Noida May Allow Registry of Flats Without NOC to Accelerate Deliveries of Projects

Sep 24,2019 / By Prahalad Singh / No Comment

You might hear or read that Noida tops the list of cities having the most unsold inventory. As much as over 1 lakh units still unsold by Noida builders. The major reason for the buyer’s unwillingness to buy under-construction properties. In addition, the impact is also visible on ready-to-move-in properties which have not yet received Occupancy Certificate (OC) owing to developers failing to pay land dues to the authority. This has not only to give a hard time to the home buyers but also has to lead to disturbance and left liquidity crisis in the city.

However, there is a reason for cheer for both builders and buyers as the district administration is considering granting the registry of property even if the authority has not given NOC to the project through an “agreement to sub-lease” between the builder and buyer. The builder lobby has welcomed this move saying that this will help in improving the city’s image and will further be effective in bringing more investment in the city.

The plan was discussed in a meeting held on Saturday between officials of the district administration and the Uttar Pradesh Real Estate Regulatory Authority (UP-RERA). The officials also evaluated changes in laws that now make it compulsory for the development authorities to allot Completion Certificates to builders within 8-days of applying for it.

I have explained above that in many cases it has been found that homes were ready, but the builder had not cleared the authority’s due and didn’t get a no-objection certificate (NOC). In such cases, the buyers are left in a stumble and would sometimes hang around into the homes they paid for but due to the unavailability of any valid documents for ownership.

As per district magistrate BN Singh, they can now charge the 5% stamp duty and register the flats on an agreement to sub-lease between the builder and the buyer”. He further explained that once the builder gets a NOC from the Noida Authority, it can finally sub-lease the property to the buyer. This would be a tripartite agreement between the builder, buyer, and the Noida Authority.

The DM further explained that once the Noida Authority provides NOC and Completion Certificate, we will then issue a final registry certificate with Rs 50 stamp duty.

As per the UP Urban Planning and Development Act, the Development Authority was supposed to respond within 3-months of application regarding issuing the completion certificate for a project. However, the law has now been revised to accelerate the delivery process with the increasing delays in the delivery of flats to homebuyers.

What is the new law saying?

As per the new law, the authority will grant NOC to developers according to the dues cleared. It means if a developer has paid 50% of the total dues then the authority will issue the NOC for 40% of the land area and keep 10% as a deposit. This will allow some of the buyers to get possession even if the developer has not paid the full dues to the authority.

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Land Title Insurance Compulsory For MahaRERA Registered Builders

Sep 23,2019 / By Prahalad Singh / No Comment

Why Land Title Insurance Compulsory for MahaRERA Registered Builders?

The state housing department is set to make Land Title Insurance compulsory for MahaRERA registered builders, for which insurers are already in conversations with the regulatory authority to make a decision on the premium.

Land title insurance is a kind of reimbursement protection, which safeguards builders and customers against financial loss from mistakes in title to real property, among others. It had earlier unsuccessful to clear out due to high pricing and lack of transparency, as well as differences in the government records.

The Real Estate (Regulation and Development) Act 2016 (RERA) directives the purchase of title insurance for new and ongoing realty projects registered with the MahaRERA (Maharashtra Real Estate Regulatory Authority).

As per sources, insurance companies have already enforced the Insurance Regulatory and Development Authority of India (IRDA) for launching title insurance products. On the other hand, developers are demanding the state government should announce a separate notification in this matter.

Rajiv Parikh, the president of the state Confederation of Real Estate Development Association of India (Credai), told that “While title insurance is a must for assured titles, it is up to the government to make sure that electronically generated titles are made available so that insurance can be needed for these assured titles. Having said that, the government needs to settle differences in title records to bring more insurers to hit the sector,”.

He further added that even though the title insurance cover may start with new projects, the premium should not be too high as the developers would be passing it on to the buyers.

As per the sources, the premium may differ from 0.5 to 3% of the sum insured for a 7 years policy which can be extended further. Two transactions for the title insurance products have already succeeded in Mumbai and the state governments are in the process of establishing Land Title Bill and may acknowledge briefing the mandatory features of the title insurance too.

Assured insurance for the title will benefit consumers to attempt the insurance in case of any differences said State settlement commissioner S Chockalingam, who has been instrumental in recommending for the title insurance.

He further added that once, the state government makes it compulsory, the state real estate regulatory body can execute it among promoters of new projects.

At the same time, the government would have to control the premiums as the consumers are not too interested in title insurance over the fear of increasing the cost of the property.

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DDA sanctioned Transit-Oriented Development Policy Around Transit Corridor

Sep 18,2019 / By Prahalad Singh / No Comment

The DDA on Monday sanctioned its transit-oriented development (TOD) policy and regulations which are focused on development taking place around or along with transit nodes or corridors.

The policy was sanctioned in the urban body’s authority meeting at Raj Niwas, Delhi chaired by Lt Governor Anil Baijal who is also chairman of the DDA.

After getting approval by DDA, the proposal will be sent to the Ministry of Housing and Urban Affairs (MoHUA) for its approval and notification.

Other key decisions are taken at a DDA meeting including some amendments to the Master Plan 2021, fixation of amalgamation charges for commercial properties, relaxation of rules to settle of pending inventory.

This policy presides over complete ease of access to that transportation facilities so that convincing people to walk, cycle and use public transportation over personal modes of transport.

TOD includes a variety of high-density, mixed-use, mixed-income buildings, within a short distance of a rapid public transport network, set in a public domain that prompts more people to use public transport.

As per the DDA sources, Transit-Oriented Development (TOD) policy would set up development favorable circumstances to the private sector to bring in investment into the city building, its growth, revenue, and also support cross-subsidize social amenities, affordable housing, and public transport, using an array of potential financial development models.

Other Approvals:

To assure ease of doing business, the Authority sanctioned amalgamation charges for commercial properties at 10% of the circle rates applicable at the time of submission of the request for amalgamation. It will apply to the total area of the plot.
The Authority also sanctioned the plan for modification in the Development Control Norms under which the following activities are allowed for religious plots at sub-city level-training center for Yoga, spiritual activities and meditation, Museum/Art Gallery/Exhibition Centre, Auditorium, accommodation for preachers/devotees/management staff.
It also sanctioned a revision in Master Plan 2021 under which bank lockers if part of the existing banks will be allowed in the respective basements of the same premises. Apart from that, restaurants on the ground floor only with valid appropriate licenses and with all statutory clearances, as existing on or before Monday i.e. 16th September 2019, will only be permitted on published mixed-use streets. The sanctioned plan will be sent to MoHUA for consideration and final notification.
The Authority also sanctioned a 20% adjustment on the current rate of Rs 2.8 lakh per sq. mt. for disposal of 84 Commonwealth Games flats to government bodies, Public Sector Undertakings and central and state organizations.
The Authority also voted to change the mode of allotment of socio-cultural and religious category lands from direct allotment to auction to give equal opportunity to all societies to join in the auction. The maximum size of the plot would be 1000 sq. mt. for the socio-culture category, while it would be 400 sq.mt. for the religious category.
To establish an institutional hub in Narela Sub-city, the Authority has sanctioned the change of land use of 36.6 hectares in the District Centre Narela from commercial to public and semi-public (PSP).
The Authority also sanctioned a proposal for the collection of damage from the occupants of Damage Payee properties existing on Government Land.

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Is Property Valuation an Important Component of a Real estate Transaction?

Sep 12,2019 / By Prahalad Singh / No Comment

We know that a house is the most important thing for everyone and one will never compromise with it. So if you are buying a house or want to sell your house then in both cases doing the property valuation process is never a loss process.

A question is always asked: why would you waste your hard-earned money getting a property valuation? There is no requirement for it and may not be legally required.

If you are thinking that property valuation involves huge expenditure, then you are wrong. It is an investment. By doing this, we find out the actual value of a property which is beneficial for you from various aspects. Whether you want to sell or buy the property or want to keep it on rent. The value of your investment property should be known to you.

So to know the valuation of your property, take the help of a property surveyor to find out the fair value of your property.

There are various reasons why a property is being valued. Some of them are using it for taxation purposes, buying or selling of property, wealth tax, bank guarantees, home loans, to mortgage a property, property transfer, will and testament, acquisition by the authorities, auction, stamp duty, rent and depreciation, capital tax calculation, divisions of property, etc.

Advantages of Property Valuation

Buying or selling of property:

Property valuation is important when buying or selling the property. Even if anyone wishes to rent out his property, valuation of property becomes important. The rent of a property is usually 8-10% of the estimated price of the property.

For transfer of property:

In case a person wants to transfer his property, he/she will need to estimate the value of the property. On the basis of the value of the property, the stamp duty is calculated.

To mortgage a property:

If a buyer wishes to avail loan against the security of property, the valuation of property becomes important. It is also done in case of a loan for construction of a building is required.

Acquisition by the authorities:

The valuation of a property becomes important when an individual or an organization declares itself bankrupt and a compulsory acquisition or auctioning off the property is done.

For taxation purpose:

Property valuation becomes important when someone calculating the tax on property. Tax includes municipal tax, rent tax, wealth tax, property tax, vacant land tax, etc.

How does property valuation help?

It helps us to know the fair value of the land or building. At the same time, you came to know the improvements that can help you to increase your property value. In return, you will get a certificate, proving the fair value of your property admissible in a court of law.

How much do I have to pay for the property valuation?

There is no standard pricing fixed for property valuation. It depends on the location, kind of property, size as well as the kind of certificate/documents you require, the pricing may vary.

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Why police verification of tenant is important & how it’s done?

Sep 11,2019 / By Prahalad Singh / No Comment

Why police verification is so important?

Renting out a property sounds a profitable choice for many of us. The high demand for rental homes from the migrating population in cities makes it an attractive journey for homeowners. However, the landlord must be careful while choosing tenants. Since the benefits of your investments depend solely on the kind of tenant you have chosen for your rental property. Police verification of your tenants is an essential component of this safeguarding process which must be properly followed for your own security. In case you are renting out your property without going through this safeguarding process, it is possible that trouble may strike you in the future.

The law makes it compulsory for landlords to fulfill police verification of their tenants. Under Section-188 of the Indian Penal Code (IPC) which concerns the violation of order rightfully declared by a public servant, a convict may be “punished with simple imprisonment for a term which may extend to one month or a monetary penalty of Rs 200”.

Since the monetary penalty is insignificant, proper attention is not taken usually to follow the laws. By the look of it, the tenant seems fine to the landlord and the difficulty to follow the method could well step aside. Does a landlord think that what harm could the tenant cause him or the system? Even if everything is fine, a landlord could still be accused or charged.

It is often seen that the landlord ignore the importance of tenant verification and rent out their property without performing legal due diligence. This is not only risky for the property but at the same time well-being as a landlord. If your tenant is involved in any criminal act, You can be held responsible for this negligence.

To make sure that you are renting out your property to an honest tenant, it is necessary to follow up these simple steps:

Police Verification:

You can get Police Verification Form online for tenant verification. Every landlord should download this form and give it to the tenants for verification before handing over the house or flat keys. The tenant should fill his original name with father name, permanent address, and other essential information in the given form. It verifies a tenant and makes it easy for the landlord to involve the police in case of a dispute.

Background Check:

A background check is a first and most important step in tenant verification. If your tenant has a history of averting rent or destroying rented property, in this situation, you may be able to find out through a background check.

Contact Your Tenant’s Previous Landlord:

If the tenant has lived in the same locality/city, then you can do a check with his previous landlords. You can also ask for the previous employer’s contact number and address. You can ask all relevant questions to make sure the person is reliable for you to rent out your property.

Ask for the personal references:

The landlord can also ask for 1-2 personal references whom the landlord can call and ask about the person and verify his details. Family and friends are a good source to verify the tenant. If the person has no unlawful records he won’t hesitate to share a few references but it is not always necessary that you will get all the information as some tenants may not be comfortable sharing their parent’s contact numbers. In this situation, it is better to ask for friends’ numbers or colleague’s details just to keep them as a record.

How does police Verification help?

Police verification can help in below-mentioned ways:

Unlawful practices on-premises:

It is often seen that college students, bachelor, and even young working professionals live alone or want privacy. They enjoy parties, consume drugs, drinking on their premises. Some live-in with partners. When police verification is completed, tenants do not resort to such activities in the premises as the fear of getting arrested.

It helps in tracking crime:

It is very easy to track the absconding culprit and those who connive a heinous crime in the rented apartment/flat. Once the tenant submitted his identity proof, the fear of a police trial ensures that there are very few chances of committing a crime.

It helps in tracking terror activities:

Many terrorists rent places to stay in the city from where they carry out plans of attacks in the city. A police verification can easily find out these monsters with fake identities.

It helps in tracking foreigners identification:

Many foreigners overstay after the expiry of the contracts and disappear into the smaller cities. With the help of police verification, these unauthorized citizens can easily find out in case they rent out a place to stay.

It helps a landlord if he lives abroad or out of town:

It is often seen that landlords rent out the property and stays out of the town or country. If he has done the police verification, he is relieved that his property is let out to a decent person with a good background.

It creates fear of law for the tenants:

After police verification, tenants always fear of police action and being hauled up and put behind the bars. If a tenant has submitted his official details, he fears that police can reach the workplace and he will lose his jobs and he will not get another place to stay.

It helps in better maintenance and safety of the premises:

Tenants take good care of the rented property and pay rent on time when there is a police verification completed. He does not mess around with the structure and does not cause any damage to it. He is aware that his documentation lies with the police and his record gets blackened if the landlord registers any complaints with the police.

The FAQ on Police Verification:

How do I get police verification for tenants?

To perform that, you can visit the nearby police station in your area and ask for tenant verification forms. The correctly filled documents that would have all the details of you and your tenants should be submitted with the police. You could download the form, on the website of police stations.

What is a tenant verification form?

The tenant verification form is a document utilized by a landlord when verifying the past rental information of an aspirant for tenancy. The landlord must send the form to the applicant’s current or past landlord in order to get all the details linked to the tenancy of the individual.

Is police verification of tenants mandatory?

Police verification of your tenants is an essential part of this screening process which must be properly understood for your own safety. The law declares it necessary for landlords to perform police verification of their tenants. Any negligence in this concern may invite a jail term or a monetary penalty.

What is a rental verification form?

A rental verification form is a permission form that a tenant applicant will sign to give permission to the landlord to do a background check. This also involves the ability to call the current employer, previous landlord, and current landlord.

What is the method for an online tenant police verification?

There are several methods to be followed:
Download the Tenant Police Verification Form online first.
Complete the form with both tenant and landlord details.
Affix the current photo of your tenant.
Sign at the bottom of the form confirming that the information stated in the form is true and you are agreeing to it.
Submit the filled form to your nearest police station.
Collect your acknowledgment receipt and keep it as a reference.

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