Home Insurance - Points to be noted By: Unknown No comments

M Ravichandran, President – Insurance, TATA AIG General Insurance Company Limited explained home insurance and its importance. Home insurance is still at a nascent stage in India and the awareness for home insurance in our country is not very high. Gradually, with the growing real estate sector, home finance has emerged as an indispensable part of real estate. Natural disasters, such as earthquakes, floods and tsunami have also led home owners consider insurance for their homes.

Numerous Home Finance Companies (HFCs) are offering home insurance policies while providing home loans in India. In order to safe guard their interest on the property, they have financed against natural calamities, fire or its allied perils encourage their customers into choosing insurance for the home structure. Most insurance companies also offer personalised policy plans to suit the owner’s needs and budget.

Some key points which one should keep in mind while opting for home insurance are:

Sum-assured calculation - It is calculated by multiplying the built-up area of your home with the construction rate per square foot. Construction cost depends on the type of construction of the building and can easily be obtained through the builder, architect or local engineer.

Premium Costs - The premium cost depends upon a wide range of factors. If the cover is opted for structure and the contents of the house against fire and allied perils such as natural disasters, then the premium may not be very high.

Benefits offered by home insurance are as follows:

Fire: This covers explosion / implosion, aircraft damage caused by aircraft, riot, strike, malicious damage cover, damages due to impact by rail / road vehicle or animal, bursting and / or overflowing of water tanks, apparatus and pipes, missile testing operations, leakage from automatic sprinkler installations, lightning, loss caused by storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation, destruction by subsidence of part of the site on which the property stands or landslide and bush fire.

Cover includes: Building, contents, rent for alternative accommodation, covers additional expenses on rent incurred by you in case of loss or damage to the premises caused by an insured peril rendering the premises unfit for occupation and forcing you to shift to an alternative accommodation for a maximum period of 30 days, impact damage by own vehicle.

Public liability: Covers your legal liability as a house owner towards others (third parties) and your domestic helps.

Burglary and theft: Provides cover to the contents of the house against burglary and theft. Any resultant damage to your house subject to a maximum payment of 10 per cent of the benefit sum insured or Rs 5,000, whichever is less.

Purchase protection: It provides automatic protection for newly purchased articles against fire and burglary up to 30 days from the date of purchase.

Pedal cycle: It covers your pedal cycle comprehensively against accidental damages. Additionally, it also covers liability towards third party injury and/ or property damage up to Rs 10, 000 only.

Plate glass: Securely fixed plate glass (e.g. windows) is covered against accidental loss or damage resulting into breakage.

Baggage: Your accompanied baggage is protected even while you travel. Any accidental loss or damage and theft of personal baggage during the travel is covered anywhere in India.

Audio visual appliance: It covers fire, burglary, theft, legal liability, accidental damages and breakdowns associated with audio and audio visual equipment

Domestic appliance: It covers your domestic appliances like refrigerator against the risk of unforeseen and sudden mechanical and /or electrical breakdown.

Expenses for temporary resettlement: In case your home has been rendered uninhabitable due to fire, Home Secure covers the cost of packing and transportation (up to specified limits) of your household goods to an alternative residence.

The covers available under Home Insurance are comprehensive and can be customized to cater to individual needs of each customer. It is recommended that all customers consider opting for a comprehensive home coverage from a reputed company that has a good track record of efficient claims servicing to its customers.

Legal advice to buying property: All you want to know By: Unknown No comments

If you are planning to buy a home in near future, you must be aware that there are several legal aspects points to take care of before you invest your hard-earned money in a property. You not only have to select a property that meets your requirements, but also have to find out that the property is legal or not.

When it comes to the legality of the property, there are several aspects to it that should be addressed at the time of buying a property. There are several key documents of the property that must be obtained from the seller, without which your purchase will not be deemed legal. Such documents include Letter of allotment, Sale deed, Sanctioned plan, Society documents, encumbrance certificate, Sale agreement and more.

The sales agreement, for instance, is a very important document in the process of sale or purchase of property as it spells out the terms and conditions under which the seller is selling the property, and also the terms and conditions under which the buyer is purchasing it. This agreement facilitates swift and quick culmination of transactions without any disputes. This agreement also covers the conditions through which the parties give consent to perform certain acts. The sale agreement legally compels the seller and the buyer to the terms and conditions.

The documents of the property should be scrutinized by the buyer even before looking at the property. It is important for the buyer to insist on checking the original documents before finalising the deal. The letter that confers allotment of the property to you from the relevant society or authority is a primary document you need to have in order.

It is very important to see the legal background of the developer in whose project you are planning to invest. Ask for the land allotment papers and a copy of the sanctioned plan of the building. Do check for the penalty clause in the sales agreement in case of delay.

Realty Industry Hails Rate Cut by RBI! By: Unknown No comments

From RBI

The real estate industry on Wednesday hailed the Reserve Bank of India's decision to cut repo rate by 25 basis points, or 0.25 per cent, saying the move will help the sector tide over the liquidity crisis.

"The reduction in repo rate by 0.25 per cent is an excellent move as this should help the industry and business in general to tackle liquidity crisis. In fact, there is further scope to ease the credit policy," Confederation of Real Estate Developers' Association of India (Credai) chairman Lalit Kumar Jain said.

The Reserve bank of India reduced the repo rate from 7.75 per cent to 7.5 per cent with immediate effect.

"Given that the recently-presented Union Budget did not have any major announcements aimed at directly boosting home buying to lift the listless real estate sector, there were higher expectations from the RBI by the stakeholders. Housing developers have been anxiously hoping for interest rate cuts to spur home buyers into making purchase decisions," Cushman & Wakefield executive managing director-South Asia Sanjay Dutt said.

He further said the hike in service tax rate from 12.5 per cent to 14 per cent will increase the costs of buying and unnecessarily prolong the rebound of housing sales.

"Even while the magnitude of the rate cut is 0.25 per cent, the move will build the confidence of developers and buyers alike that there are more rate cuts in the offing, provided of course, that inflation maintains its downward trend or remains stable," Mr Dutt said.

"This move is set to benefit the entire real estate sector. A rate cut would help in bringing down the mortgage rates and at the same time secure more working capital. The impact on borrowing cost is also encouraging as a 0.50 per cent reduction in borrowing cost can reduce the interest cost substantially by 10 per cent," HDIL vice president-finance and investor relations Hariprakash Pandey said.

"With two cuts in a span of one-and-a-half months, the apex bank has given the right signals and it's time banks reciprocated. The impact of the cut has already been felt in the market with Sensex scaling 30,000 mark and this reduction will boost the morale of consumers, investors and India Inc," Omaxe chief executive Mohit Goel said.

Echoing similar views, Tata Housing managing director and CEO Brotin Banerjee said, "The rate cuts announced in January had not translated into action by banks, but a cumulative cut now amounting to 0.5 per cent will enhance lending powers of the banks. It will permit banks to cut down interest rates on home loans."

Govt. Says: Over 31,000 affordable flats are about to launched in Gurgaon By: Unknown No comments

Gurgaon

The Haryana government said on March 11 Gurgaon's realty space has provisions for 31,736 flats in the economically weaker section (EWS) and affordable housing categories and asked realtors for a status report on such houses in the city.

It also said formalities on allotment of 14,500 flats and plots under both categories had been completed and the allotment scheme could be floated any time by state housing board and HUDA once the modalities are finalized.

Chief minister Manohar Lal Khattar confirmed he had asked for a status report while replying to a question in the assembly by Gurgaon MLA Umesh Aggarwal on the status of affordable and EWS homes in the city since 2000. Khattar also said the government would compile a detailed report on affordable housing within three months.

The 31,736 flats that are to be built in the EWS and affordable categories are a part of 208 group housing colonies for which the government has approved building plans. Of these, a total of 7,478 flats have already been allotted. Besides, the government also plans to set aside 7,064 plots for EWS and affordable housing, 4,556 of which have already been allotted.

Officials said like in Gurgaon, the department of town and country planning was planning to clear housing licences in other urban areas of Haryana too. Since September 2014, when the Election Commission notified the assembly polls in Haryana, the town and country planning department had stopped issuing change of land use (CLU) permissions for private colonizers and the ban has not been lifted yet.

Home loan: RBI reduces burden on buyers, industry calls move ‘Insufficient’ By: Unknown No comments

HOME LOAN:

If the Budget turned out to be a non-event for the real estate sector except for benefits to Real Estate Investment Trusts (REITs), the Reserve Bank of India last week offered some relief to home buyers, especially those belonging to the low-income category and for houses that may fall in the affordable category or in Tier II and Tier III cities.

In a bid to reduce the burden on buyers purchasing house costing up to Rs 10 lakh, the RBI last week allowed banks to add stamp duty, registration and other documentation charges to the cost of unit in order to calculate the Loan to Value (LTV) ratio.

This comes as a relief to many who find it tough to bear the burden of down payment for home registration and other expenses. Though it may benefit some, industry insiders feel that the RBI should have kept the limit higher as even in Tier II and III cities one would find it difficult to buy a house that is priced under Rs 10 lakh.

In its statement issued last week, RBI said, “It has been brought to our notice that these amounts (registration and documentation) form around 15 per cent of thecost of the house and place a burden on the borrowers from economically weaker sections and low-income groups. With a view to encourage availability of affordable housing to such borrowers, it has been decided that in cases where thecost of the house/dwelling unit does not exceed Rs 10 lakh, banks may add stamp duty, registration and other documentation charges to the cost of the house/dwelling unit for the purpose of calculating LTV ratio,” said RBI.

How you benefit
Banks currently offer a loan of up to 85 per cent on the price of the house, provided the home buyer meets the income eligibility criteria. So, if the cost of your house is Rs 10 lakh, then the maximum loan that a bank can sanction is of Rs 8.5 lakh and the buyer’s own contribution in terms of down payment would stand at Rs 1.5 lakh. But that’s not all. A home buyer also has to pay charges relating to registration and other administrative expenses.

While the registration fee across various states varies between 5 and 8 per cent, the service tax component stands currently at 3.09 per cent (which is set to go up to 3.5 per cent), there are also legal and administrative expenses that may rangebetween Rs 25,000 and Rs 50,000.

So, other than the minimum down-payment of Rs 1.5 lakh , the buyer will also have to pay anywhere between Rs 1.2 lakh and Rs 1.6 lakh on account of registration and administrative charges from his/her own savings which raises the overall contribution to around Rs 3 lakh.

Taking into account the changes brought in by the RBI, if these additional charges of around Rs 1.5 lakh are included in the cost of the house then the total value of the home would rise to around Rs 11.5 lakh and at 85 per cent, home buyers can get a loan of up to Rs 9.78 lakh. This reduces a buyer’s own contribution from Rs 3 lakh earlier to around Rs 1.7 lakh.

Is the limit enough?
At a time when the property prices have jumped significantly and even the RBI has classified loans to individuals up to Rs 25 lakh in metropolitan cities and of Rs 15 lakh in other centres under priority sector, a cap on house purchase of up to Rs 10 lakh to avail the benefit provided seems inadequate.

“While it is a good decision to include registration cost and other documentation charges for the purpose of calculating LTV ratio, home buyers may not be able to take advantage of it as the availability of houses in that price bracket are few in the current market scenario,” said Abhay Kumar, CMD, Griha Pravesh Buildteck.

Even the houses launched under the Haryana Urban Development Authority’s (HUDA) affordable housing policy may not qualify for this benefit. While Raheja Developers has priced the housing units in its ‘Krishna Housing Scheme’ at Sohna between Rs 15 lakh and Rs 24 lakh, Supertech’s ‘Basera’ has the units priced between Rs 12 lakh and Rs 20 lakh.

Relief for allottees in government housing projects
While the RBI sought to make home buying easier for those belonging to the economically weaker sections, it also offered some relief to individuals who have been allotted houses in projects developed by government bodies.

RBI had earlier maintained that disbursal of housing loans sanctioned to individuals should be closely linked to the stages of construction of the housing project and upfront disbursal should not be made in cases of incomplete/under-construction projects. However, when some banks raised the issue that they have not been able to extend home loans to the allottees in projects developed by government bodies, since the payment schedule prescribed by such authorities are not linked to the stages of construction, RBI has relaxed the norms.
“On a review, banks are advised that in cases of projects sponsored by the government/statutory authorities, they may disburse the loans as per the payment stages prescribed by such authorities, even where payments sought from house buyers are not linked to the stages of construction, provided such authorities have no past history of non-completion of projects,” said the RBI.

House tax waived from 2008-10 in Gurgaon By: Unknown No comments

Gurgaon

The MCG has decided to waive property tax for the financial years 2008-09 and 2009-10. The relief will be provided to self-occupied residences with owners who do not have any pending dues till 2008. According to MCG, property taxes of those who have already paid for the said period will be adjusted against future payment. 

"The councillors have demanded that residents of self-occupied houses be provided relief for these two years and we have consequently decided against the tax, provided they fulfil the criteria mentioned. Owners must give us in writing that they have not leased their property. This document need not be an affidavit but can be a self-attested letter. If somebody has already paid the tax for this period, it will be adjusted," a tax department official said. 

Some councillors, however, say that the MCG should not collect property tax at all till it takes over the private builder areas and starts providing basic amenities in the restricted 900-metre IAF depot area. "The MCG should provide services and only then can it demand property tax. Residents of my area, that comes within the 900-metre zone, do not have water to drink or sewerage facility. If the MCG fails to provide these basic amenities, I will bring 2,000 residents along with me in the next meeting in protest," Ward-1 councillor Rishi Raj Rana said.

Connaught Place is the 5th most expensive office location in the world: Survey By: Unknown No comments

Canaught Place, New Delhi

Connaught Place in New Delhi has emerged as the 5th most expensive office space location in the world, according to Cushman & Wakefield's annual global survey based on office rental values at the end of 2014. 

The survey that ranks locations across Americas, Europe, Asia Pacific, Middle East & Africa, noted that Connaught Place rose in position from previous years on account of renewed demand and strengthening economic environment. 

London's West End is the world's most expensive office market for the third consecutive year, retaining its title ahead of runner-up Hong Kong, which also retaining its second position standing since last year. 

Connaught Place (CBD) has been commanding a rental value of INR 412 /sf/mth and has seen a rental value increment of less than 1% over the previous year. 

Commenting on the commercial office market Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield, said, "With renewed economic confidence in the market, the office space transactions have increased by approximately 28%. The net absorption has increased by 18% and was recorded at 32.4 million sft. We expect the market to remain at least at the same level of activity by the end of 2015." 

He added, "CBD's across cities are witnessing occupier profile change. Large occupiers consistently moving out of CBD to Secondary Business Districts or other new office locations. CBD's across India have been witnessing stable to stagnant rental values and in some examples such as Nariman Point in Mumbai has seen a decline."

Noida plans old registry rates for completed flats By: Unknown No comments

Noida

Homebuyers in Noida may not have to pay registration charges according to current circle rates

for flats completed earlier if the state government approves a plan to ease this financial burden.

The district administration has proposed a 'zero period' from the date of completion of a flat to the date of registry, which could substantially reduce the quantum of additional charges that homebuyers now need to cough up. If accepted, the proposal - made following a TOI report on February 27 on the hike in registration rates due to an increase in circle rates - will benefit around those homebuyers whose flats were completed but couldn't be registered because of the legal process to demarcate an eco-sensitive zone around the Okhla Bird Sanctuary.

The National Green Tribunal had declared a 10km green zone around the bird sanctuary in 2013 in the absence of an official demarcation, which automatically stopped registration of flats within that area. A new eco-sensitive zone was drafted by the Centre last year. Once the final notification is out, the registrations can begin.

Explaining the benefits of a 'zero period', an official said if a flat was completed in 2013, but is registered, for example, in July this year, then the cost of registration will be according to the circle rate in force at the time of the flat's completion in 2013. It'll be likewise for a flat completed in 2014. An official said nearly 30,000 flats have been ready for some time and can now be registered.

"We understand the agony of homebuyers. So, we have decided to take up the issue with the state government for consideration," said SK Singh, assistant inspector general (AIG) of the UP stamps and registration department. "We are formulating a proposal in this regard and will soon meet district magistrate NP Singh to discuss the issue with him," he said. When contacted, Singh said, "We understand the pain of homebuyers near the Okhla Bird Sanctuary. We are looking into the matter and exploring all options to give them some relief."

The UP stamps and registration department had earlier said old registry rates would not be applicable for properties ready in 2013 but not registered due to the ban on completion certificates till the eco-sensitive zone around the bird sanctuary, in whose ambit these projects came, was redrawn.

Even those properties that were ready for registry in 2013 will have to be registered in accordance with the fresh circle rates, the department had said. Homebuyers had flayed the move.

An environmentalist, Amit Kumar, had on July 8, 2013, filed a petition in NGT, demanding that construction work around the bird sanctuary be stopped. The NGT had initially halted construction work in the area but later allowed it conditionally. Uttar Pradesh has since sent its recommendation to the Centre and a draft eco-sensitive zone has been drawn up.

Gurgaon starts acquiring land for 1,349-acre green cover By: Unknown No comments

Gurgaon

HUDA has begun work on creating a green buffer as per Gurgaon Master Plan 2031, where 1,349 acres of green cover will be planted on the city's outskirts to check pollution and improve air quality.

According to HUDA sources, land acquisition for the project has been expedited following directives from the chief administrator's office. Farmers whose land will be acquired have been served Section 4 and Section 6 notices so far.

Land acquisition officer Satbir Singh said, "We're speeding up acquisition for 1,349 acres of land near the northern peripheral road (NPR). Local farmers have already been served Section 6 notices. We'll soon send them Section 9 notices, as per which they will be remunerated for the land acquired."

He explained that the Section 4 notice is sent out to inform land owners that the government is interested in acquiring their land for government projects. Section 6 notices, sent out last month, informed them the government has initiated the land acquisition process. They will later on be awarded compensation for the land acquired via Section 9 notices, thereby completing the acquisition process.

Singh said the land will be acquired from 13 villages along the NPR. "Villages that fall under the project include Kakraula, Bhangraula, Wazirpur, Dhorka, among others," said Singh. Land acquisition for residential, commercial and other purposes, as per Gurgaon Master Plan 2031, has taken place long ago. It is only the green cover, to be developed by HUDA, which is lagging behind. "We are now acquiring land for HUDA to speed up the development of a green buffer for the city," Singh added.

HUDA administrator Anita Yadav said, "Once the acquisition is complete, the 1,349 acres of green cover will be developed to include parks and forest cover."