Here is all you must know about the new amendments in the Indian Real Estate sector in 2016:
1) Real Estate (Regulation and Development) Act, 2016
This bill was passed by the Parliament on March 15, 2016, and the Act came into force on May 1, 2016.
From a common man perspective, it was meant to address some of the pain points of a typical property buyer:
- What is the recourse when a project hand-over is delayed by the builder/promotor?
- How does one verify that a specific property meets the statutory norms as set by the local civic bodies?
The “Akrama-Sakrama” scheme has been in and out of the news for a while now, from when it was first introduced by the Karnataka government in December 31, 2013, to when Public Interest Litigations were subsequently filed against this scheme, to the present, when on December 13, 2016, the High Court dismissed all pending cases against this scheme. This has now paved the way for the Akrama-Sakrama scheme to be implemented throughout Karnataka. This article aims to shed some light on this scheme, and what it means to the common man.
RealDocs’s Co-Founder & COO Mr. Nair was invited for the Talk Show “Square Feet” on ‘94.3 Radio One’ to share his expert opinion on Property Verification and related documentation. Mr. Nair explained how RealDocs App simplifies real estate legal documentation, it educates the property owner and buyer in identifying the missing gaps, and provide support for their Property to remain compliant to the latest statutory norms. Mr. Nair also answered some of the most frequently asked question (FAQ’s) of the buyer, like What are the “must check” documents before buying? What you should know about khatha document? and many more such questions. Read More
The Government’s recent move of demonetization [of Rs.500 and Rs.1000 notes] has been termed by many as a “surgical strike” on black money. Since then, there are rumors floating around that “Benami” Properties would most likely be the next “target” under the government’s agenda.
In this blog, we have tried to put this in the right perspective.
So, what is a “Benami” Property?
To recap from our last blog article, a Benami property is one where a property is paid by one person, and that property is registered in the government’s records under a fictitious name. Hence the term Benami – “without name”. Read More
Real Estate sector is evolving at a tremendous pace after the introduction of the Real Estate Act, 2016 and the Goods and Services Tax, Act. Adding steam to this is the new add on to the platter, the Benami Transactions (Prohibition) Amendment Act, 2016 (“Benami Amendment Act, 2016”). The first question that strikes our mind is why there is so much buzz about the Benami Amendment Act, 2016, when we already had the Benami Transactions (Prohibition) Act, 1988 (Benami Act, 1988) in force?
The Benami Act, 1988 was framed with the objective of banning transfer of benami properties and recovery of such properties. However, the act failed to achieve its purpose due to the absence of a clear definition for benami property and the lack of defined procedures for the strict implementation of the Act. This gave immense discretionary powers to the authorities and consequently, it was bluntly violated. Hence the need was felt to bring about a more stringent law to help bring an end to tax evasion and laundering of black money.
Whether anyone denies it out rightly or accepts it boldly, hard reality is, whenever we talk about property transactions, context of black money and white money come into picture.
The Prime Minister’s announcement on the demonetization of Rs. 500/- and Rs. 1000/- has impacted all spheres of life tremendously. As far as realty is concerned, the historic announcement on November 8th, 2016, changes the holistic view of the real estate market. It is an open secret that a lot of black money has been invested in realty. One may wonder how it can escape being traced. Let us look at a simple illustration. “A” wants to buy a property “X” from “B”. The price agreed between the parties is one crore, while it’s market value [value of the property as evaluated by the Government] is 75 Lacs. This makes it possible for “A” to show the price in the sale deed as 75 Lacs and pay applicable stamp duty and registration fee on that amount. “A” now pays “B” the balance amount of 25 Lacs, in cash. So the sale is concluded for one crore although the documents reveal the sale price as 75 lacs.
Real estate is widely recognized as a booming sector that helps economic growth. The sector offers good opportunities for investment and possibilities for earning profits. The demand is good both in commercial as well as residential sectors. In order to meet this demand and attract customers, builders often come up with different types of lucrative offers.
Before blindly going by these offers, it is good to be vigilant and evaluate a property based on various aspects. In this article we have covered the sanctions and approvals required for three types of properties, i.e. Apartments, Villas and Independent Houses in their pre construction and post construction phases.
As is obvious from the title, our attempt here is to make our readers aware of the things they should look into before buying a property, and equally important, what they should remember after they buy the property. Let us jump straight to the first part of the subject, “Points To Remember Before Buying A Property”.
Whether you are buying a property for investment purpose or for own stay, it needs to go through certain evaluations and checks to mitigate any possible risk before one takes the final call.
We hope the points discussed in this article, would benefit you in making your next purchase.
Identifying a property to buy, is indeed an all-consuming endeavour. After crossing this hurdle, the next herculean task is to make sure that your investment goes through in a systematic and diligent manner. This not only safeguards your investment but also secures your future interests arising out of this property.
Always remember, when you pay the advances towards purchase of a property, the first thing you are required to do is to execute an “agreement to sell” with the seller. This agreement to sell document should record the total consideration or price, and advances agreed to be paid for the property. If it is an ‘under construction property’, the builder may ask you to sign two documents i.e. Agreement to Sell and Construction Agreement. By signing these documents, you agree with the terms and conditions set out there. However, most of us don’t read these documents carefully, or rather, we don’t know which are those essential clauses which need to be specifically looked into.
What does it mean when one refers to “evaluation of a property”?
A property needs to qualify against certain parameters to hold a marketable competence in the reality sector. Before we decide to invest in any property, it is important to know what are the essential parameters based on which it could be evaluated. In a more generic sense ‘Evaluate A Property’ means assessment of a property to determine the risk factors involved. This assessment help us to analyse and determine whether to invest in a particular property or not.
Parameters for evaluation are broadly based on location, sale price, payment schedule, delivery of possession, legal sanctions and requisite approvals obtained for the building and the clear marketable title of the property itself. Read More