DDA reduces time frame to convert property - Hindustan Times

DDA reduces time frame to convert property - Hindustan Times

More than two lakh property owners in the city can heave a sigh of relief, with the DDA deciding to significantly reduce the time of converting a property from leasehold to freehold. At present, it takes 90 days for property owners to get their property converted. Under the new plan, it will take merely 45 days.

According to Delhi Develop-ment Authority (DDA) officials, it has allotted more than three lakh flats so far out of which two lakh are on leasehold basis. This means that those who are in possession of leasehold DDA flats are the tenants and not owners. And by converting their property from leasehold to freehold, they become the owner of the property.

“The DDA vice-chairman, GS Patnaik, had taken several meetings wherein he identified the components of the process through which a property is converted. Following this, each component was assigned a timeframe within which work would be done. Hence, the time has been reduced from 90 days to 45 days,” said Neemo Dhar, spokesperson, DDA.

She added that once DDA receives an application it is verified by the legal, finance and management department.

DDA flats which were allotted after 1995 are on freehold basis which means those who have bought it are the owners of the flat. However, prior to 1995, flats were allotted under leasehold basis.

In 1995, the ministry of home affairs decided that houses which were on leasehold basis could be converted to freehold after paying a sum to DDA which is called the conversion charges.

HTC

MCD to make floor-wise approval of plans easy - Times Of India

MCD to make floor-wise approval of plans easy - Times Of India

NEW DELHI: There is good news for people living on individual floors in Delhi. Now, you don't have to obtain a No Objection Certificate (NOC) from your neighbours for carrying out construction, as the Municipal Corporation of Delhi (MCD) is soon going to come up with guidelines for floor-wise regularizing and sanctioning of building plans in accordance with the Master Plan of Delhi 2021.

The standing committee on Wednesday asked MCD commissioner K S Mehra to prepare the new guidelines within two months. So far, a person living in a flat was expected to obtain an NOC from all the occupants of the building before carrying out any new construction.

"There were many complaints in this regard as other occupants of the building often used to refuse to give NOC. Earlier, we used to give floor-wise approval for building plans, but after the Lieutenant-Governor raised an objection last year in April, this procedure was discontinued. We have asked the MCD commissioner to prepare the guidelines in the next two months so that citizens of Delhi can comfortably live in the houses and don't have to depend on the permission of their neighbours for carrying out any construction,'' said Yogender Chandolia, chairman, standing committee.

According to senior MCD officials, obtaining an NOC from all the occupants is a cumbersome process and in most cases it is impossible to get an NOC as the other parties want the person, who wants to carry out new construction, to either give them money or some other benefit.

While framing the guidelines, MCD officials say, the issues concerning structural safety, distribution of floor area ratio (FAR) and problems of water, electricity, sewer and parking have to be addressed.

"At present, the FAR is for the entire building constructed on a piece of land. Now, we have to find out a way to fix the FAR for each floor. Apart from this, parking water, electricity and structural safety issues also have to been carefully studied," said a senior MCD official.

Once the policy is in place, Delhiites will be expected to simply submit their building plan and the proposed construction. MCD's technical committee will assess the structural stability and other parameters and then give floor-wise approval.

"At present, MCD doesn't have structural engineers, so we plan to make a panel of structural engineers to assess the new proposed structures," said the official.

In December 2006, the civic body started approving floor-wise building plans, but it was discontinued in April 2010. Since then, there has been rampant illegal construction in the city.

toireporter@timesgroup.com

"Buy Vs. Rent Index" by Makaan.com

Which is beneficial, buying a property or staying on rent? In the absence of a robust and reliable tool, these decisions were traditionally taken with gut feel or with the guidance of a close relative / friend, leaving scope for error. Makaan.com, India’s fastest growing real estate website from People Group has launched India’s first Buy vs. Rent Index. ChristenedMakaan.com Buy Vs Rent Index (MBRI) the tool aims to help property seekers make informed choice between buying and renting of property in top Indian cities / sub-cities.

The launch of MBRI follows the launch of hugely successful Makaan.com Property Index (MPI) which has been disseminating valuable information regarding the movement of residential property prices in key Indian cities for over a year. MBRI is yet another step to empower the property seeker with tools and intelligence that helps them take informed decision based on in-depth research.

MBRI, is a numerical value, arrived at after taking into account several factors including average capital value of property, average rental value, rental yield, historical capital price movement, historical rental movement and inflation. A low MBRI indicates that it is much less expensive to buy a home than to stay on rental whereas a high MBRI denotes that it is much more expensive to buy a home than to stay on rental. MBRI has been collated both at city and sub-city level.

Speaking on the initiative, Anupam Mittal, Founder & CEO, People Group says- ‘The MBRI is another step for Makaan.com towards becoming the trusted property marketplace for property seekers, agents, and developers.  Our mission of providing real-estate insight and intelligence has slowly become a reality and we hope to continue building upon the platform’.

 Speaking on the launch, Aditya Verma, COO Makaan.com says – ‘A property seeker today is confused between opting for a rented accommodation or giving that rental amount as the EMI for buying a house. MBRI will empower him with research based analysis. We have tried to present the finding in a manner that is easy to absorb and implement. We hope that seekers will benefit from this research’.

How to interpret MBRI? 

MBRI of 1-20: This denotes that it is much less expensive to buy a home than to stay on rental, in these cities / sub-cities. Property seekers looking at investing here are advised to buy a property than staying on rentals.

  

MBRI of 21-25: This denotes that it is relatively more expensive to buy a home than to stay on rental, in these cities / sub-cities. This is a neutral range and property seekers looking at investing here are advised to take the final decision based on their financial situation.

MBRI of 25+: This denotes that it is much more expensive to buy a home than to stay on rental, in these cities / sub-cities. Property seekers looking at investing here are advised to rent a property rather than buying.

MBRI analysis for top Indian Cities

The table and illustrations below explain what the MBRI is and how it is to be used. MBRI for key Indian real estate markets for the period October – December 2010 is given below

          

              MBRI OCT/DEC--2010

City/Subcity                            MBRI   Recommendation

Bangalore	20	BUY
Bangalore Central	27	RENT
Bangalore East	18	BUY
Bangalore North	19	BUY
Bangalore South	20	BUY
Bangalore West	16	BUY
Delhi	28	RENT
Delhi East	37	RENT
Delhi North	38	RENT
Delhi South	29	RENT
Delhi West	29	RENT
Dwarka	42	RENT
Faridabad	18	BAY
Ghaziabad	27	RENT
Greater Noida	25	NEUTRAL
Gurgaon	17	BUY
Noida	19	BUY
Hyderabad	21	NEUTRAL
Hyderabad	15	BUY
Secunderabad	28	RENT
Mumbai	25	NEUTRAL
Mumbai Andheri-Dahisar	24	NEUTRAL
Mumbai Beyond Thane	27	RENT
Mumbai Harbour	24	NEUTRAL
Mumbai Mira Road And Beyond	23	NEUTRAL
Mumbai Navi	25	NEUTRAL
Mumbai South	25	NEUTRAL
Mumbai South West	22	NEUTRAL
Mumbai Thane	27	NEUTRAL
Pune	24	NEUTRAL
Pune	24	NEUTRAL
Ahmedabad	18	BUY
Ahmedabad West	22	NEUTRAL
Ahmedabad East	15	BUY
Ahmedabad North	18	BUY
Chennai	16	BUY
Chennai South	16	BUY
Chennai North	18	BUY
Chennai Central	13	BUY

 Let’s look at the MBRI data for Chennai (16) and Ahmedabad (18) and compare that with MBRI for Mumbai (25) and Delhi (28). A lower MBRI for Chennai and Ahmedabad indicates that it is less expensive to buy a property here than to stay on rent. Let us take an example to understand the MBRI dynamics with-in a city, if you look at Delhi NCR, we find that MBRI for Gurgaon, Faridabad & Noida is 17, 18 & 19 respectively, indicating that property seekers will be better off buying a property in these sub-cities rather than staying on rent. This also indicates that the rentals in these sub-cities are higher when compared with the prevailing capital values. On the other hand, MBRI for Delhi East, Delhi North & Dwarka is 37, 38 & 42 respectively, indicating that one should prefer to stay on rent rather than buying a property here. High MBRI also indicate lower rental value when compared with the capital value of property. Similar interpretation can be drawn for other cities / sub-cities.

MBRI Methodology

     Coverage - Each city is divided in sub-cities (micro-markets) and micro-markets into localities. Prices of properties are obtained across micro-markets through listings on makaan.com as well as makaan.com’s nationwide sales force

·         Database - The current Index comes from 32 micro-markets across the above cities. The Index is based on minimum database size of 20,000 data points every month

·         New & Resale properties - The MBRI database includes a good representation of new as well as resale properties. Most reports on the property sector today are based on new developments, whereas actually new properties are relatively small % of the supply with resale being the majority of supply

·         Index algorithm - The Index is calculated quarter-on-quarter for each of the above cities & sub-cities. It is a derived index using an advanced algorithm which factors in the average value of properties available for sale and rent.

Selection of cities for MBRI

·         Coverage ------------------------------- The MBRI covers Ahmedabad, Bangalore, Chennai, Delhi/NCR, Hyderabad, Mumbai and Pune.Other cities may be added in subsequent issues. These cities account for over 80% of the Indian Real Estate market.

·         Factors that have been taken into consideration while selecting the cities:

Population – The real estate sector is dependent on the demand of houses, which in turn is dependent on the population. Populous and ever growing urban agglomerates like Mumbai and NCR have an ever growing demand for housing.

Economic Importance – Cities which are hubs of certain industries have constant influx immigrants from across the country, which also creates a strong demand for housing – beyond the needs of the resident populations – e.g. Bangalore, Pune. Hence such cities have also been included.    

MakaanIQ.com, is an initiative to provide information, intelligence and tools to help property seekers and real estate industry players take an informed property investment decision. MakaanIq.com is part of People Group, owners of Makaan.com, Shaadi.com, Fropper.com & Mauj Mobile. People Group has won many awards including Deloitte Technology Fast 500 Asia Pacific awards - 2007 and IT - People awards for excellence in information technology.

Renting a house? Here is your legal checklist! - MakaanIQ.com

Renting a house? Here is your legal checklist! - MakaanIQ.com

You often hear people say, “nothing like living under your own roof!” Of course this is applied in different contexts and living in a rented house is one of them. A good landlord who does not bother you much and who does the needful when needed is a blessing not many have. Neither is a good tenant, who takes care of the house properly is a frequently seen sight.


However, there are certain things within your control when you find yourself scouting for a rented house. Here are some basic guidelines, which should keep you out of trouble. Rental laws again differ from state to state and hence these guidelines are restricted to some general laws.
The verification of these documents are critical, though commercial establishments that take office premises have a legal team to handle the formalities often the lone individual in search of a comfy apartment does not often realize the significance of such things nor do they actually get a chance to verify these details.


Below is a list of important house credentials that can be verified by the person renting the place.


a. Title documents – This is proof that the person renting or leasing out the premises is the actual owner of the place.


b. Share certificates – If the place rented out is part of a co-operative society or colony, share certificates also need to checked.


c. Electricity bills – It is generally in the owner’s name.


d. Verification of built up area of the dwelling place – This is done by a qualified architect.


e. No-objection certificate – This is a certificate that specifies conditions for rent/lease, some do not allow bachelors and may have other forms of bias that is defined in the document.


Rental Agreement


There are several aspects in the lease agreement that you need to be careful about. However, three most significant aspects gain priority over the rest. These include the licence period, the consistency of the license fee through the entire license period, clarity on costs associated with the house such as municipal taxes, society fees and charges etc. The owner is expected to bear such costs, conventionally. There should be definitive clause regarding any deposits given initially prior to renting the house. The legal agreement should clearly state the refund of such deposits when the lease is terminated. This also includes any deposits towards electricity bills, telephone bills etc. Clauses defining what happens if this expectation is not met also needs to be in place. Usually security deposits that are not refunded within seven days of the expiry of the lease are liable to be refunded with interest for each day’s delay.
Care needs to be taken to ensure the landlord does not indiscriminately retain funds from the deposit for supposed damage to the premises etc.


Below is a checklist the landlord needs to bear in mind:


- Estimate the rental value of the place based on market value with some leeway for negotiation for the person willing to rent the place.


- Do a quick reference check of the person requesting to rent the place. Place of employment and designation are good reference points.


- Be specific and clear about the time period of the lease.


- State facts regarding furnishing upfront.


- Keep all critical documents that refer to the credentials of the premises in tact and handy for verification.


Here is a quick check on associated aspects


Signature in the lease agreement – Ensure either the owner or a person who is the authorized signatory for the owner signs the agreement for it to be valid.


Accounting for furnishing- Make sure the lease agreement includes all fixtures and furnishings with an cost estimate of the same also specified.


Plumbing check- This needs careful scrutiny by the person who rents the place. There should not be any malfunctioning or leakages of the plumbing systems and maintenance costs for the same should be included in the entirety of the lease deal. These issues have to be discussed upfront before the agreement is made out, which gives either party to opt out if a common ground is impossible to attain.

Some last words


The usual term of the lease agreement is around 11 months with a notice of 2-3 months for either party to terminate the agreement. Notice clause is a must. The lease can be renewed every 11 months based on mutual consent.
Also, there should be a clause that allows you to retain possession of the house till the any dues that the landlord owes including deposit refunds are cleared.
Be clear about any clauses that denote the breach of contract and see you are well protected. The tenant should also be covered under any circumstance where a sale, mortgage, transfer etc. of the apartment takes place. Here the notice period can be the saving factor, to help you make alternate arrangements.
As the tenant you should be protected against natural calamity hassles. If you have to relocate due to one, you will then not be paying rent for a place you cannot dwell in further.
Also, make sure there are other amenities like car parking, general maintenance etc.
Ensure all legalities are in place and most important of all brush up your social skills to pave the way for amiable relations with your landlord.

Investment in real estate is most profitable | Magicbricks.com Property Pulse

Investment in real estate is most profitable | Magicbricks.com Property Pulse

The demand for housing has propelled, thanks to easy home loan options available to young professionals. These professionals with hefty pay packages want to invest in the housing sector by availing a loan in order to get income tax benefits.

In this context, a home loan becomes a significant propeller of the real estate market. For the past decade or so, a home loan acts as a growth engine for the property market. A real estate investment normally appreciates about 4% or 5% in a year.

By availing a home loan with a margin money of 20%, the rate of return on investment is about 25%, even though the annual rate of return is only 5%. Even after factoring for interest costs and property taxes, the rate of return on real estate investment is highly attractive because of the income tax benefits associated with home loans.

The year ahead will throw open varied home loan options. With the Reserve Bank of India (RBI) coming out with certain restrictions/conditions in the home loan market, the customer, hitherto pampered by banks for the past decade, will be facing a different scenario.

The RBI has been vocal about teaser loans offered by almost all banks/ housing finance companies over the last couple of years. As these institutions offer competitive rates during the initial period of the loan term, the demand for loans has gone up while the economy witnessed a downturn. These loans are risky from the view point of financial institutions as the customers is made to pay higher EMIs from the third year onwards.

The RBI has again categorically requested banks to lend only upto 80% of the value (Loan to Value - LTV) as against the earlier norm of 85% LTV.

A higher margin requirement in this way would definitely put pressure on young professionals with two to five years of work experience, since they need to build more resources to buy a house.

Ever since the global economic setback in 2008, banks/housing finance companies expect their NRI customers to have a sufficient cash balance before approaching them for a loan. A general practice by NRIs over the last seven to eight years, when the economic conditions were normal, was to approach banks/financial institutions for home loans to buy property in their home town, based on their monthly salary alone. But now these lending institutions expect them to shore up more funds other than their margin requirement for buying the property, as the lenders are not sure of their future, career prospects abroad.

Young NRIs with just about three to five years of work experience abroad may find it difficult to avail of home loans in the present scenario, as in most cases, they have only enough savings to fund for actual margin requirements. In the coming years the lending institutions may increase the margin money requirements and may have a different set of rules for NRIs. It may even be possible to lend them only about 60 to 70% of the property cost, as against 80% for resident Indian customers.

Many customers overstretch themselves while buying a property by going for the maximum quantum of the loan. Investors should build up sufficient resources by way of savings before going for a home loan.

It is generally seen over the years that the increase in the home loan interest rate is a cause for concern to the customers, as most of them avail of 85% to 90%of the cost as a loan. If they develop the tendency of availing a loan of 70%-75% of the cost as loan, then the increase in home loan rates, as seen in the recent past will not affect the borrowers much.

Low loan to cost ratio (LCR or LTV) helps the customer in solving the interest rate risk. In the inflationary economy, home loan interest rates are likely to go up in the short to medium term category.

Availing loans from banks/Housing Finance Companies with transparent rules coupled with attractive pre-payment options will be the best option. Customers in such cases can easily prepay the loan whenever there is a rate increase.

Investing in real estate by taking home loans is the best form of investment even with all these likely conditionalites.

Rent-Out property and make investment | Magicbricks.com Property Pulse

Rent-Out property and make investment | Magicbricks.com Property Pulse

The ideal way to make use of your property is to rent it out. Renting out enables you to earn a regular income, and at the same time helps you pay off your home loan comfortably. You can also think of investing in a second home while you get rental returns from your first home. However, you can make the rental income worthwhile by keeping in mind these factors before renting out your property:

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Location

The location of your property can make or mar the chances of getting a good rent. Location is the most significant factor that tenants look for while they scout for homes. Proximity to the workplace, children’s school, medical facilities and shopping centres are often the essentials that tenants look out for.So having a home in areas close to the IT belt in the city, and with connectivity to the ring road and other major roads, will be an added advantage for you. This enables you to command a higher rental.

Spread the word

It makes sense to advertise. When it comes to the text in your advertisement, make sure you capture the reader’s attention by making your rent competitive, give details of the size and quality of accommodation, and its location. Use the three best assets of the property in the first sentence of your advertisement. Also, use the real estate agents to spread the word about the availability of the property for rent.Once the house has been straightened out, develop a list describing what makes the house appealing. Take note of those commonly desirable features such air conditioning and garage. Use rental terms to help ’sell’ the property. Words and adjectives that really help you get a tenant include ’state-of-the-art’, ’stainless steel appliances’, ‘vaulted ceilings’, ‘marble floors’. Be sure to use any and all of the terms that apply to your home.

Arrive at rent

Fix the rent by learning what other rental properties are going for in your neighbourhood. Remember, potential tenants will be scouting around for deals, so set the rent at a competitive price and make sure you highlight all the most valuable aspects of your home.

Furnishing and amenities

Better and fairly well-maintained buildings would fetch a better rent. Also, if your apartment has a range of recreational facilities available, tenants with families would be looking at such facilities to rent. Properties with a good range of amenities provided are popular, affecting the rental value of an apartment.The condition and the internal maintenance of an apartment, including the choice of furnishings, would again play an important role in determining the rentals for the property. The layout of the premises in terms of optimum space use in an efficient manner, terrace or a balcony, availability of maid’s room and toilet help the premises score. The level and storey of the apartment, unobstructed view from the apartment, vehicle parking spaces available, and security features, recreational facilities like a swimming pool, gymnasium, children’s play area would also play an important role in determining the rental value of the premises.

Screen tenants

You need to be able to depend on this person not only to pay the rent on time, but also to keep your home in good condition.To know more about your tenant, consider references from previous landlords, banks and employers. Ask the tenant for his company photo ID card to make sure he is still employed there.

Lease agreement

Once you and the tenant have agreed on the rent, a security deposit, a term and have settled the details, make sure that you have a good lease agreement. This lease agreement should be made on a stamp paper and should encompass all the terms and conditions between you and the tenant.It is better to periodically evaluate the rent and extend the lease on mutual agreement to avoid complications and legal hassles.

Significant clauses in a Home Loan Agreement | Magicbricks.com Property Pulse

Significant clauses in a Home Loan Agreement | Magicbricks.com Property Pulse

One should go through the terms and conditions mentioned in a loan agreement carefully. Most loan agreements give the lender the right to revise the interest rate in case of change in market conditions. In case of floating rate loans, the bank already has such a leverage by default to vary the interest rates. This increase can be done unilaterally, at the option of the bank. The trigger for such a move is any unforeseen change in the money market conditions or the market interest rates.

Prepayment penalty

Another significant clause pertains to repayment of the loan before the due date or foreclosure of the loan. Some banks incorporate a clause regarding this issue. The conditions may range from seeking prior permission of the bank, the lock-in period during which the loan cannot be repaid and charges payable on foreclosure etc. Some banks levy prepayment penalty in case the loan is repaid before the full term or a certain agreed minimum period. The logic given by the banks is that it disturbs their cash flows and income estimates.

The amount varies from 1-5 percent of the outstanding amount of loan. However, many banks waive off these charges. In case these charges are applicable, they should be payable on the balance amount outstanding and not on the total amount of loan sanctioned.

Switchover charge

Then there are clauses related to switchover charges. In case you decide to switch over from one bank to another because the other is offering you better terms, some banks charge a penalty. However, if the loan is repaid out of your own funds, these charges may not be payable. This is done to avoid predatory pricing by banks.

Penalty for delay

Then there can be clauses on the penal interest payable in case of default or delay in payment of an EMI or dishonour of a cheque. Some lenders contain a condition that a change in the job of the borrower needs to be informed.

Disbursement date

There is a clause regarding the timing of disbursement of the loan. Some agreements treat the date of the cheque as the date of disbursement. Others treat the date of payment advice as the date of disbursement. Some treat the date of actual transfer of funds as the date of disbursement. There is a difference in these dates and as such affects the interest element.

Some loan agreements provide that the disbursement will be deemed to have been made to the borrower on the date on which the cheque or payment advice has been sent, irrespective of the date on which the disbursement may have been received by the borrower. As such, the borrower becomes liable to pay interest for the period even before he has actually received the loan money.

Restriction

A few banks have clauses which restrict borrowers from leaving India on employment or business for a long term before repaying the loan.