Developers cannot advertise their under construction projects from May 1 2017, once the Real Estate (Regulation & development) Act (RERA) will come into force across the country from May 1, 2017. However, if they have projects that have already obtained completion and occupancy certificates, those can continue to be advertised and sold.
However, the good news is that many states have already created an interim authority and are ready to receive applications from Builders and agents. This includes Kerala, Maharashtra, Punjab, Rajasthan, Mizoram, Haryana, Delhi, Andaman & Nicobar Islands and Chandigarh.
Many others are in advanced stages of being closed. This includes Orissa, Bihar, Jharkhand, Assam, Tamil Nadu, Andhra Pradesh, Telangana, Tripura, Dadra & Nagar Haveli and Daman & Diu. Once completed the final authority of Andaman & Nicobar Islands will align with that of Tamil Nadu.
RERA is central act, it doesn’t need to be notified by states. It’s only the Ministry of HUPA which notifies the sections etc. However, the states are supposed to make their own rules and set up authorities and tribunals which will function at the state and district levels.
As of Thursday April 27, 2017, 12 states had notified the rules, 18 were in an advanced stage of doing it.
Once it is notified on May1, developers and agents have to conform to the provisions and register themselves with the RERA authority. Explains a ministry source, “Unless the promoters do not register their projects they cannot advertise, whether ongoing or future.” This is in line with Section 3 & 4 of the Act which mandates registration of projects by developers comes into effect from 1st May. These are discussed in more detail below.
Section 3 deals with Registration of real estate projects and agents. It states that:
(1) No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act:
Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act:
Provided further that if the Authority thinks necessary, in the interest of allottees, for projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority, and the provisions of this Act or the rules and regulations made thereunder, shall apply to such projects from that stage of registration.
(2) Notwithstanding anything contained in sub-section (1), no registration of the real estate project shall be required—
(a) where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases: Provided that, if the appropriate Government considers it necessary, it may, reduce the threshold below five hundred square meters or eight apartments, as the case may be, inclusive of all phases, for exemption from registration under this Act;
(b) where the promoter has received completion certificate for a real estate project prior to commencement of this Act;
(c) for the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project.
Explanation — For the purpose of this section, where the real estate project is to be developed in phases, every such phase shall be considered a stand-alone real estate project, and the promoter shall obtain registration under this Act for each phase separately.
There are some important points to note here.
1) The developer has just 3 months to register the project with the RERA authority.
2) If the project is outside the planned area but is being built with the requisite permissions of the local authority, the promoter can be directed to register that project too, in the interest of the allottees.
3) Projects below 500 sq m or less than 8 units in one development need not register with RERA.
4) Units with Completion Certificate do not need to register
5) Renovation projects that are not being marketed or allotted afresh are exempted
6) Where a project is being developed in Phases, every phase would be considered a stand-alone real estate project
Section 4 deals with registration by developers
(1) Every promoter shall make an application to the Authority for registration of the real estate project in such form, manner, within such time and accompanied by such fee as may be specified by the regulations made by the Authority.
(2) The promoter shall enclose the following documents along with the application referred to in sub-section (1), namely:—
(a) a brief details of his enterprise including its name, registered address, type of enterprise (proprietorship, societies, partnership, companies, competent authority), and the particulars of registration, and the names and photographs of the promoter;
(b) a brief detail of the projects launched by him, in the past five years, whether already completed or being developed, as the case may be, including the current status of the said projects, any delay in its completion, details of cases pending, details of type of land and payments pending; Prior registration of real estate project with Real Estate Regulatory Authority.
(c) an authenticated copy of the approvals and commencement certificate from the competent authority obtained in accordance with the laws as may be applicable for the real estate project mentioned in the application, and where the project is proposed to be developed in phases, an authenticated copy of the approvals and commencement certificate from the competent authority for each of such phases;
(d) the sanctioned plan, layout plan and specifications of the proposed project or the phase thereof, and the whole project as sanctioned by the competent authority;
(e) the plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy;
(f) the location details of the project, with clear demarcation of land dedicated for the project along with its boundaries including the latitude and longitude of the end points of the project;
(g) proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be signed with the allottees;
(h) the number, type and the carpet area of apartments for sale in the project along with the area of the exclusive balcony or verandah areas and the exclusive open terrace areas apartment with the apartment, if any;
(i) the number and areas of garage for sale in the project;
(j) the names and addresses of his real estate agents, if any, for the proposed project;
(k) the names and addresses of the contractors, architect, structural engineer, if any and other persons concerned with the development of the proposed project;
(l) a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorised by the promoter, stating:—
(A) that he has a legal title to the land on which the development is proposed along with legally valid documents with authentication of such title, if such land is owned by another person;
(B) that the land is free from all encumbrances, or as the case may be details of the encumbrances on such land including any rights, title, interest or name of any party in or over such land along with details;
(C) the time period within which he undertakes to complete the project or phase thereof, as the case may be;
(D) that seventy per cent. of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose:
Provided that the promoter shall withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project.
Provided further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project:
Provided also that the promoter shall get his accounts audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by such SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 9 chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilised for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project.
Explanation — For the purpose of this clause, the term “schedule bank” means a bank included in the Second Schduled to the Reserve Bank of India Act, 1934;
(E) that he shall take all the pending approvals on time, from the competent authorities;
(F) that he has furnished such other documents as may be prescribed by the rules or regulations made under this Act; and (m) such other information and documents as may be prescribed.
3. The Authority shall operationalise a web based online system for submitting applications for registration of projects within a period of one year from the date of its establishment.
Residential property market is witnessing green shoots with housing sales growing 13% for the fourth quarter of 2016-17. The surge in the volume was primarily driven by Mumbai, Pune and Bengaluru, which together accounted for 57% of total sales across top-9 cities during the quarter ended March.
Total residential sales increased to 51,700 units during the quarter from 43,500 units in the previous quarter.
Residential markets seem to have recovered from the demonetization lows with sales and launches showing healthy levels in Q4 FY’17. Large part of the recovery is driven by the affordable housing segment which has found favour after getting infrastructure status.
According to the report, real estate sector in India has witnessed a revival after demonetization, with sales increasing by 13% as compared to 22% fall in the previous quarter across top 9 cities of India. Mumbai contributed nearly 23% to the total sales during the quarter, followed by Pune at 18% and Bengaluru at 16%.
The report added that there has been an increase in the number of launches across these cities by 19%, the highest in the last eight quarters. Around 51,500 units were launched in the fourth quarter of 2016-17 compared to 43,250 units during the preceding quarter. As far as launches are concerned, Mumbai contributed a maximum share of 26% to total launches followed by Hyderabad at 14% and Gurgaon at 13%. The share of affordable housing launches rose 22% owing to the recent sops offered by the government and infrastructure status received by affordable housing.
We might witness realignment of supply and demand with the implementation of RERA. While we might see some turbulence over the next couple of quarters, the long term outlook remains positive.
Inventory overhang also eased during the quarter – from 46 months in the preceding quarter to 38 months in the fourth quarter. Mumbai, Bengaluru and Pune together accounted for over 55% of the unsold inventory. Noida has highest share of unsold inventory aged above 3 years; more than 65% of unsold inventory in Ahmedabad, Kolkata and Pune is in the affordable segment.
Prices remained range-bound in top 9 cities, across all the segments, with marginal annual appreciation in the range of 1% to 3%. Bengaluru, Hyderabad and Chennai witnessed a marginal appreciation in the range of 3 to 5% per annum.
So its good sign for the entire Real Estate Market and Siliguri could soon see a spurt in demand across all segments..
Literally, carpet area of your apartment is the space on which you may be able to lay a carpet. Simply put, this is the actual usable area in your housing unit.
Due to an ambiguity over the definition of carpet area, some developers had earlier been charging home buyers according to built-up area, super built-up area, etc. But the recently passed Real Estate (Regulation and Development) Bill, 2016, makes the definition clearer.
According to the legislation, “carpet area means the net usable floor area of an apartment, excluding the area covered by external walls, area under services shaft, exclusive balcony or veranda area and exclusive open terrace area”. However, carpet area includes the “area covered by the internal partition walls of the apartment”. The Bill further explains that the expression “exclusive balcony or veranda” means the area of the balcony or veranda which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of the buyer. The same goes for the exclusive open terrace area.
Clause 4 (2.H) of the Bill emphasises that developers will now have to sell apartments on the basis of carpet area as defined in the Bill. A clearer definition is expected to bring more transparency in the sector.
Many people think the key to success is working harder and working more hours. But we don’t agree.
We agree with Abraham Lincoln when he said, “Give me six hours to chop down a tree and I will spend four sharpening the axe.”
Marketing yourself (and your listings) is a never ending challenge. There’s a classic story of a lumberjack that illustrates the smart agent’s thinking. A young man approached the foreman of a logging crew and asked for a job. He asked the young man to cut the tree down. He did so and did it well. Impressed, the foreman said, “You can start Monday.” By the time Thursday afternoon arrived, the worker’s boss told him to pick up his check when he left for the day. The young man said, “I thought you paid on Friday.” “Normally we do,” said his boss. “But we’re letting you go today because you’ve fallen behind. Our charts show that you’ve dropped from first place on Monday to last place today.” The new worker was confused. He was the first one there and the last one to leave. He took the shortest amount of breaks. The foreman thought for a minute and then asked, “Have you been sharpening your axe?” The young man replied, “No sir, I’ve been working too hard to take time for that!” The moral of the story is simple.
Working harder can’t replace or overcome working smarter.
Our goal is to share the techniques and strategies we have worked to perfect with our team of Realtors. There’s so many different opportunities and niches that are overlooked frequently. I remember a foolish agent that was like the young lumberjack. This agent was convinced that working hard and long was the was the way to go. This agent worked 60-75 hours a week. Constantly prospecting and doing what he thought was working the right way.
This agent thought his commitment to good service and his visual efforts in marketing were enough to separate himself from his competition.
What he didn’t realize was that every agent says the same thing. He may have worked harder than other agents, but since every agent claims they do that, owners didn’t see a difference. The smart agent is relaxed and doesn’t work more than 40 to 50 hours a week. The difference between these two is obvious and noticeable even outside of work.
A smart agent has systems in place to bring him listings. Plus, he actually stands out.
So, that begs the question? What can you do to stand out. How can you prove yourself as an expert in your field and earn the automatic respect from customers and potential customers? You have to become an authority. Really stand out, with your knowledge and experience. There are ways to automatically position yourself as that. Think about when you give away a business card, or even if you mail out letters. Most mail is opened right over the trash can, there’s a high chance it’s going to be thrown away. People get business cards ALL THE TIME. They’re nice to give out, but it’s not like business cards really help you stand out that much. They’re something you have to have, but it won’t create a point of difference that’s going to really stick in someone’s mind, especially since they all say somewhat of the same thing. Take about 20 minutes and ask yourself these 2 things. What unique benefit can I bring to a client? Why do I deserve to be in this market?
Sell Yourself First! LOVE the product or lose the sale.
If you are not excited about the product you have to sell, how could you possibly expect anyone else to be? In the case of Real Estate, the ‘product’ is YOU. Sure, there’s a lot more to it than you, but ultimately, every person wants you to answer the age old question: “What’s in it for me?” Trying to convince an owner you are the best agent to list their home is nearly impossible if you don’t believe it is true. Before trying to sell one single person, be sure you’ve sold yourself. You’re good enough, you’re smart enough, and people WILL like you when you bring a positive, confident attitude to everything you do. Have an answer to “What’s in it for me?” questions. It is not likely you will get that exact question, but it will be the reason behind many things an owner asks. Be prepared with a solid, real-life reason why they should list with you, versus another agent. This is not the place for meaningless, buzzword-filled proclamations. Bring something unique to the table. Something that sets you apart from other agents in your market. Of course, you must be able to prove your confidence through action. Be ready to DO what you said you would! Give an honest, straightforward answer, and you’ll win their trust. Back it up with actions, and you’ll win their business.
The smart agent determines needs first. Then present a solution.
It is incredibly arrogant to walk in, solution in hand, without first taking time to learn the needs a person has. Not only are you coming across as pushy, you are setting yourself up for failure. If you walked into a store asking for a specific item, and got a pitch on how great the store is at meeting their customer’s needs, would that help? What value does a pitch have to a person in need? So determine needs up front, and then deliver a solution specific to the need. One-size-fits-all is great for hats and oversized t-shirts, not sales presentations. Now, just to be clear, you should not be “winging it” when you meet people. Proven scripts are just that, proven. Words, phrases, and key points that cause people to act or respond in a certain way. Smart agents know this, and constantly fine tune their presentations. However, a good presenter will not come across as a presenter, because he or she has allowed room to be flexible within the script. Get so comfortable with your presentation it doesn’t require a pitch. You should naturally be able to flow through it in your own words. Tailor your delivery and style such that they blend with your personality. Above all, be genuine in your approach. In this way, you can speak to needs, while staying on track and highlighting the benefits and value you bring as a solution to those needs.
You are the expert. Act like one…
People turn to experts for help. Become the expert in what you do. Take time to do your homework. Know your market inside and out. Stay abreast of trends within the industry. Keep up with what is going on in your town. You can find an incredible amount of information with a little digging. Take staging for example. It takes a lot of work, can be a huge hassle, and frankly, most owners don’t want to deal with it. Many agents will tell owners they should stage the home, but few have specific numbers to back it up. They wind up arguing a bit on the merits of staging, and then giving up.
As an expert, you should lay out the facts, and help the owners make an educated decision.
One report on staging has these stats to share: Owners who turned to staging as a last resort spent almost 200 days waiting for their home to sell. Homes that were staged from day one? Averaged a sale in 42 days! A 72% faster sale. Not only do staged homes sell faster, the report definitively showed they sell for more money, too. The average staged home sold for 6% above the asking price. This is not an opinion or hearsay. These are facts that clearly support the value of staging. Don’t build a presentation that buries people under mountains of stats and data. But do use statistics to make a clear point. You will find you have a lot fewer arguments and fights with owners when you can take opinions and emotions out of the equation. Show stats, and let the numbers do the fighting for you instead.
A bench of Justices R K Agrawal and A M Sapre said if a person proved actual, peaceful and uninterrupted possession of a property owned by another for more than 12 years
If a person does not protest someone illegally occupying his property for 12 years, then the squatter would get ownership rights over that property , the Supreme Court has ruled.
A bench of Justices R K Agrawal and A M Sapre said if a person proved actual, peaceful and uninterrupted possession of a property owned by another for more than 12 years, “a case of adverse possession can be held to be made out which, in turn, results in depriving the true owner of his ownership rights in the property and vests ownership rights of the property in the person who claims it“.
However, the bench put in a caveat by ruling that such a person (squatter) must necessarily first admit ownership of the true owner over the property and make the true owner a party to the suit before a court for claiming ownership over the property through adverse possession.
This ruling came in a case where a Muslim man had claimed ownership over a property through adverse possession in Jalgaon of Maharashtra. He had attempted to advance the plea of adverse possession to claim ownership rights over the property , which was inherited by a Muslim woman after the death of her father.
Setting aside a Bombay high court order in favour of the man, the SC bench said, “When both courts below held and, in our view rightly , that the defendant has failed to prove the plea of adverse possession, then such concurrent finding of fact was unim peachable and binding on the HC. The HC erred fundamentally in observing that it was not necessary for the defendant to first admit the ownership of the plaintiff before raising such a plea.“
The man’s next plea was that he was the adopted son of the deceased original owner and hence was the rightful owner of the property. “The plea taken by the defendant about adoption for proving his ownership over the land as an heir of the original owner was rightly held against him. He has failed to prove that he was the adopted son. It is a settled principle of Mohammadan law that it does not recognise adoption,“ said Justice Sapre, who wrote the judgment for the bench.
The court gave ownership rights to the woman who had inherited the land from her father.
Ministry of Housing notifies remaining sections of RERA
Ahead of the implementation date of May 1 for Real Estate (Regulation and Development) Act, 2016 (RERA), the government has notified remaining sections of the Act through a gazette.
The sections notified by the Ministry of Housing and Urban Poverty Alleviation include key measures such as registration of realty project and real estate agents, functions and duties of project promoter including compensation, insurance and title of the project, rights and duties of allottees.
The notified measures also include punishment for non-registration of projects and recovery of interest or penalty or compensation and enforcement of order, etc.
The notified section of 79-80 that deals with jurisdiction of the act has also been notified. “No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act,” said the notified section 80.
It’s a positive step and shows the government’s commitment to protect the home-buyers’ interest. We now hope that all the state government will fulfill their part of their obligation as mandated by the Act and immediately notify rules and appoint authorities as this notification ends any speculation about extension of implementation deadline of May 1.
It is hoped that the central government will now focus on dilution of RERA rules by state governments in favour of developers and take steps to get those rules revoked and fresh rules in line with central rules are notified.
The Real Estate (Regulation and Development) Bill was passed on March 10, 2016 after a long wait of 8 years. The Bill was introduced in Rajya Sabha by the UPA government on August 14, 2013 and was referred to the Rajya Sabha select committee on May 6, 2015.
The Real Estate (Regulation & Development) Act, 2016 (RERA) was notified on May 1, 2016. All the states are required to notify realty rules and establish the realty regulatory authorities and the appellate tribunals maximum by April 30 as the Act would commence its full operation from May 1.
GST to boost warehousing, logistics !!
The roll-out of the goods and services tax and real estate investment trusts is expected to fuel the growth of warehousing stock across the country in the next few years.
The warehousing, manufacturing and logistics industries will benefit the most from the implementation of GST in India and the new tax regime will also usher in an era of upgradation in the warehousing infrastructure.
Accordingly, the total stock of Grade-A and Grade-B warehouses in the country grew about 16% in 2016 over the previous year to 111.9 million sq ft. Of this, the Grade-A stock was 32.9 million sq ft while the remaining 79 million sq ft was Grade-B. This year, JLL India expects the Grade-A and Grade-B stock to grow 18% to 132.5 million sq ft.
GST will ensure that India for the first time will be exposed to consolidated large space central warehousing parks instead of the current scattered poor quality standalone spaces.
Siliguri will also develop into a major Logistic Hub in the days to come !!
Real estate prices continued to grow steadily according to the latest installment of Reserve Bank of India’s House Price Index (HPI).
While the overall index sequentially rose 2.2% at the end of December 2016, almost seven of the ten cities tracked by RBI saw increase in price last year.
The House Price Index, that measures price levels across the nation, rose to 240.2 in December, from 234.9 in the September quarter.The annual growth in all-India HPI increased by 60 basis points to 8.3% however it remained lower than 9.7% annual growth recorded a year ago.
RBI’s index also noted a wide divergence in city-wise housing price movements. Annual growth in the price index ranged from an increase of 19.3% in Lucknow to a price correction of 5.4% in Jaipur during the period under review.
“All the metro cities witnessed housing price-rise on Y-o-Y basis, though Chennai witnessed some moderation during the latest two quarters,” the RBI said.
“The city-wise HPIs also witnessed large variance in sequential terms Kanpur recorded highest rise at 12.1% whereas Kochi witnessed significant contraction at (-) 4.7%.