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prelaunch is uncertain proposition

Posted: 06 Dec 2012 02:51 AM PST

Accommodation Times News Services
By Dr Sanjay Chaturvedi

The pre launch rates are cheap and it is before an official launch of a project. Brokers and agents active for a builder through the dynamic and glamorous marketing team of builders lure the first phase of selling the project in pre launch rates. In entire India, pre launch norms for booking in a projects is catching fire because builders promise to give lower rate and on launch increase the rates. No buy backs no guarantee and no documentation.

Property purchasers have stuck their hard earned money in many such projects. Fly-by-night operators are active and even without any clearances of plans or full acquisition of land and FSI, pre launch offer are flooding the real estate market. Many projects are stuck becuase of various reasons like for example Man Infra project at Mira Road. At the time of booking at pre launch offer, Man Infra took Rs.3800/- as booking and after three years also the project did not start. Man Infra through its sales agents is offering to buy back the booking at Rs.5200/-. The interest free money through such pre launch is in offing where builder want of funds pre launch projects without any NOC, Land or clearance. Uses the money and after years return back the money with 12% simple interest and see a huge capital appreciation. At the time of need of funds, pre launch are taken and at the time of delivery, return the advances and starts a new booking for the same project.
Bakeri in Ahmedabad allotted NA plots 4 kms away of original land as promised after two and half year of booking and taking money. Such pre launch are dangerous and uncertain. It will be without any paper, without any agreement and without any guarantee. In NCR, almost 60% of the projects are going slow for want of funds.
The same old story of builder is happening again. Short term borrowing and long term investment. The working capital and advances from projects and pre launches are invested in lands for future constructions.

A very risky proposition, pre launches are like sitting on barber’s chair and his razor on your neck.

Posted on 06 Dec 2012

world heritage status to western ghats ruins second home plots

Be-aware! Second Homes plots buyers will be in trouble if they buy plots or land or bungalow or farm houses in the region of Ratnagiri and many parts of 200 kms radius of Mumbai. Starting from Yeur Hills till Shahpur, Murbad and many parts of Mahad and Mangaon are likely to be declared under Heritage status. That means nothing can be done nor any development can take effect in these regions. All the transactions will be void and null after the declaration. Many parts of land in Shaee and Kalu will be effected due to proposed Dams in these areas. The water may eat away your hard earned money you are investing in second homes and plots schemes.
While environmentalists are rejoicing that constant international scrutiny will curb amassment of forest wealth by vested interests, the state governments have given a guarded reaction. Skeptics are of the view that the tag willmake little difference to many ecologicaly destructive projects that have been implemented or are proposed in the Western Ghats.
Experts and legal professionals are advising clients not to purchase land these areas.

The World Heritage status could have implications on development in and around these sites as UNESCO prescribes creation of additional buffer zones around the natural world heritage sites and putting in place an overarching management authority for conservation of the selected 39 serial sites.  Conservationists also fear a mad-rush to these sensitive areas in the guise of eco-tourism. “This might trigger commercial activities in the Western Ghats, followed by construction activities like building roads, structures, power lines and other infrastructure, which will defeat the purpose of protecting the green cover and habitat protection,” says an activist associated with the Kudremukh Wildlife Foundation in Karnataka.
The Western Ghats expert Dr. Madhav Gadgil has welcomed the UNESCO gesture and said “It will hopefully strengthen the Acts like Biological Diversity Act of 2002, which empowers the local bodies like panchayats to take appropriate steps for conservation.”  The participation of locals is going to be crucial in determining the success of conservation efforts and promising sustainable development.
All along the Western Ghats in five states, there are lakhs of tribal people who have made their homes in theghats. The Thodas of Nilgiris, Soligas of BR Hills, Malekudiyas of Belthangady, Halakki Vokkals of Uttara Kannada, the Sidhis of Kumta, Paniyas of Waynad, Kattunayakans of Malabar and many others in Goa and Maharashtra are some of them. The Perspective Plan for Protection of Biodiversity 2001-16 states that “tribal communities are part of the biodiversity and the state governments should not take them out of their natural surroundings, but empower them democratically and let the government facilities go to them.”
The ground situation for people’s participation in development is conducive in most parts of the Western Ghats.The region has some of the highest levels of literacy in the country, and a high level of environmental awareness. The democratic institutions are well entrenched, and Kerala leads the country in capacity building and empowering ofPanchayat Raj Institutions. Goa has recently concluded a very interesting exercise, Regional Plan 2021, of taking inputs from Gram Sabhas in deciding on the land use policies. Evidently, Western Ghats are an appropriate region of the country to attempt to make the transition towards an inclusive, caring and environment friendly mode of development.
Posted on 11 Jul 2012

seac put on hold rental housing projects since sept

Posted: 03 May 2012 06:04 AM PDT


By Accommodation Times Bureau

Mumbai: Since September the State Level Expert Appraisal Committee (SEAC)  put on hold several rental housing projects placed before it for the mandatory green nod, citing the massive density arising out of the very nature of such mass housing projects.
 As per the reports the panel hasn’t approved a single rental housing project since September 2011 so far.
However, according to the norms of town planning the standard density is 400 tenements per hectare. So under this rule approx 400 families can live over one hectare. There are several projects are not meeting the SEAC benchmark like most of them has crossed the standard density by five to fifteen times.
In the last meeting panel has rejected the environment clearance to two projects located in Panvel such as the 16-acre Arihant Akanksha and 28-acre Indiabulls Greens — for having a density of up to 2,000 houses per hectare. Adding to this pending list there is huge list of projects similarly there is high density project by Darvesh Properties in Mahajanwadi (Thane), Pranshu Developers in Nilje village (Kalyan), Dhariwal builders at Kolke village (Panvel), a project each by Square Feet Builders and Dosti Friends Development Corporation at Manpada (Thane), among several others.
Posted on 03 May 2012

housing crisis to end in 2012 as banks loosen credit standards

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.


The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generate actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

Posted on 26 Mar 2012

cut in crr greeted by realty sector

By Accommodation Times Bureau

Reserve Bank of India’s decision to cut in Cash Reserve Ratio (CRR) realty sector has warm welcomed it.  The move will help to get better the liquidity position of all sectors including realty sector, as well as cited that interest rates should be reduced to shoot up the housing demand.
The cut in CRR will bring in liquidity, which will help to falling real estate sector.
In its 3rd Q review of the monetary policy RBI has injected Rs 32,000 crore into the system by lowering the CRR by 50 basis point.
Pradeep Jain, Chairman, Parsvnath Developers Limited and Chairman, Confederation of Real Estate Developers’ Association of India (CREDAI) said that, “RBI, in its Credit Policy Review has attempted to do a delicate balancing act between the need for growth and urgency of containing price line. In the end it has acted with caution by keeping all rates unchanged and just by reducing Cash Reserve Ratio (CRR) by 50 bps. The tokenism has seen release of Rs 32000 crore for the banking sector to lend. After the negative impact created by thirteen continuous rate hikes, this will prove insufficient to boost the growth. “
Proper Equity has recently reported that 45 per cent of the housing projects in NCR, Mumbai and Bangalore are facing delays due to the paucity of funds and lack of demand.
Posted on 11 Mar 2012

benefit of house rent payment for salaried receiving hra

Posted: 14 Nov 2011 12:38 AM PST
HOUSE rent allowance, or HRA, is a major component of your salary. This is given by an employer to an employee to meet the cost of renting a home. As a salaried employee you can claim a tax exemption on such an amount. But there are certain conditions that you need to understand to claim such exemptions.
How is the exemption on HRA calculated?
The tax exemption on HRA is computed as the minimum of following three conditions: i) Actual HRA as per you pay slip; ii) 40%/ 50% of your basic salary; iii) The rent amount minus 10% of the salary
If you stay in a metro —Mumbai, Kolkata, Delhi or Chennai — your HRA would be 50% of your salary. In other cities/towns, it would be 40% of salary. For example, if your salary is Rs 40,000 and you live in Mumbai, HRA would be Rs 20,000 (50% of the salary). Let’s assume that you a pay a rent of Rs 15,000. The amount of rent paid minus 10% of the salary is Rs 6,000. The least of these is Rs 6,000, which would be taken as the HRA exemption. Hence the balance (i.e. rent minus HRA exemption) Rs 9,000 will be taxed.
When can you claim exemption on HRA?
You can claim exemption on rent given to parents. For example, you live with your parents and pay them rent. This would technically make your parents the landlords. In such an case, one of your parents should declare the rent paid by you in his/her personal income tax return to prevent litigation in future. However, you cannot claim exemption on rent paid to your spouse. Tax experts say that the relationship between a husband and wife is not commercial in nature and they are supposed to stay together.
You should provide your employer with accurate rent information so that the company can credit you with the eligible amount of relief before deducting tax at source. Another alternative is that you can also claim such exemption when you file the tax return and seek a refund.
If you receive HRA for the period during which you were not occupying a rental accommodation, then you can’t claim any tax exemption. In all cases it is advisable for you to maintain rent receipts as they are the only proof for rent payments.
Is your landlord an NRI?
According to Section 195, all Indian income of an NRI is subject to TDS. This rule applies to rent too. Any resident Indian is subjected to TDS for rents of over Rs 1.20 lakh per annum. “But if you have rented a house from an NRI landlord, the onus is on you to deduct tax at source and pay it to the government. The TDS is a flat 30.9%,” says Vaibhav Sankla, executive director, Adroit Tax services.
When can you enjoy the twin benefits of home loan and HRA?
If you have taken a home loan to buy a house, say, in Mumbai, but you reside in another city, you can get tax benefits on your housing loan.
If you have bought a house but stay in a rental accommodation in the same city because your house is not ready for possession, you are entitled to tax benefits on HRA. “You can claim tax benefits on the home loan only if your home is ready to live in during that financial year. Once the construction on your home is complete for possession, the HRA benefit stops,” explains Mr Sankla.
However, if you have bought a house by taking a home loan and stay in a rented accommodation after giving you house on rent, you will be entitled to all the tax benefits mentioned above.
Rent-free accommodation vs HRA
The government had announced the new perquisite rules in December 2009, which are effective retrospectively from April 1, 2009. The value of the perquisite determined in case of furnished accommodation is 10% per annum of the cost of furniture if owned by the employer. In case of hotel accommodation, the perquisite value is to be determined as 24% of the salary paid or payable or actual hotel charges paid by the employer, whichever is lower, for the period during which such accommodation is provided to the employee.
So under the new rules, should one opt for rent-free accommodation or claim exemption on HRA? You should take a decision keeping in view your requirements, salary level, perquisite value and the tax impact.
Courtesy : Taxguru
Posted on 14 Nov 2011

no property transaction on poa sc

Posted: 18 Oct 2011 05:09 AM PDT
The real estate sector is now under pressure following to Apex court’s latest judgment regarding the immovable property. The Supreme Court has ordered that any deal or transaction of immovable property will be considered as “illegal” through power of attorney (POA) unless the case is “genuine”.
According to market analysts argued that it is very difficult to point out the market size of POA deals, on the other hand several other sector watchers “especially in Delhi northern India 70 percent of the property deals are could constitutes.” The Supreme Court has alleged that there is extensive use of POA to transfer of Properties in the national capital, Punjab, Haryana and Uttar Pradesh, to put a stop to the practice and check generation of black money.
Realtors are used to use POA extensively from last several years it has become a trend in real estate sector to avoid taxes, thereby generating black money.
According to market experts as well as northern states, slum re-development properties and housing boards in Maharashtra have also seen significant levels of POA transactions. Huge number of real estate deals has done through POA. They added that, POA is also the common way to get done the slum redevelopment properties and housing boards in Maharashtra have also seen significant levels of POA transactions.
In the aftermath of the judgment huge number of property transactions will be severely changed, the number of transactions is unlikely to be impacted, early assessment suggests.
source - accomodation times
Posted on 18 Oct 2011

government should be facilitator instead of regulating

Satish Magar, President CREDAI Maharashtra
SC. Is the new ULCA in making?
SM : If you look at various reforms, land reforms need urgent government policy. The government need to play a role of facilitator. Let the market forces decide about the fair market value of land. Nobody is forcing land owners to sell. Its a fair deals.
We need land for urbanisation. We need land for public purposes. The density of population is increasing. Mcsensy report have said that we will have 60% of population in urban centres. Hence we need land, if not then government should give us cross subsidy by enhancing the FSI. If MHADA can have 2.5 FSI why not private developers?
SC : Do you think government’s cross subsidy will help ease the land holdings?
SM : I am saying that we give 36% of total earnings as taxes to government which includes VAT, Service Tax, etc. . If government subsidies the norms in FSI it will reduce the burden of land purchase in urban centres. If MHADA can have 2.5 FSI why not private developers?
SC: Can we restrict inflation in land prices?
SM : As I Said, government should cross subsidies the land or FSI, let the market be free for all private deals. I am not talking about government’s indulgence into land purchase of public purposes but let the economy be free for natural market forces. Why private land deals needs supervision?
SC: What is the principle arrangement between Magarpatta Company and its stock holders?
SM : We had given shares to land owners according to the proportionate shares of land. We had a very transparent system of corporatised land holding pattern. We developed the twonship and all the land owners are share holders of the company. The system worked.
SC: Since you have completed Magarpatta Ciy and started giving possession of Nanded City, what is the demand for and what type of people buying homes from you?
SM: 2 BHK is much in demand. We constructed 1 BHK just for statutory requirement but the demand is less. Young and second generation buyers are purchasing and they are having great taste for the real estate.
 
sources - accomodation times new letter
Posted on 08 Aug 2011

hafa short sales pass

Monday, August 8th, 2011, 12:11 pm

Servicers completed 10,438 short sales through the government's Home Affordable Foreclosure Alternatives program since it launched in April 2010, according to the Treasury Department.

HAFA was designed to provide an incentive to servicers for completing short sales and deeds-in-lieu of foreclosure for loans that fail out of the larger Home Affordable Modification Program. Through June, servicers started 21,412 short sales and DILs, up 20% from the month before. A total of 10,754 were completed, up 25%.

JPMorgan Chase (JPM: 34.06 -9.41%) is the programs leading performer, completing nearly 3,600 through the program, including nearly 1,000 in June alone.

Wells Fargo (WFC: 22.93 -9.04%) was second, completing more than 3,100 since the program launched and roughly 700 in June.

Bank of America (BAC: 6.51 -20.32%) completed 1,873 HAFA transactions, an increase of roughly 200 in the month.

Pam Marron, a senior loan officer with Gold Start Mortgage Financial Group in Tampa Bay, Fla., said more and more homeowners in negative equity view a short sale as their only way out. Many, she said, are defaulting because banks require them to do so in order to qualify for a short sale.

"The growing problem in Florida is the alarming increase in the number of short sale listings that are coming onto the market. These people are still employed but severely underwater and are having to short sale because they are not able to pay the vast difference owed between the mortgage amount and the value of these homes," Marron said. "Banks are requiring homeowners to default in order to qualify for the short sale."

In 22% of the HAFA agreements started — equal to roughly 4,700 mortgages — the homeowner began a HAMP trial but later requested a HAFA agreement or was disqualified from HAMP.
 
Posted on 08 Aug 2011

1 million foreclosures delayed until 2012

An estimated 1 million foreclosure-related notices for defaults, auctions, and home repossessions that should be filed by lenders this year will be pushed back until next year, according to the latest report by RealtyTrac.

While the delays could give home owners more time to catch up on their payments and try to avoid foreclosure, housing experts warn this means the looming shadow inventory of distressed properties likely will continue to plague the real estate market even longer.


"The best-case scenario is we don't get back to normal levels of foreclosure activity until 2015, which means the housing market recovery gets delayed by at least a year," says Rick Sharga, a senior vice president at RealtyTrac.

Posted on 26 Jul 2011