Every judgment went in their favor. But still the farmers, who gathered for the mahapanchayat in Bisrak village on Wednesday 20th July 2011, following the Allahabad High Court’s order that the Greater Noida Authority and real estate developers have to give back 600 hectares of acquired land to the farmers, were not just happy.
The reason behind their unhappiness is that the HC verdict does not talk anything about any remedy or gives direction. The farmers do not wish to take back the land as it cannot be used for any agricultural purpose in the next 10 years due to the amount of concrete that has already gone into it. Apart from this even the water table level has dipped from 30 feet to about 120 feet in the region.
The compensation that was offered to the farmers for the land acquired in the year 2008 and 2009 has already been spent on purchasing new land, on flats in Noida, on constructing their homes, on expensive cars and bikes, on lavish weddings and repaying debts. Most of them today do not have means to return back the compensation amount that they got for their land. In Patwari village the total land acquired was about 600 hectares for which over 450 crore was paid as the total compensation amount to the farmers.
That’s why the farmers yearn for a better compensation from the Greater Noida Industrial Authority and also wish that they should be made shareholders in the future development of the region. The farmers want that the compensation amount should be 50% of the money at which the real estate developers bought land from the authority. The farmers further added that under the rehabilitation policy, they want a fixed stake in the land price hike in the region for the next 33 years. Apart from this, they also want that the village land which was earlier acquired by the Authority should be given back to them on lease without any pre-conditions applied by the authority on the same.
The farmers said that they are not against the developments taking place in the area but they also want to become a part of the development taking place. They also want that good schools, hospitals and colleges should be set up for them in the area.
Out of the 600 hectares of land acquired in Patwari village only 15% of the land was allotted to developers. 15% was kept for educational institutes, about 15% was kept for IT parks and another 15% were marked for Noida authority plots. Remaining 40% was marked for infrastructural developments like roads, bridges, parks, and other public services.
Brig RR Singh, Director-General of National Real Estate Development Council opine that since the construction of the housing projects and external infrastructure development has already been started by the developers and the Greater Noida Development Authority respectively, and as a huge amount of money has been spent on the same, so the Courts should consider these factors so that the interest of all the stakeholders – the farmers, home buyers and the developers can be protected. He proposed that the compensation amount for farmers should be rationally raised and thus the authority can reacquire the land from them.
Developers whose projects have been affected due to this situation had a four-hour long meeting on Wednesday to work out a plan to handle the current situation. The developers stated that they have decided to return back the money to home buyers but only after the Greater Noida Authority opts to refund their money along with the amount that they spent on construction so far.
Although the people who have already bought flats in Noida Extension are not willing to take back their money. They want to own their homes. After the High Court’s verdict, the Noida Extension Flat Buyers Welfare Association, which has about 2,600 members, has decided to file a petition in the Allahabad HC to be made a party in the pending cases associated with Noida Extension so that they can also raise their issues in the Court and get a relief. GL Sagar, secretary of the association said that they don’t want refund. They want their flats. In the current real estate scenario, there is no other option available at this price. If they will take back the money then their dream of becoming a home owner will be shattered.
It’s a tough situation which requires deft handling by all the concerned parties to reach to an amicable solution to this situation
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Archive for NCR Region
Allahabad High Court scraps another Noida Extension acquisition
On 19th July 2011 another verdict was given by the Allahabad High Court that scraped another land acquisition in Noida Extension by the Greater Noida Industrial Authority. 589 hectares of land was acquired by the Authority in Patwari village, in Noida Extension, by bringing into play the urgency clause. The land was purchased for the industrial development in the region but it was given away to real estate developers for numerous residential and commercial projects.
This decision of the Allahabad High Court came after a fortnight following the Supreme Court’s order which defended the high court’s order regarding cancellation of land acquisition of more than 150 hectares in Shahberi village.
A division bench comprising of Justices Sunil Ambawani and S S Tiwari scraped the land acquisition stating that ther was no need to bring up the urgency clause. The court gave the verdict on a group of petitions filed by the farmers from Patwari village.
According to Parminder Bhati, the farmers’ lawyer, this decision of the High Court will surely bring respite to at least 1,600 farmers from the region. He further added that this decision will adversely affect almost 18 big and small developers who have launched or own the land in the area.
The court rejected some of the affidavits that were presented before him by the government lawyer. These affidavits stated that villagers have no objection to the land acquisition and have been satisfactorily compensated. Bhati told that the court ignored all these affidavits.
He said that some of the farmers in Patwari village had accepted compensation but a large number of farmers had refused to the same.
The land acquisition process in Patwari Village was initiated on March 12, 2008. But in September 2009, the Greater Noida Industrial Authority brought into play the urgency clause under Section 17(1) of the Land Acquisition Act, 1894 — which offers for abstaining from the right of a tenure holder to a hearing on whether he wishes to sell off his land or not — and acquired possession of 589.13 hectares of land on papers. The farmers’ counsel said that the physical possession of the land had not started by that time.
In the coming few days, the court would be giving out verdicts about alike petitions which comprise of at least eight more villages from Noida Extension where developers have launched numerous housing projects.
On 20th July 2011, the villagers from Roja and Yakubpur villages are expecting to get another verdict from the high court on the petition filed by them, following which the petitions filled by the village residents from Bisrakh, Itehda, Haibatpur, Ghanola and Malcha would be decreed. On 26th July 2011, the petition filed by the villagers from Dewla is expected to be decided by the high court.
In Noida Extension, 12 projects from 11 builders are affected that include:
- Supertech Eco Village
- Nirala – Nirala Estate
- Patel Group – Neo Town
- Arihant – Arden Arihant
- Eros group – Sampurnam
- Amrapali – Leisure Park, Spring Medows
- Panchsheel – Hinish
- Stellar- Jeevan Project
- Earth Group – Towne
- Paramount – Emotions
- Ajnara
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Supreme Court defends Greater Noida land judgment
The morning of 6th July 2011 brought new ray of hope for the famers of Shahberi village as the Supreme Court defended the judgment for cancellation of huge area of land allotted by Greater Noida Authority (GNA) to real estate developers. This decision of the Court has shattered the dreams of the developers of earning huge revenues as they had launched or were planning to launch new projects in the area.
A bench including Justices G S Singhvi and A K Ganguly sternly condemns GNA for granting approval to developers for illegally changing the land use from industrial to residential purpose and enforced a cost of Rs 10 lakh on the same. The bench also stated that the money will be spent to help poor litigants to fight their cause in Supreme Court.
The Bench rejected the pleas raised by the developers and the Greater Noida Authority and further added that the judgment given by the Allahabad High Court regarding cancellation of the possession of agricultural land in Shahberi village was right. The HC in its order had said that it was misuse of executive power and the purpose behind it was to deceive people as result it was indefensible under the Land Acquisition Act.
The developers who have been asked to abandon their projects include Amrapali, Ajnara, Supertech, Mahagun, Panchsheel, SJP Infracon and Gulshan Builders. The Greater Noida Authority has allotted 4 lakh square meters of land to these builders.
What killed the case of Greater Noida Authority was the transfer of the land in Shahberi village to these developers ahead of the Uttar Pradesh Government’s approval to its request to alter the land use from industrial to residential purpose.
The U.P. Government had purchased the land in Shahberi village for industrial purpose to plan future developments in Greater Noida. Taking into consideration the Collector’s report which shows that 185 farmers, who are the original owners of the acquired land, would be left homeless due to this land acquisition by the GNA, the bench repetitively asked the Authority to be sympathetic and understand the grief of the peasants.
What annoyed the bench was the transfer of the acquired land to builders that is barefaced violation of Land Acquisition Act and expecting an adverse judgment from the Allahabad High Court. It also stated that the authorities have to act only in public interest only where as in the current scenario the Greater Noida Authority was serving private interest and deceiving the purpose of public interest.
The developers reasoned the ruling by stating that they had no trace regarding the transfer of acquired land in their name without obtaining clearance before the change of land use from industrial to residential and wanted to defend the interest of thousands of investors and customers who have already put in their money in these housing projects.
On this plea, the Supreme Court said that it was the developers who were behind the scene when the Greater Noida Authority transferred the acquired land for residential purposes without approval.
A great model of land aggregation where all the parties i.e the govt authorities, the developer, the farmers and the home seekers would have benefited went wrong due to the greed and mishandling of the government officials.
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Real estate rating systems likely to introduce transparency
Crisil, the credit ratings agency, of late introduced the real estate ratings in India. The market analysts believe that this rating system will help customers to get complete information of the project before buying a house. It is likely to unleash more transparency in the Indian real estate segment and will be offering the details on a project-explicit basis. This rating system will work on the scale of one to seven stars once all available apartment options in the city are compared. The credit rating agency said that the system works on the information provided by a developer to them thus offering right to use varied information required for assessment.
The agency takes into consideration all the parameters set by them and then rates the project. After the builder agrees to the rating offered by the agency, then they go public with the rating and project analysis that will be free for end users. The parameters considered are the record of the developer, the infrastructure he is constructing, finishings, timely completion, cost overruns, pro-sales service, legal issues like property title, and project innovations such as green buildings. The agency will offer the rating of a certain project halfway through the project construction process and will have a close watch on the said project till completion, through which it can also be revised. Numerous rating agencies are introducing real estate rating systems. Fitch is the real estate agency that has been active since couple of years in the international real estate sector.
Discussing the necessity of such rating system and their practicality, developers opine that an overall evaluation of real estate projects will help end users to the best and spot class projects available in a particular city. Such real estate ratings should preferably offer a complete valuation of all project related risks that will influence the quality of the project. If these ratings are done meticulously then they will surely bring in more transparency in the Indian real estate system facilitating the buyer to take a more informed choice. This rating system will also work in the favor of the builders who mainly focus on quality and will present their standing in a different light. Normally buyers face scarcity of information when looking forward to buy a house but such impartial ratings will surely help them to finalize their decision. Even the real estate agents think that this is a very good system and an optimistic move towards introducing professionalism in the Indian real estate sector.
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2-BHKs sale creating new buzz in the real estate sector
Did you ever think that the smaller apartments will be selling like hot cakes?
In the present real estate scenario, the utmost demand is for 2 bedroom (2 BHK) apartments and the supply is going well along this demand. That’s the reason why few real estate developers are asserting that 55-60% of their current inventories of their ongoing projects are 2BHK flats.
Developers think that as today most of the home buyers are young salaried or self-employed people so 2 BHK is turning out to be the best ever moving option. They also add that as these first-home buyers are just starting their careers and marital life so adding 55-60% of 2 BHK apartments will surely boost the project sale.
The middle income group nuclear families are the ones who are creating the maximum demand for the 2-bedroom flats in the market. A 2-BHK home seeker normally comes from a middle-class salaried employee hailing crossways almost all sectors, including government employees, school teachers, or employed in the BPO, IT, banking and service sectors.
Some developers also opine that this section also comprises of middle-level self-employed professionals. A characteristic 2BHK home seeker is lured by the affordability tag that comes along with such apartments because the end user has to pay a lower EMI. He is expected to spend his life as in a nuclear family with small kids where they do not need a third bedroom so there is no need to add on the extra cost.
Many renowned developers active in the Delhi-NCR region were aiming at constructing luxury high end apartments but now they are concentrating on the smaller-units type. The young generation is staring out their life in their own dream homes as they know that their parents’ generation has retired in their own home. That’s the reason behind mushrooming of affordable housing projects in the National Capital Region of Delhi.
This is the same story elsewhere in Big metro cities like Bangalore, Hyderabad Chennai Pune, Mumbai where developers are targeting young mobile generation who have left their parental home back in search of better job opportunities in these big cities.
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Extra Tax levied on colonies and commercial units
The Municipal Valuation Committee (MVC) issued a report which recommends that quite a lot of colonies will be upgraded in Delhi. As result of this improvement the property tax rates of these colonies will increase.
The proposed plan of the Committee is based on the enhancement work done in these said colonies. Along with the colonies, commercial properties in the city will too have to pay increased property tax. The Municipal Corporation of Delhi (MCD) is working out a foreword that will be presented in the Standing committee of the MCD.
As quoted by the MCD officials, the first MVC that was presented in the year 2004 had positioned these colonies in various categories ranging from A to H. But the categorization of some of these colonies was lessened by a Hardship and Anomaly Committee created by MCD. According to MCD officials the proposals laid down the committee were put in practice and till date these colonies are disbursing smaller amount of property tax. But in its current report, the MVC-3 has rejected all the recommendations proposed by the Hardship and Anomaly Committee and brought back the suggestions made in MVC-1. Under this report, the residents of colonies who were enjoying the benefits after their category was let down, will have to pay increased property tax as their colonies will be upgraded as per the recommendations of MVC-1.
Almost 125 colonies in the city will be upgraded by one-type. Several irregularities came across these colonies. Since the year 2004, Delhi has witnessed lot of development but the MCD has not gained much in terms of revenue. This improvement process of colonies will surely help MCD acquire more revenue.
Commercial properties including five, four and three-star hotels, banquets, industrial areas will also have to shell out higher property tax rates. Five-star hotels will be paying the highest amount of tax as they have been made independent of their locations. Therefore, if a hotel falls in a category C location, the property tax that will be charged would be as per category A.
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Indian commercial markets anticipated to grow over corporate development plans
The present Indian economic scenario is finally showing a northward movement for the demand in the commercial real estate sector. Consecutively, the higher demand for the office space will also influence the sale in the residential real estate sector too. According to a market research, the first quarter of 2011 experienced a 20% increase (almost 6 million sq ft) in the demand for office market all over every potential real estate sectors in the country in comparison to the same duration last year. Almost around 27% of the total office space was absorbed in the National Capital Region of Delhi.
Market analysts opine that the Indian office market will carry on this growth graph in the coming years. With corporates reworking and introducing their expansion strategies nearly in all industry sectors, requirement levels and transaction rate are anticipated to continue the upbeat in the near to midterm. Although with momentous supply in the market, rentals are likely to stay under pressure except for Grade A office spaces in certain main micro-markets.
In spite of escalation in demand of office space, the rentals have not been raised as the market is viewing a good supply of quality office space in the area. This is actually a good news for the end user who is seeking for office space. The report further explains that as the demand levels have seen a rise but due to the high supply pipeline and ready availability of quality office space the prices have not experienced any undue increase. In a few micro-markets, elevated vacancy levels can lead to the development of some downhill pressure on values in the short to medium term. However, the values in the Central Business District (CBD) locations in cities like Delhi, Pune, Kolkata and Hyderabad continued to be constant where as cities like Bangalore and Chennai experienced development. The report also states that the office market in the country is likely to go on with the growth process with new opportunities coming in due to corporate expansion strategies.
The CBD of Connaught Place and surrounding locations in Delhi experienced improved attention from potential tenants in the first quarter of 2011. As compared to the earlier few quarters, there was no supply to the CBD in the first quarter. Analyzing the general shortage of new supply, a few Grade B buildings have started renovation plans in order to improve their amenities and get more tenants.
Gurgaon experienced an addition of around 0.85 million sq ft of new IT office space and about 0.47 million sq ft of non-IT office space. Transaction going ons kept on the higher side as compared to the other micro-markets with absorption confirmed at around 0.75 million sq ft in IT/ITeS and another 0.12 million sq ft in the non-IT sectors. Higher transaction activity and increasing tenant attention on SEZ developments paved way for the hike in the rental values by almost 7-8 %.
On the other hand Noida witnessed a lower office space leasing activity as compared to the previous quarter. A rising tenant focus in SEZ developments along the Noida-Greater Noida expressway is expected to enhance the transaction activity in the near term.
In Mumbai it is the Bandra Kurla Complex or BKC which is currently the “hotspot” for most corporates, MNCs and banks as compared to the rival commercial business districts of Lower Parel and Nariman Point-in the latter, lease rentals are currently between Rs 225 and Rs 250 a sq ft on an average. “Nariman Point buildings can only offer offices ranging between 500 sq ft and 3,000 sq ft but clients who want a floor space in excess of one lakh sq ft find it readily available in BKC,” they said.
In Mumbai Experts said that a decade ago. “Developers preferred to construct residential apartments due to quick sales at the under-construction stage. Eight of out of 10 files submitted to the BMC for approval were residential. But with growing businesses, there is going to be a demand for quality commercial premises in the Central Business areas,” they said.
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New registration law makes properties costlier in Delhi
The dream to own a home in the capital city is now going to be a costly affair as the Delhi Government has made up their mind to hike the registration fee for properties that fall in the bracket above Rs 50 lakh. According to this new rule, a home buyer will have to pay out 1 per cent of the cost of property as registration fee where as the earlier cap was of Rs 50,000 notwithstanding the price of the property. For example, if an individual is buying a property costing Rs 1 crore then he will have to pay Rs 1 lakh as registration fee, and likewise for a property of Rs 2 crores, one will have to pay Rs 2 lakh as registration fees.
Earlier, a minimal fee of Rs 100 was charged as a registration fee by the Delhi Government Authorities till year 1964. After 45 years, in the year 2010, the Delhi government introduced a ruling that differed between properties that costs Rs 50 lakh and more. The registration fees of conveyance deed, sale deed, gift deed etc. concerning to immovable property was hiked to be 1 per cent of the declared value of the property or the respective circle rate, whichever was higher, though, this was capped at Rs 50,000. But in case if the value of a property has not been declared then the registration fee will be Rs 1,000.
What this meant was that the properties that were priced below Rs. 50 lakh will be charged one per cent registration fee. On the other hand, for properties priced at Rs 50 lakh and more, a flat Rs 50,000 was charged as registration fee. This was sarcatic, as in first instance this meant that if one was falling under the more costly property bracket, one would in effect be charged with lower registration fee whereas if one was falling in the not so costly property bracket, one would be over burdened with 1 per cent as registration fee.
Property agents say that, “It is due to this cap that the registration fee was kept same for a property costing Rs 50 lakhs as well as a property costing Rs 1 crores or more”. On ground realities, it appeared unjust to a customer who buys a property costing Rs 50 lakhs and a customer buying a property costing Rs 5 crore would be paying the same amount of money as registration fee.
The Delhi Government apprehended this irregularity and resoluted to modify its ruling thereby doing away with the Rs 50,000 cap. With the cap no longer in existence, the registration fee for a property costing more than 50 lakh will be proportionally more.
One more reason that prompted the Delhi Government to reconsider the prevailing property registration law was its own state of apparently unending financial crisis. The city government is facing a financial crunch because of the over expenditure on the previous beautification and infrastructural development for the Commonwealth Games that were held in October 2010. Market Analysts firmly believe that this change will surely help the Delhi Government to generate more income from the property registration fee. The Delhi Government hopes to make an extra Rs 100 crores by waving of the upper limit in registration fees of the property.
The reassessment of the registration fees will also lend a hand in keeping a tab on the present undervaluation of properties in the city. The new property registration fee law will also be applicable for registration of documents including conveyance deeds, sale deeds, gift deeds, partition deeds and settlement deeds.
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