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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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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Register your property to become its legal owner
You can become a proud owner and start living in your dream home once you make full payment to the builder or the seller by means of home loan. In spite of this, to become a legal owner of the said property, you must pay the stamp duty and the registration fees applicable for the bought. The stamp duty and the registration fees varies from state to state.
Registering the property is the final step of the agreement done between the buyer and the seller. It is basically a full and final contract duly signed by both the parties involved and as soon as this document is submitted at the local registrar’s office, the buyer becomes the legal owner of his dream home.
DOCUMENTS TO BE CHECKED
The documentation for the registration of a property differs on the basis of the sale made, i.e., whether the property is directly purchased from the developer or is it a secondary sale. If the property in concern is under-construction then the purchaser has to get the property registered in good faith. The document verification process can actually be vast and prolonged.
A financial institution or housing finance company perform the verification process with due diligence prior to giving the final approval for the project and the housing loan. This process gets less complicated in case of a secondary sale as the first owner of the property has all the required documents in place for the registration of the property.
If the concern property is previously under lien, then the mortgaging company has its own set plan. The key documents required for the registration process are a copy of the buyer’s PAN card, photo identity proof such as a copy of the passport or driving license, and proof of residence. Apart from these documents you also need two witnesses.
If the concern property is from secondary sale then you need have all the documents related to the property like original title, conveyance deed, agreement of sale, no-objection certificate, occupation certificate and possession letter from the existing owner of the house.
The document registration related transfer, sale, lease or any other form of disposal of a property are done under section 17 of the Indian Registration Act, 1908.
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IT ready to increase premium residential segment
The Information Technology (IT) sector guided a major upheaval in the panorama of Bangalore. Development and conveniences were confined to certain parts of the city but the today the city has stretched out its arms and has started developing towards the suburbs and the peripheral areas. With commercial growth are on the horizons in the regions away from the main city, residential choices bounced in the area to meet the increasing demand. Market analysts elucidate this as the IT companies need commercial spaces with huge floor space to accommodate the large number of employees thus paving way for the growth of bigger office complexes specially designed to supply to their needs. These office spaces growth calls for huge piece of land and such land is available in the suburban and peripheral areas of the city. As majority of the IT companies are established in the outside peripheries, demand for residential alternatives heighten is the regions located near to these office developments. Few such new areas that are experiencing spurge in the residential and commercial growth are Koramangala, Bannerghatta Road, HSR Layout, Outer Ring Road (ORR), Sarjapur Road, and Whitefield. Growth of premium homes Conventionally, the major residential regions of Bangalore were by and large limited to Sadashivanagar, Vasant Nagar, R T Nagar, Malleswaram, Rajajinagar, Jayanagar, Vijayanagar, and Fraser Town amongst others. The residential alternatives available in these areas were typically standalone individual bungalows or houses and relatively very few apartment developments. Conversely, with the IT revolution, the city propelled as a foremost IT city in the country and the amiable climatic conditions and moderately affordable values experienced top IT organizations building their offices here. In addition to these commercial developments, an increased demand was brought about in the in the residential sector paving way for some of the major residential developments in the city across areas close to these office developments. Market analysts further added that the meaning of premium homes has witnessed a lot of changes in the precedent, and it will prolong to do so in agreement with modifications in the economy. For example, prior the premium apartments’ sizes vary from 1,600-1,800 sq ft in developing areas like Outer Ring Road and Whitefield, and villas were sized at 1,800-2,200 sq ft.
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HNIs, NRIs escalating demand for high-end homes
The Indian real estate scenario is experiencing an abrupt surge in the overall demand for high-end homes. Amid the exclusive aspects following this surge in demand is the increasing number of NRIs returning, first generation industrialists who are booming in their new set-ups, startup organizations and multinational companies employing emigrants for their growth in the country. Contrasting the previous scenarios, it is the buyers who are controlling the real estate sector now.
The demand mainly is around parts of the country where vast piece of land area is available thus making it promising for builders to provide an all-inclusive array of amenities that have not been heard about in any such housing project.
The demand from corporates for accommodation for emigrant employees has also called for the requirement for high-end homes constructed with international standards which these expatriate are used to. Apart from this, the corporates are also eager to pay lofty rentals for such properties to offer the precise ambience for such employees during their tenure in the country.
The boost in demand for such homes is majorly coming from the IT sector because of the improved connectivity levels and the accessibility of high-end homes in parts nearer to MNCs. In Bangalore, quite lot of villa projects are speeding up the construction process which are estimated to be around the price range of Rs 1.5 crores and a few more are coming up in proximity to Whitefield and Old Madras Road which is another indicator to the spurt in demand for high-end projects.
One of the biggest reasons behind this spurge is the keen interest of the investors who are keeping a tab on the rise in demand for high-end homes and the resulting rentals. Wherever enhanced connectivity options are visible and the vicinity is good enough, the demand keeps on increasing for such homes in the country.
Developers who are developing high-end homes state that most of the queries they get are from businessmen, senior corporate executives and high net worth individuals. Some of them are even keen to invest in a second home. Expatriates are also interested in buying such homes but due strict documentation laws, they normally choose to go for a lease rather than out-and-out buy.
As per the ruling of the Foreign Exchange Management Act (FEMA), nationals of foreign origin who are residing in India can invest in only one residential property once they get sanctions agreed upon by the concern authorities like the State government.
Foreign diplomats can buy and sell any property other than agricultural land, plantation property and farmhouse in the country with aforementioned approval from the Government of India. The payment should be made only through foreign inward remittances by the means of normal banking channels.
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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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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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Home Loan Pre-conditions for purchasing a land to build for residential purpose
Majority of financial institutions lend home loan to borrowers who are planning to buy a patch of land to build their dream home. Banks grant land loans to salaried and self-employed people and even to NRIs. These loans empower you to buy a residential piece of land.
WHAT KIND OF LAND CAN BE BOUGHT?
Banks do not offer land loans on an agricultural land. As per the guidelines laid down by the Reserve Bank of India, a land loan is specifically given for buying lands for residential means only. Few lenders have fixed set of norms under which the land should be located within certain municipal limits. Apart from this some financial institutions add on a number of restrictive clauses that demand the purchaser to start the construction process on the purchased land within a duration of six months to a year.
IS IT FITTING FOR YOU?
There are a lot of factors that affect a person’s choice of building his dream home on his own. One such factor is the price. Buying a piece of land and then constructing the house on it can some time turn out to be a less costly affair. Also, one can set the pace of construction as per wish to suit his financial conditions. Constructing the home oneself facilitates the owner to put into action his all creative ideas in design and color schemes. Apart from this one also has a liberty to put off main operating cost, enhancements and addition to a future date.
HOW DIFFERENT IS A LAND LOAN FROM A HOME LOAN?
The interest rate for a land loan is on a par as compared with the interest rate of a home loan. One cannot ask for income tax deductions on the interest rate paid for a land loan. But if a borrower converts the land loan into a home loan to get financial support for the construction purpose of the residential property, then surely he can get all the tax benefits available under the Income Tax Act. Apart from this, once a completion certificate is obtained from the appropriate authority, the interest rate paid on the loan is entitled for IT benefits.
DOWN PAYMENT
Borrowers who are looking forward to get a land loan have to pay a higher down payment amount. The loan-to-value ratio for land loan in the case of down payment often goes as high as 70%. Normally, an individual who opts to take a home loan has to pay for only 20% of the cost of property.
DOCUMENTS REQUIRED
It is always advisable to appoint a legal expert to check and verify all the legal documents of the plot in concern. Apart from this, one should also verify the layout drawing of the site as approved by the town planning authority, and no encumbrance certificate of the land. Other property documents that need to be validated comprise of original documents pertaining to ownership of land, revenue receipts, land records and tax receipts.
DOCUMENTS REQUIRED WHILE APPLYING FOR A LAND LOAN
Before the borrower applies for the land loan, he should have some documents in place which include original site ownership documents, tax receipts for taxes paid by the owner, layout drawing, revenue receipts , no objection certificate from society for sale and transfer of land, and no encumbrance certificate for the land.
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Borrow the correct amount of home loan to purchase your home
Banks are pursuing potential borrowers with their teaser interest rates and exclusive offers. The real estate scenario today is experiencing development of new projects all over the country and builders are engaged in pushing their completed projects at good prices.
BORROWING CORRECT AMOUNT
In the current economic scenario, most of the people who are buying homes are young, salaried IT employees, professionals, entrepreneurs and self-employed businessmen. Real estate has always been considered as lucrative and prudent investment option. The present generation has bought down the age of purchasing homes. The average age now is 28 -34.It is not like 20 years ago when most of the home buyers belonged to the age group of late 40s, who used all their savings to purchase a property. Today, the times have changed, the young generation is well traveled and more dynamic , and they are also being helped by the different financial institutions that have made home loans a far easier process than in the olden days.
The important thing to remember for taking a loan is not to extend the finances beyond a certain limit . The real estate market has product for every pocket i.e from economic affordable housing to ultra luxurious lifestyle condominiums and bungalows. The thing to remember is A bigger amount of home loan means that the borrower will have to pay higher amount as EMIs.
The banks are ready to give home loans of about 50% to 55% of the borrower total monthly take home salary after doing their own due diligence of the clients credit worthiness. Individuals of today are intelligent enough to understand their monthly expenses of their household. Market experience shows that not more than 30% -35% of your monthly income ( whether individual or combined) should form part of your EMI. As you move along in life various other needs keep cropping up like education and upbringing of children , medical expenses etc plus the inflation factor is always there.
STAY AWAY FROM DEBT CON
One needs to keep in mind also that when interest rates increase, the home loan borrowers who have opted for loan have to pay increase EMI installments. If one has not been prudent enough while taking a loan and has taken a bigger amount of loan then in some cases one has to make drastic changes in their day-to-day life and can even have to do away with their current lifestyle, luxuries, periodic investments and saving for emergencies. As mentioned above The amount given by the banks or the financial institutions as home loan results in an EMI and if EMI becomes more than 40 % of the borrower’s total monthly take home salary. The thumb rule suggests that it becomes hard for the home loan borrower to pay back to the financial institution. When borrowers are not able to pay back their EMIs, they end up taking some more loans to repay their previous loan. This taking of more loan to repay the previous loans is not advisale as it might drag a borrower into a vicious circle of debt trap
So the mantra which really everybody of today generation knows is to borrow right and tight. In today’s market scenario there are home options for every pocket.
And yes do remember “OLD is GOLD”, so do not hesitate to take advice of your elders and well wishers,. You will not loose anything, on the contrary will only gain from their experience.
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