Do You Have RERA Compliance Queries?

Complying with RERA provisions requires greater level of transparency, objectivity and professionalism, as it has enhanced the accountability and liability of real estate developers, property consultants etc. Therefore it is essential for real estate organizations to put in place a structured RERA compliance management process Developers need to streamline their processes, form teams and train employees on the new regulatory provisions. . However there are lots of confusion regarding RERA compliance by real estate organizations. On the other hand, NIREM with the mission to empower the Indian Real Estate sector is working to make the regulation as simple as possible.

If you are a real estate promoter or a professional into or planning to join the RERA compliance team and have any query regarding the RERA compliance, please send us your queries to info@nirem.org. Our Regulatory Compliance Expert Mr. Sumit Jha would respond to your queries. Please mail specific and relevant queries by 30^th April, 2017.

Developers scramble for Real Estate Act compliance: Hindustan Times

The year 2017 will be significant for homebuyers harassed for years because of property sale agreements lopsided in favour of developers, violation of building rules and delayed home delivery. The consumer-friendly Real Estate Regulatory Act (RERA), which kicks in from May 1, has pushed developers to sign agreements with buyers and take other initiatives which they claim are RERA compliant.

Mr. Sumit Jha, CEO, NIREM says that developers are putting up special RERA compliance teams to monitor projects and ensuring timely completion of projects, training sales professionals on customer interface post RERA and upgrading their agreement to sell. Read more at http://www.hindustantimes.com/real-estate/developers-scramble-for-real-estate-act-compliance-but-buyers-remain-sceptical/story-ixAlP94x4d8ZnFiHJJ2bpL.html

10 Key Facts About Smart Cities You Should Know!

Union Urban Development Minister Honb’le Mr. Venkaiah Naidu announced the first list of 20 smart cities at a press conference on Thursday in Delhi.

The cities were chosen on the basis of feasibility, smartness of proposal, performance indicators among others and awarded marks out of 100. The Minister said, ‘Today marks a historic landmark in annals of urban development as we get to know the first batch of 'Smart Cities'.

Referring to the investment opportunities in the backdrop of the recent financial crisis, he said, “People are searching for safe investments. I offer smart cities as the safest investment because land is going to be there, structures are going to be there, so the returns are assured.”

The first 20 smart cities are: Bhubaneshwar, Pune, Jaipur, Surat, Kochi, NDMC (New Delhi), Ahmedabad, Jabalpur, Vizag, Solapur, Devangere, Indore, Coimbatore, Kakinada, Belgaum, Udaipur, Guwahati, Chennai, Ludhiana and Bhopal.

Here are key facts about these Smart Cities that you should know:

Population (20 cities): 3.54 crore

Funding

Central Funding: Rs. 48,000 crore to the Smart City Mission over five years. This comes to on an average Rs. 100 crore per city per year.

State/ULBs Funding: An amount equal to the Central Funding, on a matching basis, will have to be contributed by the State/ULB

Total: Therefore approx Rs. One Lakh Crore of Government/ULB funds will be available for Smart Cities development.

Basic infrastructure/services to be provided:

• Assured water and power supply
• Sanitation
• Solid Waste Management
• Efficient Urban Mobility and Public Transport
• IT connectivity
• e-Governance and citizen participation

First Year and Subsequent Funding: In the first year, Government proposes to give Rs.200 crore to each selected Smart City to create a higher initial corpus. After deducting the Rs. two crore advance (for preparation of Smart City Proposal -SCP)and Admin and Other Expenses share of the MoUD, each selected Smart City will be given Rs. 194 crore out of Rs. 200 crore in the first year followed by Rs. 98 crore out of Rs. 100 crore every year for the next three years

Role of States and Urban local Bodies (ULBs): Key support role envisioned for States and Urban local Bodies (ULBs). It is mentioned that smart leadership and vision at this level and ability to act decisively will be important factors determining the success of the Mission.

Special Purpose Vehicle (SPV): The mission will be implemented at City Level by a Special Purpose Vehicle (SPV) created for the purpose. SPV to plan, appraise, approve, release funds, implement, manage, operate, monitor and evaluate the project.

SPV Governance: SPV to be headed by a CEO, with representation in board from Central & State Govts and ULB.

Distribution of 100 Smart Cities: The total number of 100 Smart Cities has been distributed among the States and UTs on the basis of an equitable criteria. The formula gives equal weightage (50:50) to urban population of the State/UT and the number of statutory towns in the State/UT. Based on this formula, each State/UT will, therefore, have a certain number of potential Smart Cities, with each State/ UT having at least one.

Re-allocation of Smart Cities: The distribution of Smart Cities will be reviewed after two years of the implementation of the Mission. Based on an assessment of the performance of States/ULBs in the Challenge, some re-allocation of the remaining potential Smart Cities among States may be required to be done by MoUD.

Handholding Agencies: During the preparation of the Smart Cities Mission, a number of foreign Governments have offered to provide Technical Assistance (TA) support.

Additionally, other external organizations, including bilateral and multilateral institutions, as well as domestic organizations have suggested to the Ministry of Urban Development that they can give technical assistance support. These include World Bank, ADB, JICA, USTDA, AFD, KfW, DFID, UN Habitat, UNIDO, etc.

Such organizations, which have experience in the field of Smart City development, can also extend support to the States/UTs as hand-holding agencies in preparing the SCPs. The Ministry will assist in tying up the arrangements.

 (Source: Smart City Guidelines, Govt. of India)

Get Ready for ‘Smart’ Villages Now!

After launching the smart city projects, the Union Govt. aims to launch 300 village clusters under the ‘Rurban Mission’. Union minister for rural development Birender Singh announced the Govt.’s intention while inaugurating a two-day national workshop of 'Sansad Adarsh Gram Yojana' (SAGY) in Bhopal recently.

He said that the population of these clusters would vary between 25,000 and 50,000. However cluster strength will be less in hilly areas. To be developed on the pattern of towns with planned layouts, these rural-urban hubs will give a new dimension to Urbanization as well as real estate market in India.

As per the minister, state governments will have to issue notifications for these clusters. An investment of Rs. 50-55 crore is envisaged in each cluster which will be funded jointly by the Union and State Govts. Governments will take up funding of these clusters under various schemes within the Rurban mission. He further added that a critical gap funding of 30 per cent will be additionally provided.

Mr. Singh added that the objective is to create an ecosystem of trade growth and infrastructure facilities in these clusters. Image: India News

Indian realty industry to almost double to $140B by FY17

BY  Pooja Sarkar, VCCircle

The industry, which had been growing at around 8 per cent annually during 2009-11, saws a 6.5 per cent deceleration in 2012-13.

The Indian real estate industry is expected to grow to approximately $140 billion by FY17, said a research report on real estate released by advisory firm Ernst $ Young and industry body FICCI. The report said, according to industry estimates, the size of the Indian real estate market was close to $78.5 billion in FY13.

Niranjan Hiranandani, chairman of FICCI’s real estate committee and managing director, Hiranandani Constructions Pvt. Ltd, said, “Mumbai urgently needs change of infrastructure with the support of government and also reforms in taxation, with 34 per cent of cost of an affordable house going out as taxes.”

The realty industry, which had been growing at around 8 per cent during 2009-11, saw a 6.5 per cent deceleration in 2012-13 primarily due to the sluggish domestic growth, rising input costs and negative global economic sentiments.

The sector’s major growth driver has been the pumping of capital through foreign direct investment (FDI) route. Between April 2011and July 2013, the sector attracted FDI of close to Rs 100,000 crore. The report, however, said the volume of FDI into the sector has been declining.

Even for private equity funding, the sector saw its peak in 2007 when $6.8 billion came in. In 2012, the industry attracted $1.7 billion from limited partners in realty projects across the country, as per the report.

For the first half of the current calendar year, the realty industry has seen investment of close to $1.4 billion and industry experts indicate that this year would be one of the better years compared to last four years.

With negligible sales and developers’ reluctance to bring down prices of properties, even banks’ credit exposure to the real estate and housing sector declined from 10 per cent as a percentage of gross bank credit in FY10 to 7.9 per cent in FY13. While bank construction finance continues to be the cheapest source of funding, another instrument which has caught attention of developers is raising money through non-convertible debentures (NCDs). Reflecting this trend, NCDs worth $4.2 billion were issued in 2012 compared with $3.8 billion in 2011.

The realty industry recently witnessed a few big-ticked buyout transactions in commercial office space by private equity funds. Over the last three years, it has attracted investment of $1.14 billion in commercial office space portfolio development.

(Edited by Joby Puthuparampil Johnson)

New Land Acquisition Law to Kick in From 2014

Come 2014 and a new law will guide all land acquisitions by central or state governments, bringing in stricter norms and increasing landowners’ compensation significantly.

The ministry of rural development plans to notify the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2013, commonly referred to as the Land Acquisition Act, with effect from January 1, 2014, little more than two years after it was first introduced in the Parliament. 

“We will notify the Act on January 1,” Jairam Ramesh, the rural development minister, said, adding that the entire process of the new Act coming into force is on the fast track. The ministry has invited comments from the stakeholders over the next 45 days after which these will be published in the official gazette and finalized within 90 days.

The Land Acquisition Act was passed by the Parliament during monsoon session and has already received the assent of the President. The law replaces the Land Acquisition Act of 1894 by establishing new rules for compensation as well as resettlement and rehabilitation. 

The most important feature of the Act is that the developers will need the consent of up to 80% of people whose land is acquired for private projects and of 70% of the landowners in the case of public-private partnership projects.

Besides, it provides for compensation as high as four times than the practice now in rural areas and two times in urban areas. However, industry concerns related to land use have not been addressed in these draft rules because it is a state subject.

“Centre will only come out with suggestive guidelines on issues where it does not have a legislative jurisdiction but these are desirable activity under the Land Acquisition Act,” Ramesh said.

Land acquisitions for factories, roads and housing projects in states like Haryana and Uttar Pradesh have sparked clashes between farmers and state authorities, resulting in huge project delays.

Responding to a proposal from some political leaders on acquisition of only wasteland for industrialization, Ramesh said the ministry has come out with the Wasteland Atlas of India, based on the 2008-09 figures, in association with the Indian Space Research Organization.

HC allows property sale on power of attorney

NEW DELHI: Spelling relief for thousands of property owners in the city, the Delhi high court has struck down a controversial circular of the state government that restricted property transaction via general power of attorney.

Justice Rajiv Shakdher faulted the state government for wrong interpretation of a landmark 2011 Supreme Court on the issue of power of attorney (GPA), pointing out the apex court never issued a blanket ban on registration by taking recourse to a GPA. The circular had created massive confusion among property owners who had to regularize their property through a fresh sale deed and pay stamp duty.

"The Supreme Court has not said that in no case a conveyance can be registered by taking recourse to a GPA. As long as the transaction is genuine, the same will have to be registered by the Sub-Registrar. There is distinctly a specific reference to the fact that, a person may enter into a development agreement with a land developer or builder for development of a parcel of land or for construction of apartments in a building, and for this purpose a power of attorney to execute sale agreements, can be executed," the court observed.

In October 2011, the SC had ruled that sale transactions carried in the name of GPA will have no legal sanctity and immovable property can be sold or transferred only through registered deeds. Last year, the state government came out with a circular banning sale of property on the basis of a GPA, a will, and agreement to sell, collectively or separately in respect of an immovable property. "No transfer of property will take place until a clear sale deed is executed and duly registered by the executants in the office of the Registrar/ Sub-Registrar," the circular stated, with the government claiming it issued it in "strict adherence to SC ruling" on property transactions.

The government had clarified that property transactions involving GPA, done after the SC order of October 2011 would not be null and void and property holders can "regularize" them by paying the difference in the stamp duty.

HC's order came on the petition of a builder who had entered into a property transaction in south Delhi by way of a GPA. The builder highlighted how the government's circular failed to make a distinction between registration of a genuine GPA and those done to evade stamp duty. Source: Abhinav Garg, TNN

Govt aims to provide houses for all homeless

Mr. Ajay Maken, Minister of Housing and Urban Poverty Alleviation, says it is the responsibility of state governments to ensure homes for all citizens

As per Census 2001, total houseless households in the country stood at 0.45 million.  Census of India 2011 data on houseless households has not been released as on date, therefore, estimation of houseless households as of now and its comparison with the number in 2001 cannot be made at this juncture. However ‘Technical Group on Urban Housing Shortage’ has indicated that 0.53 million Households are in homeless condition in urban areas as of 2012.  This information was given by Mr. Ajay Maken, Union Minister of Housing & Urban Poverty Alleviation (HUPA), in the Rajya Sabha today.

The Minister further stated that Land and Colonisation are State subjects, therefore it is the primary responsibility of State Governments to provide houses/shelters to all citizens. Government of India did not have any scheme for construction of shelters for homeless persons during the Eleventh Five Year Plan. However, in order to complement and supplement the initiatives of State Governments in providing housing for the urban poor, Ministry of Housing & Urban Poverty Alleviation has been implementing following schemes/programmes:

Under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) with its two components Basic Services to Urban Poor (BSUP) and Integrated Housing & Slum Development Programme (IHSDP), 1.57 million Dwelling Units have been sanctioned as on date.

The scheme of Rajiv Awas Yojana (RAY) is at a preparatory phase where Slum Free City Planning is being undertaken.

Under Affordable Housing in Partnership Scheme (AHP), 11 projects of 2 States viz., Karnataka & Rajasthan have been sanctioned.

The Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) is meant to facilitate channelization of credit for the urban poor. As on date, 13,485 beneficiaries have been covered under ISHUP.

Under National Urban Livelihood Mission (NULM), ‘Shelters for Urban Homeless’ has been proposed to be taken up during Twelfth Five Year Plan. However, since necessary approvals have not been obtained, no time frame for its finalization can be committed at this juncture.

The Minister further stated that given the magnitude of the housing shortage and budgetary constraints of both the Central and State Governments, it is clear that Public Sector efforts will not alone suffice in fulfilling the housing demand. The exact time span to ensure a house to every family in the country cannot be estimated, the Minister added.
Source: By iGovernment Bureau