2. In the bill passed by Congress government, builders were not allowed to change the sanctioned plan once it was approved. Now it has been amended and minor changes are allowed by informing the buyer. 
  3. In the bill passed by the Congress government, it was difficult to get extensions on project deadlines. However, it has been amended now and builder can seek extensions‘…due to force majeure or under such conditions as may be prescribed, which may include issue of completion certificate, approvals etc. without default on the part of promoter…’
  4. In the bill passed by Congress government, a builder had to keep 70% of the money collected from home-buyers for the project. Now it has been amended to 50%.

Well, the points made by the Congress party are certainly in the interest of the home-buyers. However, we need to look at the whole picture comprising of Home-buyers, builders, and authorities.

Let’s take an analogy. A car comprises of fuel injection mechanism and exhaust mechanism. Fuel goes in the engine and burns and produces emissions. If fuel is of good quality and is mixed appropriately, then, we have a complete combustion and there are no toxic emissions.

As things stand today in real estate sector, we won’t get the solution if we focus only on the exhaust side. Because make no mistake, howsoever, we may try to fix the problem at the exhaust side, we won’t get the solution. There will always be toxic elements.

What we need to do is ‘fix the problem at the Fuel intake side’. And that means, taking into consideration all stakeholders including the builders, home-buyers, and authorities.

What are the ingredients for ‘Good quality of Fuel’ at the intake stage?

  1. Make Land acquisition process smooth and transparent.
  2. Digitize land records in order to eliminate title disputes.
  3. Single window clearances for realty projects. As things stand today, a developer has to take 40-60 approvals depending on the state. This whole process of taking approvals delays the project and increases the cost. By some estimates, project cost will come down by 20% if we have a single window clearance mechanism in place.
  4. Independence agencies to inspect the project during construction phase in order to make sure that project is being constructed as per the ‘National Building Code’.

Having the right Fuel at the intake stage will make sure that construction of the project is smooth and on time. There won’t be any discrepancies.


Saturday, May 2, 2015

Kisan in Demand! Are Political parties such as Congress, AAP, and others in opposition right in keeping Kisan a Kisan?

Kisan in Demand

In the name of Kisan, major political parties are organizing mega rallies. Congress Party organized a Kisan rally in Ramleela Maidan in Delhi on 19 April 2015. Aam Aadmi Party followed the trend and organized a rally on 22 April 2015. Gajendra Singh of Dausa (Rajasthan) died at an Aam Aadmi Party (AAP) Kisan (Farmer) rally in New Delhi on Wednesday 22 April, 2015. The rally was organized by Aam Aadmi Party and its leader Arvind Kejriwal against the Central Government’s land acquisition bill. Gajendra Singh, a farmer from Nangal Jhamarwada in Bandikui of Dausa district, ended his life by hanging himself from the tree during the rally. And as expected, the blame game and politicization of issue has begun. Well, what we are witnessing today is the recreation of ‘Peepli Live’ in Delhi.

Various theories are floating around as to why Gajendra Singh ended his life. Was it because of crop failure due to unexpected hailstorm and nonseasonal rain? However, local officials said crop loss in Gajendra’s area had been between 20-25%, far less than the damage in many other parts of Rajasthan. Well, investigations have been ordered by the home ministry and we will get to know the truth in coming days or weeks.

However, Gajendra is not alone in this battle. Suicide has spread like an epidemic among the distraught farmers. About 158,745 farmers have taken their lives since 2004 till 2013 and 86.5 percent of farmers who took their own lives were financially indebted.

Do these so Called Pro Poor and Pro Kisan Parties really care about Farmers issues?

Now, the question that needs to be asked from so called Pro Poor and Pro Kisan parties is, ‘Should the farmer remain tied to farming for generations and live in poverty’?? A closer look at the world data tells us the complete picture:

It is clearly evident from the Graphs above that rural population & employment in agriculture in India needs to come down to China level or world level. There are simply too many farmers working on the farm and they need to be put in industries to lift them up from abject poverty. To increase per capita income, to improve people’s livelihood, jobs and employments need to be created in a massive way. And Focus on Manufacturing can help in lifting millions out of poverty.

And the parties such as Aam Aadmi Party, Congress Party shall introspect and not oppose land acquisition bill just for the sake of opposing it. The bill must be debated and passed in a given time frame for rapid industrialization in India. Most farmers approach MPs and MLAs for jobs for their children in industries and not for working in farms. However, the very same farmers are incited by these parties for political gains. The focus shall not be on Bills in parliament; instead, the focus shall be on ‘how to lift people out of poverty’?

Land Acquisition Bill

In this political slug-fest, Land acquisition Bill has now become a hot potato. Congress, Aam Aadmi Party, Left, and Janta Dal have all united to oppose the bill in Rajya Sabha. Congress Party is in such bad mood that it is opposing the laws mooted by them in first place. They failed to deliver on those laws is another matter.

For moving millions out of rural areas to urban & semi urban areas, government needs to build capacity. And by Capacity building, we mean, developing industrial corridors, housing, roads, power generation, and irrigation. And all of this capacity building needs to be implemented at a fast pace because Kisan cannot wait for entire generation to move out of poverty and live a dignified life. 

In this context, Land acquisition becomes vital. Land is required for all these capacity building projects. India is in sweet spot at this stage among major world economies and domestic as well as foreign investors are willing to pump in the money to build infrastructure projects. However, land acquisition is major issue for these firms with many of them postponing investment in projects citing land acquisition problems. There are suggestions by some corners that these industrial enterprises shall purchase the land directly from the farmers. However, it doesn't seem feasible in India because of disputed land titles. And this is where Government has to step in to acquire land and then invite industries to build projects.

So, what are the main issues that Opposition Parties are against in the amended Land Acquisition Bill?

Till 2013, Land acquisition in India was governed by The Land Acquisition Act of 1894. However, following the controversies of Singur in Kolkata and bhatta parsaul in Uttar Pradesh, the UPA government in 2013 brought in a new bill called ‘Right to Fair Compensation and Transparency in Land Acquisition, Resettlement and Rehabilitation (RFCTLARR) Act’ to repeal the 19th century act. However, Industry players objected in unison saying the bill was too draconian and the bill will make sure that no land is acquired in the country thereby halting economic development.

After the NDA Government under Mr. Narendra Modi came to power, the focus shifted to industrialization in order to create jobs and economic prosperity. The new government decided to bring in following amendments to UPA Land Bill of 2013:

According to PRS Legislative Research these are:
  1. Excluded Acts brought under the RFCTLARR Act: According to the Act 2013, 13 Acts were excluded from the RFCTLARR Act but with the new ordinance they are now brought under its purview. Thus, it brings the compensation, rehabilitation and resettlement provisions of these 13 laws in consonance with the Act.
  2. Removal of consent clause in five areas: The ordinance removes the consent clause for acquiring land for five areas - industrial corridors, public private partnership projects, rural infrastructure, affordable housing and defense. The ordinance also exempts projects in these five areas from Social Impact Assessment and acquisition of irrigated multi-cropped land and other agricultural land, which earlier could not be acquired beyond a certain limit.
  3. Return of unutilized land: According to the Act 2013, if the land remains unutilized for five years, then it needs to be returned to the owner. But according to the ordinance the period after which unutilized land needs to be returned will be five years, or any period specified at the time of setting up the project, whichever is later.
  4. Time frame: The ordinance states that if the possession of acquired land under Act 1984 is not taken for reasons, then the new law will be applied.
  5. Word 'private company' replaced with 'private entity': While the Act 2013 stated that the land can be acquired for private companies, the ordinance replaced it with private entity. A private entity is an entity other than a government entity, and could include a proprietorship, partnership, company, corporation, non-profit organization, or other entity under any other law.
  6. Offence by government officials: If an offence is committed by a government official or the head of the department, then s/he cannot be prosecuted without the prior sanction of the government.
The Congress Party, Aam Aadmi Party, Left, Janta Dal are against these amendments. Recently, Rahul Gandhi in Parliament even termed the government anti poor and pro corporate.

Is Corporate really a Bad/Dirty word??

Citizens of this country answered in big numbers that we want economic growth by voting for Modi Government in 2014 elections. If Congress Party was Pro Poor, they would not have lost the elections so badly. Because make no mistake, the real power in India lies with poor. Now that poor has voted for Modi Government, the opposition parties shall introspect and not halt economic progress of the country.

Is ‘Profit’ a dirty word? Why would an industrialist take all the risks and set-up factories if ‘Profit’ be labeled as dirty? On the other hand, so called pro poor parties shall answer; is ‘Poverty’ a virtue? Since Independence, more than 65 years have passed by and pro poor parties are still shouting pro poor slogans. What did they do to lift poor out of poverty? Take a look at China & other countries and how they have successfully lifted millions out of poverty.

Ask any farmer from the Greater Noida (Noida extension region) about their land. And they all will tell you, that they are happy to sell their lands. Son of a farmer who was working for Rupees 4000 a month is now driving an Audi. Sanand in Gujarat has also witnessed such boom after Tata set-up their Nano plant. Manesar, Bhiwadi, Daruhera, and Greater Faridabad are other such examples where farmers have benefited from industrialization. As depicted in chart (employment in agriculture sector in India), millions of farmers need to move out of farms to work in industries for better livelihoods. Farms can simply not feed such a large population.

Market Place Economy:

We no longer live in a capitalist economy as termed by some Congress and Left members. Instead, we are moving towards market place economies. Anyone with entrepreneurial spirit can succeed. Capital is available for innovative business ideas and business models. Merit is the need of the hour and not doles. The more efficient or skilled one is, the more prosperous one grows. Therefore, keeping farmers on farms is nothing but hindering their growth.

Land Acquisition is an important legislation and must be communicated well by the central Government. It’s not about land acquisition; it’s all about removing poverty from India. Moving towards industrialization will mean more tax revenues for the government which then can be used for social welfare schemes for the benefits of poor.

The new Nara (slogan)

Jai Jawan Jai Industry

Author: Sachin Gupta LinkedIn

Friday, May 1, 2015

Power of Attorney in India

Power of Attorney is used in many real estate transactions in India. In fact, there are instances when people opt for Power of Attorney instead of the property registration to save on exorbitant property stamp duty and registration charges.

The literal definition of Attorney is ‘a person, typically a lawyer, appointed to act for another in business or legal matters’. Therefore, in real estate transactions, a typical Power of Attorney would mean one person authorizing another person to act on his/her behalf as a legal representative to make binding legal and financial decisions. The person who gives Power of Attorney is known as donor or Principal, while the person who receives the Power of Attorney is known as Agent or holder.

In Delhi, many real estate transactions take place on ‘Power of Attorney’. Since property circle rates in Delhi are extremely high, therefore, there are people who opt for Power of Attorney to save on stamp duty and registration charges. However, there are risks attached to such transactions in case the Agent or holder does not discharge his/her duties accurately and honestly. For example, if the Agent or holder defaults on EMIs on a given property, then, the Principal’s property may be taken over by the authorized bodies by issuing a SARFAESI notice and auctioned for recovery of dues.

More on Power of Attorney can be found below: