WARY OF WAKF | ||
| There’s a ruckus over the Wakf (Amendment) Bill, 2010. V. Kumara Swamy investigates why the bill is getting lambasted from all sides | ||
When the Wakf (Amendment) Bill, 2010, was passed in the Lok Sabha a year ago, everyone thought that the amendment was a progressive step that would help improve and streamline the administration of wakf properties across the country. However, a year down the line, when the bill is awaiting approval in the Rajya Sabha, many Muslim organisations have begun to express their scepticism over it. Right from the definition of wakf properties to the powers of the proposed wakf tribunals, many provisions of the bill are now being questioned. The term “wakf” refers to a donation or an endowment in the form of land or money that is placed in a trust. The proceeds from the trust are used for charitable purposes such as the running of schools and hospitals or even the upkeep of mosques. Estimated to be worth a staggering Rs 1.2 lakh crore, wakf properties across the country are administered by the state wakf boards. The Wakf (Amendment) Bill, 2010, prohibits the sale and gifting of wakf properties and proposes stringent measures against encroachers. It also suggests the setting up of tribunals to look into disputes related to these properties and proposes changes to the Central Wakf Council and the state wakf boards, besides making a provision for the representation of women and professionals in these bodies. However, some consider the bill flawed right from the way it defines the word “wakf”. It is described as a “permanent dedication by a person professing Islam, of any movable or immovable property for any purpose recognised by the Muslim law as pious, religious or charitable.” Experts point out that this definition is completely wrong as there are several wakf properties in the country that have been donated by Hindu, Sikh and even British rulers. “If this definition is accepted, it will lead to new problems like land disputes,” says Abdur Rahman Quraishi, spokesperson of the All India Muslim Personal Law Board (AIMPLB). Others complain that the government should have amended Section 87 of the original Wakf Act of 1995 in the new law. The section states that “no suit, appeal or other legal proceeding for the enforcement of any right on behalf of any Wakf which has not been registered in accordance with the provisions of this Act, shall be instituted or commenced or heard, tried or decided by any court.” In other words, unless a wakf property is legally registered, one cannot seek to enforce a trust’s right to it. Muslim organisations such as the AIMPLB want this section scrapped. As Quraishi explains, “There are thousands of villages and towns where auqaf (plural of wakf) haven’t been registered because people are simply not aware of the rules. Because of this provision, wakf boards lose enormous amounts of land and property to encroachers. The latter are well aware that no action will be taken against them if they usurp unregistered land.” However, some allege that organisations opposed to Section 87 are not telling the “whole truth”, and that they have a vested interest in keeping wakf lands unregistered. “According to the rules, auqaf cannot be sold. Making registration mandatory would mean losing control over these vast tracts of land that could be sold for profit by the caretakers and corrupt wakf boards,” says a member of the Central Wakf Council in Delhi. According to some estimates around 40 per cent of all wakf lands have been encroached on by governments and private individuals and organisations. The AIMPLB has demanded a comprehensive survey of the entry of wakf properties in the state revenue departments so that the wakf lands “encroached” on by the governments can be listed and also returned or compensated for. A persistent complaint of wakf boards is that they are not equipped with adequate powers. Says Ahmed Khan Pathan, a Pune-based advocate and a local wakf board member, “Governments have failed to gauge the importance of auqaf and their worth. The amendment bill too fails to address the issue of giving more powers to the boards.” Wakf boards allege that the government has simply not given them enough powers to go after the encroachers. “Every time we have to approach the district administration and ask it to file a complaint against the encroachers. This is a complete waste of time. We should have the power to file FIRs directly,” says Mohammed Irshadullah, chairman, Bihar State Sunni Wakf Board, Patna. Still, there is no doubt that the amendment bill has taken some steps to tone up the functioning of the wakf boards and tackle the problem of resolving disputes related to wakf properties in a more efficient way. It suggests the setting up of a National Wakf Development Corporation and State Wakf Development Corporations to “facilitate proper utilisation of valuable wakf properties.” What’s more, it also proposes the formation of wakf tribunals to see to all disputes. While most leaders of the Muslim community have welcomed this proposal, they are uncomfortable with the idea of keeping these tribunals under the control of a Wakf Council, which is what the bill suggests. “The tribunals are a good step. But since the Wakf Council will be a nominated body of the government, the tribunals’ independence will come under a cloud,” says Quraishi. The barrage of objections to the bill seems to have shaken up even those who voted in its favour in the Lok Sabha in 2010. For example, Maulana Asrarul Haque, a Congress MP from Bihar who voted for the bill, is now being more circumspect. “Now that the bill is being examined by the select committee of the Rajya Sabha, I hope it will look into the grievances of the community and come up with the necessary changes,” he says. However, it is not as if the bill is being lambasted in its entirety. Members of the community acknowledge that it has many positive features. One such is the provision that increases the period for lease and sub-lease of wakf properties from three to 30 years. “Because of the three-year limit, we couldn’t attract anybody to develop these properties. But now that we are allowed a longer lease period we can develop our properties and earn money which can be used for the good of the community,” says Salawat Khan, former chairman, Rajasthan Board of Muslim Wakfs. It remains to be seen how far the select committee of the Rajya Sabha goes to address the concerns and demands regarding the Wakf (Amendment) Bill. Perhaps Khan echoes the sentiments of most members of his community when he says, “A comprehensive law on wakf is the need of the hour, so I hope the bill will see the light of the day very soon.” |
Tuesday, May 31, 2011
The Telegraph - Calcutta (Kolkata) | Opinion | Wary of wakf
Babus turn out to be canny investors - The Times of India
The statements posted on the department of personnel and training website shows how babus are canny investors since most of them own several properties. Greater Noida is the most preferred investment destination, followed by other parts of the sprawling and rapidly expanding National Capital Region.
Perhaps, Greater Noida figures prominently because several cooperative housing societies for government officers are being built in the upcoming township.
Among officers who own property in Greater Noida are cabinet secretary-designate A K Seth who owns a plot worth Rs 5.86 lakh; former Delhi chief secretary Rakesh Mehta whose house has a declared market value of Rs 3 lakh; Pulok Chatterji, UP cadre officer and executive director World Bank, who has paid for an under-construction four bedroom flat worth Rs 67.75 lakh; member secretary Planning Commission Sudha Pillai, who owns a flat worth Rs 53.55 lakh and additional secretary (MHA) Vishwapati Trivedi, a 1977 batch MP cadre IAS who owns a house worth about Rs 36 lakh.
Any senior bureaucrat on Central deputation possesses a plot or flat or house in Greater Noida. It is also a favourite destination for babus of AGMUT cadre, who are usually posted in Delhi at some point of their careers.
Officers, irrespective of their ranks, own several properties. However, there are some exceptions among senior officials, whose returns show that neither they nor their spouses own real estate. Many officers have not filled in the column on current market value on the plea that they have not ascertained it. There are some declarations, which appear suspect at first glance.
IAS couple Arvind and Tinoo Joshi, who are facing charges under the Prevention of Money Laundering Act, have declared that they own two agricultural plots in Secunderabad Village in Bhopal, whose current market value is about Rs 1.60 crore and a HIG flat in Dwarka in the national Capital worth Rs 60 lakh.
Their total net worth of real estate is about Rs 25 lakh more than the alleged cash seizure of Rs 2 crore from their residence during the income tax raids. The couple is also alleged to have made transactions of Rs 250 crore in the capital market just ahead of the raids. Enforcement Directorate has estimated that the couple is worth more than Rs 350 crore.
Former NDMC chairman Parimal Rai, who was one of the officers indicted in the Shunglu Commission report, has declared eight properties, including two flats in posh Green Park. He has valued the flats at Rs 10 lakh each, which is out of sync with the current property prices in the city. His other possessions include a four-bedroom deluxe flat in Lucknow, and a plot in Ghaziabad. A K Mehta, a J K cadre 1978 batch joint secretary in Union urban development ministry, owns 10 immovable properties, including three plots – two of which are in Golf City (Noida sector 75) worth Rs 37 lakh each – and a property in a Dwarka mall worth Rs 16 lakh.
Monday, May 30, 2011
HC cancels land acquisition in Greater Noida - India News - IBNLive
New Delhi: The Allahabad High Court on Monday cancelled the acquisition of 170 hectares of land in Gulistanpur in Greater Noida.
Over 100 farmers had approached the High Court against the land acquisition and the petition was being heard for three to four months in the court.
The Uttar Pradesh government considered transferring a part of the land to private real estate developers.
However, the Allahabad High Court struck down the acquisition and has also ordered to pay for any monetary loss to any farmer.
This is the third time that the Allahabad High Court has cancelled land acquisition, therefore, putting a question mark on the land acquisition policy.
New Act to ensure rents at market rates - The Times of India
The housing ministry has prepared the Model Residential Tenancy Act, 2011 that is intended to replace archaic rent control legislations that capped rentals, resulting in landlords getting a pittance for properties in prime localities in metros.
The draft legislation -- which is yet to be adopted by the states – has proposed that once the law is in place, in case of tenancies entered after notification, the rental will be based on an agreement between the landlord and the tenant.
For existing ones, including those properties where rent was finalised several years ago, there will be a freeze on revision for 24 months. In the 22nd month, the landlord will be able to seek a revision. And, in the absence on an agreement, the landlord will have the option to terminate the tenancy.
Though rent control is a state subject, the Centre is seeking adoption of the model law by mandating that only states that enact this law would be eligible for funding under the flagship Rajiv Awas Yojana that has a budgetary allocation of over Rs 800 crore in 2011-12 and comes with other benefits such as interest relief.
The Centre is of the opinion that the current legal system has discouraged landlords from reinvesting in their properties as rentals have been kept artificially low. The ministry has estimated a housing shortage of around 25 million in the country and by allowing for increase in rentals, the government in encouraging property owners to let out their properties and ease the deficient supply of dwellings.
The ministry is drawing inspiration from the Jawaharlal Nehru Urban Renewal Mission that got several states to repeal the Urban Land Ceiling and Regulation Act (ULCRA). Under the scheme, central assistance was contingent upon states repealing the law.
There are also clauses that have been built in to protect the interests of tenants. To check against arbitrary hike in rents, the revision would be based on terms set out in the agreement signed by both the parties. In addition, a three-month written notice has to be given before the increase.
The tenant will, however, have to provide a termination notice in case the revised rent is not acceptable. Else, it would be deemed as acceptance of the new terms.
To expedite the process of settling disputes, which often linger for decades at present, the model law provides for reference to a Rent Tribunal to revise or fix the rent.
Home Staging Ideas: 10 Features that Date a Home
10 Features that Date a Home
1. Yellowed plastic or rusty metal
- Light switch plates and plastic vent covers that have yellowed with age not only look old, they make everything else appear dingy.
- Check out your central air vents. Have they seen better days? Rust reflects age and lack of care.
Remedy:
Replace light switch plates with new ones that coordinate with the style and décor of your house. They cost pennies, but add great value to your home in marketability. For vent covers, try painting with white spray paint, or another color if you prefer. This is another inexpensive means of brightening and freshening the home for sale without breaking the bank, or taking a great deal of time! Metal vents can be replaced at a bit more cost, but are still a very reasonable and affordable update.
2. Light Fixtures
- Exterior lights can be seen from the street and impact curb appeal. Outdated, dangling or broken lights with missing bulbs can seriously limit curb appeal. While most home buyers visit inside your home during the day, they likely drive by multiple times before, and hopefully after, seeing your home and buying it!
- Inside light fixtures can be seen within seconds of entering a home, and out of style, dirty light fixtures can negatively impact first impressions.
Remedy:
Replace lights with more contemporary fixtures that accent or complement the house and yard. Clean any light fixtures that are acceptable, but grungy. A small investment of time and money will increase the marketability of the house, and may improve the home’s value. Don’t let ugly or out of style lights hamper the sale of your home.
3. Carpet or Flooring
- Shag carpet or linoleum from the 70’s or 80’s that has seen better days is a real negative to potential buyers.
- Broken or loose tiles deflect potential buyers.
Remedy:
Replace carpet with a neutral berber or cut loop. Better yet, consider hardwood floors. They look beautiful, are easy to maintain, and are better for allergy sufferers.
Replace broken tile pieces, or replace the flooring. This is a great opportunity to update your home with newer colors and textures. Remember, it is better to spend $5,000 replacing and fixing, than to drop the price of your house by $10,000 or more for a flooring allowance!
4. Walls
- Paint that is faded, discolored, peeling or scuffed is a sure sign of age.
- Wall paper in “vintage” patterns, or that is peeling or torn.
- Paneling . . . need we say more? Seriously, unless the cottage or cabin look is popular in your market, this can be a rapid deterrent to many potential home buyers!
Remedy:
Paint walls with fresh, neutral colors. Remove wall paper altogether! Taste in wall paper is very personalized and is more likely to repel than invite potential buyers. Dark paneling, even if it is the highest quality, can be room darkening and dated. Consider removing wallpaper or paneling, or refinishing to brighten a room. Brighter rooms feel bigger!
5. Doors
- Hardware that is worn, rusted, loose, difficult to operate or out of style not only dates a home, it is a security risk and reflects neglect.
- Dingy appearing doors say “old and poorly cared for” right at the front entry.
Remedy:
Thoroughly scrub all doors. Paint and repair if necessary. Even consider replacing the door to reflect a more contemporary style, or add light to a dark entry. The front door is what home buyers see first after the curbside look!
6. Appliances
- Golden rod and avocado green appliances may be nostalgic, but were popular a generation (or two) ago and suggest that appliances may be at the end of their life span.
- Refrigerators with compartments for an ice block reflect a love of antiques, but will not appeal to the average potential home buyer.
Remedy:
Replace appliances that are worn, outdated by 10 years or more, or have broken attachments. Newer appliances are more energy efficient, make your home look fresher, often come with a warranty, and are sure to appeal to the average home buyer.
7. Faucets
- Leaky, corroded faucets are a sure way to wash a home sale down the drain.
Remedy:
Repair or replace! If the faucet is old, and was contractor grade when the house was built, update! Many affordable and stylish faucet options exist. If you lack basic plumbing skills, many hardware supplies offer installation services.
8. Bathrooms
- Small mirrored ”medicine” cabinets or large unframed mirrors may be functional but lack style, and are out of sync with contemporary home buyers’ desires for a luxurious and pampering environment.
- Pink, gray or baby blue tile reminiscent of the 60’s may be attractive to a few retro lovers, but lack the warm, earthy feel currently sought by home buyers.
Remedy:
Remove older “medicine” style mirrored cabinets. Hang a stylish mirror instead, and update the lighting for a brighter more stylish appearance. If you have large mirror panels, consider framing sections to accentuate separate sinks.
9. Ceiling fans
- Brass and glass are a thing of the past!
Remedy:
Ceiling fans provide excellent air circulation and reduce energy costs. Make them a stylish feature of your home. Whether your home is contemporary, tropical, or transitional, there is an affordable option to suit your needs. Many come with light kits to illuminate as well as accentuate your space. Avoid ceiling fans in dining areas and kitchens. Consider chandeliers or pendant lighting.
10. Window treatments
- Mini blinds are outdated dust collectors sure to embarrass the most fastidious housekeeper.
- Dark, heavy drapes resembling theater curtains are depressing. They also detract from views and block precious light that home buyers demand. Drapes should add style and drama without overpowering or darkening the room.
Remedy:
Remove blinds and curtains and let the light in! If you need privacy, consider attractive shades and curtains that enhance the view and surroundings, and can be raised or opened readily so that potential buyers can see themselves in your home!
Home Staging Ideas: 10 Ways to Protect Your Privacy When Marketing Your Home
10 Ways to Protect Your Privacy When Marketing Your Home
You have managed to clean, declutter and depersonalize, but have you ‘privatized’ your home? Perhaps you know and trust everyone in your community, and feel that you have nothing to hide. Think again!
Leaving personal information for others to see may have significant consequences for you. First, while most people are kind and decent, and will respect your belongings, others will not. Second, bad things can happen to good people! The best advice here is to perform an ‘ounce of prevention’ to prepare for the worst case scenario.
Burglars, identity thieves, employers, and stalkers may enter your home as a potential buyer for the sole purpose of obtaining valuable information!
Disarming burglars, stalkers, and identity thieves are some of the best reasons to privatize your home prior to placing the “For Sale” sign in your front yard. Equally important reasons to protect your privacy include preventing potential home buyers from having an unfair advantage!
Burglars may watch your house to learn the general routine of household members, then review the layout with a guided tour from a real estate agent before violating your security and taking your prized valuables. It is not uncommon for burglars to enter the home as a potential buyer, and leave a door or window unlocked for later access.
Identity thieves are on the lookout for any and every piece of valuable, private information they can get their hands on! Bills, checkbooks, social security cards, voter’s registration cards, birthdates, pay stubs are just a few items that contain information valuable to an identity thief.
Employers past, present or future may be surreptitiously seeking valuable insight to your loyalty, lifestyle habits, risky behavior or potential health risks that may adversely impact health insurance costs!
Finally, the average potential home buyer may obtain a significant advantage in bargaining power if they saw the calendar circled with your move date, or the meeting with the mortgage broker regarding your home loan. Stacks of second notices for bills can imply that you are desperate to sell, and will settle for far less than your asking price.
What should you do to minimize your risk of invasion of your privacy?
1. Remove ALL private or personal photos, diplomas, awards, and trophies.
2. Remove any and all calendars! These often contain a great deal of private information that could be used to your detriment.
3. Remove ALL valuables. Consider placing them in vaults, or boxes which can be secured or easily carried with you.
4. Remove ALL bills, letters, magazines and library books. Shred papers with personal information that are no longer needed.
5. Password protect your computer to block access to your private files.
6. Turn off your printer and fax machine before each showing. Printers and fax machines often have the capability of printing the last numbers dialed or received.
7. Turn off answering machines. This avoids personal messages being left while strangers are in your home.
8. Unplug and remove phones. Many phones have caller ID.
9. Remove or conceal all digital devices that contain information about you or your family (i.e., cell phones, personal digital assistants, iPods, USB drives).
10. Do not list personal names or phone numbers on handouts or flyers with information on your property. Real estate agents should be the only ones with access to your private phone numbers.
Sunday, May 29, 2011
Harayana lays down details mandatory for realty ads - Times Of India
MCD seeks to empanel structural engineers - Hindustan Times
City mapped, database to be used from Aug 1 - The Times of India
The Act has been notified by the office of the lieutenant-governor, Tejendra Khanna, and is aimed at ensuring effective e-governance. The database provides a ground-based actual information system that details infrastructure and utilities above ground, on the ground and below the ground up to 12 feet with maps. It spans 1500 square kilometres of the capital.
In a presentation made before urban development minister Kamal Nath on May 24, the IT department focused on some peculiar problems faced in governance in the capital. It was pointed out that since there are too many agencies like MCD, DDA, DJB and state departments, coordination and the decision-making process is cumbersome. The e-governance effort that will link departments with the database is being seen as an effective way to bridge the gap and cut down on red tape.
According to Delhi's information technology secretary, Savitur Prasad, the departments will have direct access from their computers to live data on secured communication networks. About a hundred departments have been linked with the system. "Some are already using the data. Others are verifying the information and there are others who are carrying out training to use the data. The platform will allow users to update the database and also make their project plans sitting before their computer screen," Prasad elaborated. Starting August 1, departments will be expected to submit the status of projects on the platform so that other departments can access the information and plan accordingly.
For instance, the database shows that there are about 48 lakh buildings in Delhi. Using this data, the MCD can track properties that are evading tax and issue notices. Similarly, in case of unauthorized constructions, the department will be able to see the building status through the high-resolution maps and check the status of a property on the platform. Verification on the ground will then reveal if any unauthorized construction has been done. The e-governance initiative under the new Act will also allow direct monitoring through the control room at Delhi secretariat in case of a natural or manmade disaster.
The Delhi State Spatial Database Infrastructure project is an interconnected 3D global information system. It involves capturing geographical and urban features for systematic coordinated urban planning, project implementation and overall governance.
Saturday, May 28, 2011
Denied Games flats, owners approach HC - Indian Express
Business Line : Features / Investment World : Land row aftershocks hit Noida Extension
Once a bustling hub for property business, the road to Noida Extension now wears a deserted look. With the mercury soaring in Delhi NCR, one would rather stay indoors than brave the heat to go house hunting. But this summer, the sales agents of housing projects along this dusty stretch have an additional challenge to deal with – the very feasibility of the projects.
It is now almost 20 days since the Allahabad High Court struck down acquisition of over 150 hectares of land in Chak-Sahberi village at Greater Noida (dubbed Noida Extension by builders). For the large cluster of housing projects in this area, there seems to be no end to the uncertainty looming over the fate of these projects. If anything, worry lines have deepened with each passing day.
BOOKINGS PLUNGE
Over the past weeks, bookings in the market have fallen 30-40 per cent, says Mr Anuj Choudhary, Director of Panchsheel Buildtech. Industry observers reckon the figure is closer to 70-75 per cent.
Builders are attempting to put up a brave face to the crisis – some claim the worst is over and that market is getting back on its feet. Others shrug off downcast sentiments as a temporary blip. But brokers and property agents have a different story to tell. A site visit reveals just how unnerved the market is. “Hardly any follow-ups are taking place, and fresh bookings are on hold. The entire area is feeling the heat,” says a broker on conditions of anonymity.
His colleague, who shares the temporary sales stall — one of many lined up along the road - says fresh client walk-ins have tanked from the previous average of 25-30 enquiries over weekends, to just 4-5.
“It is not the builders' fault, it is a dispute between farmers and Greater NoidaAuthority,” he says but then grudgingly admits that ultimately it is the buyer who bears the brunt.
As such, Noida Extension reportedly has projects by 50-55 developers planning an overall 10,000 units, but there is no official word on how many proposed units fell on Chak-Sahberi land (only parts of Sectors 16 B and Sector 4 are impacted).
For the record, affected builders Amrapali (its Smart City project alone talked of 5,700 units) and Mahagun have offered customers a refund or option to shift to other projects nearby. Other like Supertech claim that no construction had commenced on the portion of land parcels under dispute.
BUYERS IN PANIC
But with thousands of existing buyers in panic over the fate of their booking, potential customers in the market have, overnight, turned risk averse.
A property agent, who markets projects for multiple builders in the area, notes that enquiries – occasional ones that trickle in – begin on the note “what is the guarantee that your projects will not be hit in future!”
A few kilometres away at the marketing office of Shree Builders, an irate customer wants to know the status of his apartment booked in SkyGarden project. The particular project is safe, he is told. But a verbal affirmation is hardly enough to soothe frayed nerves. “How do I know that my tower has not been affected? Who is to say exactly where the village starts and ends?” he fumes.
Sales representatives at Gaursons India are handing out press clippings which list specific sectors and projects hit by the High Court ruling. This helps clear the air over its ongoing projects that, it claims, are not directly affected.
WHY THE CONFUSION
“There is a lot of confusion on just how many units in the market have been impacted overall. This is because the Greater Noida auctions have been through plot numbers and not Khasra numbers (village land denomination),” says Mr Manoj Gaur, Managing Director, Gaursons India.
In fact, the builders' association CREDAI has requested Greater Noida Authority for a letter that will clearly outline which plots have been hit and to what extent, he adds. Prices, at least for now, remain where they were. But that could change depending on the direction of talks between the authority and farmers.
So will Noida Extension's loss yield unexpected gain for other locations – Noida, Indirapuram, Vaishali, Vasundhara, or even Raj Nagar Extension?
The opinion varies. “There is no match for infrastructure and prices that Noida Extension offers. It is only a matter of 2-3 weeks and things will return to normalcy. Already there is talk of compensation and settlement between the authority and farmers,” says Mr Choudhary of Panchsheel Buildtech.
Others are not as optimistic. “Consumers will explore ready-to-move options in Noida and Indirapuram. Given the prevailing uncertainty, they will hesitate to lock up funds into projects which have 2-3 year completion timeline,” says a real estate marketer.
Clearly the last word, on aftershocks emanating from the Greater Noida land battle, is yet to be written.
RBI asks banks to reimburse failed ATM transactions in 7 days - Hindustan Times
National Real Estate Development Council
Says B.N.S. Ratnakar, gen- eral manager, Central Bank of India, “Each bank has its own properties that are put on auc- tion. Chances are that people get discounted prices.“
But where do you find such properties and what is the buy- ing process? Here's all you need to know about such deals.
Which properties Usually, these are distress properties that are sold at a price lower than the actual market price. Apart from factors re- lated to location and title disputes, a property becomes distressed in cases where the own- er is not able to repay the loan taken for buying it. The bank, in turn, sells such properties at a value lower than their actual market price to recover the loan.
“The bank or the auctioning authority appoints a valuer to calculate the value of the prop- erty. The valuer gives a fair val- ue to the property. It is usually seen that the value is not spec- ulative, which is the case with other properties being sold in the secondary market. Al- though it is difficult to predict how cheap are these properties but typically, the property is 15-20% cheaper than the market value,“ says Amit Mishra, a New Delhi-based lawyer specializing in property-related cases.
The Debts Recovery Tribunal (DRT) authorizes the sale of properties under two Acts-the Recovery of Debts Due to Banks and Financial Institutions Act and Securitisation and Reconstruction of Financial Assets and Enforce- ment of Security Interests Act.
How to find properties The only way to find out about such properties and when are they getting auctioned is to keep a close eye on regional and nation newspapers. Banks and courts publish notifications of such auctions in newspapers.
“As per the directives of the DRT, the notice gives the date of auction. Other details such as property price, location and name of the owner are also mentioned. It also gives names and addresses of the bank branch and authorizing officer or the recovery officer (often called official liquidator) of the sale,“ adds Mishra.
The bank ensures that the property is vacant at the time of auction.
The auction The bank notice invites bid- ders for the auction. However, there is a procedure to follow before you can actually become a part of the bidding process.
You need to submit token money, usually 5-10% of the property value, to the recovery officer or the bank officer su- pervising the auction. “Usual- ly, there is a period of one month between the announcement of the auction and the actual auction date. Therefore, there is ample amount of time for you to arrange for the ear- nest (token) money,“ says New Delhi-based real estate consul- tant Pradeep Mishra.
Apart from the token money, you will be required to submit copies of your permanent ac- count number (PAN) card, bank savings account proof and address proof. The token mon- ey will be returned to you in case you don't win the auction.
The bidding process: The process is regular, where par- ticipants bid a price and the highest bidder gets the proper- ty. The authorizing officer closes the bid by mentioning the name and address of the winner. Just after the bidding process, the property will be signed in your name. You sim- ply need to collect the papers and keys to the property from the authorizing officer.
After the auction: Apart from the token money, you will have to arrange some more money in case you win the bid. “If you win the auction, you will also need to deposit another 25% of the property value with the re- covery officer within the next 24 hours,“ adds Mishra.
In the next step, you will have to pay up the remaining money in the next 15-20 days of the bid. For this, you are al- lowed to apply for a home loan. Sometimes the bidding bank itself will extend you the loan amount. Like in other properties, you also have to bear registration and stamp duty costs. Watch out for Though the process looks simple and the deal good, there are a few things you must consider before buying such a property.
Condition of property: All distress properties are not in good condition and the bank or the court will sell it in its ex- isting condition. In other words, you may have to spend extra for repairs. Says a Gur- gaon-based broker who deals in property auctions, “It has been observed in some cases that properties are not in good condition from inside. There may be leakages or some struc- tural damage. So you may re- quire additional amount for some repairs and construction.
The properties are generally sold on `as is where is' basis condition.“
Dues from the past: “You should also make enquiries re- garding any arrears of property tax and electricity bill dues be- fore participating in the auc- tion,“ said the broker quote above. Banks or courts do not include such dues in the price of the property, neither do they settle them before the auction.
Litigation: There are chances that the auction can be challenged in DRT by other participant bidders. The authorizing officer may or may not accept the application, but the case may even be taken up in a civil court. If the matter goes into further litigation, the possession may get delayed. If you lose the case, the DRT will simply return your invested amount with interest, as per the applicable norms and the property will be auction again.
While you will spot such deals in the market, you may have to wade through a collec- tion of speculative real estate agents to actually get it. Apart from that, you need to have a lump sum to get into such a deal since you need to pay about 30% upfront.