Realty Regulator
The debate over real estate regulator is raging as the draft of the new regulation Bill has been sent to the Law Ministry for comments. The regulatory regime will bring the much-needed transparency and fair play in the sector that is rife with allegations of malpractices, writes Geetu Vaid

Touted as the sunrise sector of the Indian economy, the real estate sector is not bereft of its dark alleys where shady deals and dealers thrive at the cost of vulnerable customers. Transparency has been the foremost casualty in this unregulated sector where each customer is dogged by doubt and mistrust. A buyer stepping into the realty mart has to manoeuvre through high prices, under-hand practices, double-edged contractual clauses etc.

When a price figure like Rs 60 lakh for a one-bedroom apartment or Rs 1.5 crore for a three-bedroom one in tricity area is quoted by leading builders, one is in a fix to decide whether it is a good deal or the builder-agent nexus is pulling wool over one's eyes. The craze about having an exclusive address and elite lifestyle lures many to such deals, but there is hardly anything one can do when such a project flops, is delayed or when the final product is nowhere close to the tall claims made by the builder. A recent survey by PropEquity has shown that completion of almost 4.8 lakh residential units will be delayed by builders due to rising construction costs and increased project delivery commitment and buyers may have to pay the price for it. There is a shortage of 24-26 million houses in the country but lack of proper regulation has taken affordable housing out of the reach of a common man. Apart from this, zero accountability on contractual obligations do make developers look like villains in the whole saga, and this is an image that industry mavens would like to shed. An effective regulation regime will go a long way in restoring faith in this sector. "The main idea behind having a regulator is to protect the interest of customers and the creation of a level-playing field", says Brotin Banerjee, MD and CEO of Tata Housing.

Besides safeguarding the interests of consumers, the realty regulator will also have to ensure a proper regulation of the construction and re-construction activities, bring in quality standards, and make licensing mandatory for real estate agents.

The modified regulation Bill now excludes the subjects of land and colonisation as these are state subjects, and deals with consumer interests, fraud cheating and contractual obligations.

"Though one can't deny the incidents of fraud and under-hand tactics, established developers do have self-regulation systems as no one likes to risk one's reputation", says Sanyam Dudeja, COO, TDI, Punjab.

Citing the examples of some recent cases in the tricity areas, he adds that "consumer courts are doing a good job in the region as most cases of malpractices by builders are dealt with effectively here but the problem is much acute in places where customers have no one to turn to for redressal of their complaints. "Regulator is required for orderly and smooth development of real estate sector, which is nascent in India. Self-regulation is best but it does not work generally. We need regulator who can address the problems of developers and buyers with the intention to smooth development and entire proper delivery and servicing", says R.R.Singh, Director-General, NAREDCO.

But what the experts are really looking for is a single-window clearance approval and grievances settlement mechanism. "In case it is an additional authority, over and above numerous authorities already existing, it will be an impediment in the development process", opines Singh.

A complete ban on the 'unlicensed', unauthorised' colonisation and colonisers operating in most cities is another area that experts want to be addressed in order to ensure fair play. "The developers should be made to register with the regulatory authority and substantiate all claims regarding land title and other clearances before advertising a project so that a buyer can make an informed choice and there are no ugly surprises waiting for him at a later stage", says Dudeja.

But in all this din about regulation one should not overlook the need for reforms in the sector as Sunil Dahiya, MD, Vigneshwara Developersn, says, "The sector first needs a system of reforms to ensure growth". Most sectors in India have seen growth by following the road of reforms first before going in for regulation. For example 'de-regulation' in the automotive industry followed by reforms, gave us better and cheaper vehicles and resulted in the mature Indian market of today. A similar pattern has been witnessed in Indian markets where customers are getting better products be it in banking, insurance or telecom sectors following the same strategy of de-regulation and then reforms. "Therefore, we don't have to invent the wheel all over again and should first speed up the reforms and then simultaneously bring in regulation", adds Dahiya.

However, as far as the pricing is concerned, the regulation is not going to have much impact there as market forces and local factors affect prices of a project and it is very difficult to put a cap on this, says Ashwani Prakash, Executive Director, Paramount Group of Companies.

Already in the making for three years now, the Bill and the resultant regulations are likely to iron out some of the rough edges for the customers as well as the industry bigwigs and pave the road for growth of the sector. 

When a price tag of Rs 60 lakh for a one-bedroom apartment or Rs 1.5 crore for a three-bedroom one in tricity area is quoted by leading builders, one is in a fix to decide whether it is a good deal or the builder-agent nexus is pulling wool over one's eyes. The craze about having an exclusive address and elite lifestyle lures many to such deals, but there is hardly anything one can do when such a project flops, is delayed or when the final product is nowhere close to the tall claims made by 
the builder.

Rate hike may not impact housing sales

New Delhi: Housing sales in top tier-II cities are unlikely to be largely impacted by interest rate hikes due to increased demand and buyers' less reliance on bank credits for owning dwelling units, Crisil Research said has said.

"Buyers in tier-II cities depend less on bank credits.

Compared to 80-90 per cent in the metros, use of bank finance for buying a dwelling unit in these cities would be around 30 per cent. Hence, the impact of rate hike will be less," Prasad Koparkar, Head, Customised Research, Crisil Research, said.

The RBI has hiked key policy rates 10 times since March 2010 pushing mortgage rates upwards. The rate hike has impacted housing sales across the metros.

Koparkar said the demand for housing units in 10 Tier-II cities - Bhopal, Bhubneswar, Vadodara, Indore, Jaipur, Surat Lucknow, Nagpur, Coimbatore and Vizag - was on the rise as a result of an overall commercial and economic development. "Demand for housing units in these states are industry and commercial driven. People who are coming to these cities are opting for apartments rather than standalone buildings. Also, financial penetration is providing impetus," he said. Koparkar expects residential housing unit sales worth Rs 18,000 crore in these top 10 tier-II cities in the current fiscal, up from 17,500 crore in 2010-11. — PTI

A CHANDELIER FOR YOUR HOUSE
Jagvir Goyal

You have been shopping throughout your life-either for self or for your house or for a dear one. Nothing in the market attracts you now. You are always on the lookout for something exclusive. You don't come across any such thing. If ever you find it, its cost is prohibitive.

Then the idea of adding a chandelier to your house flashes across your mind and infuses a new energy in you. And you set yourself out to buy a chandelier. It's surely a good idea. But before buying and getting fixed one, you must dwell upon a few points:

Location

Before buying a chandelier, you must decide where you'll hang it in your house. The ideal location, of course, is the lobby. Chandeliers are decorative items, meant to add grandeur to your house. So the best location for it will be a place where it is visible to the visitors. The lobby of the house is one such place. However, people love to hang chandeliers above the dining table and in the bed room also.

The height

Most of the houses these days have the lobby with the roof at double height. In such cases, the chandelier hung at roof level will leave no impact on the sitting area in the lobby. Therefore, in such cases, stepped chandelier of a large depth should be chosen. Chandeliers have the depth varying from 8 inches to 7 feet. For lobbies with roof at 10 feet at so, the depth of the chandelier has to be up to 2 feet otherwise it will look too close. Often, the staircase is located in the lobby these days. In such houses, sometimes, a location above the staircase is so available that the chandelier has its effect on ground floor as well as first floor.

The chandeliers can be multi stepped or single stepped. Choose multi step chandelier for double ceiling height and single or double step chandelier for normal ceiling height.

Size

Size of the chandelier should be chosen carefully by keeping the size of the lobby or the room in view. Bigger is the size of lobby, bigger can be diameter of chandelier. A too big chandelier in a small lobby looks odd and ostentatious. For a lobby of 16 feet by 20 feet, a 2 feet diameter chandelier is ideal.

Choice

A chandelier must look sparkling and have an appealing effect on the people. It should make the visitor look twice at it. It should well illuminate the area. It should have the ability to add jubilation to the mood, the moment it is switched on. These factors should be visualized and tried at chandelier shop before finalizing the deal.

Customised chandeliers

In case you don't find a chandelier in the market exactly matching your imagination or requirement, customised chandeliers are now provided by the chandelier producers. Explain your idea to the dealer and he can get it prepared for you. However, the variety available is great and such a situation should hardly arise.

Weight

Weight of chandeliers varies from a few kilos to few tons. Look for a light weight chandelier. In the ancient times, the chandeliers used to be very heavy. A fan hook was not able to take their weight. Heavy chandeliers shouldn't be hung on fan hooks. Being much heavier than fans, chandeliers require stronger and well anchored hooks. Provision of such a hook will need foreseeing its provision at the time of laying the slab concrete. Many light weight chandeliers are now available and should be preferred if no such hook provision in the roof slab has been made.

Glass

Transparent material is an essential component of chandeliers. It is provided in the shape of prisms to play the fancy role of reflecting light in multiple ways and creating a mesmerising effect. It could be crystal or radium glass or ordinary glass or acrylic. Crystal and radium glass are costly items. Choice of glass depends on your budget for the chandelier.

Maintenance

The chandelier should be such one that is easier to maintain. Often, the chandeliers accumulate dust and cow webs and cleaning them is a Herculean task. Their cleaning and polishing requires great care, time and patience. It is done either by dry method or wet method. Dry method is preferable. Calling professionals for the cleaning job should be preferred. Otherwise, such chandeliers are now available in the market that demand least cleaning. Further check that chandelier components are easily available if ever a glass or crystal piece comes off or a lamp in it fails.

Energy-efficient

Look for a chandelier that is energy effective. Often, the chandeliers are supposed to consume about 700 watts of power per hour due to the presence of a number of bulbs in them. These days, chandeliers with LED lights are available in the market. Choose one with LED lamps. It will have a power consumption of not more than 1 unit of electricity even if kept on throughout the evening and night.

Cost-effective

There was a time when the cost of chandeliers was mind boggling. Advent of chandeliers with crystal look and LED lights has cut their cost significantly. These days, a strikingly beautiful looking chandelier can be owned for just Rs 12,000 or so. There are chandeliers available in the market, costing Rs 7 lakh and more. Swarovski crystal chandeliers are really costly as these have crystals imported from Turkey, Egypt, Austria, Europe etc.

Illumination

Yellow light of the chandeliers looks royal and stylish. It reminds one of the old kingly times. These days, chandeliers with multi-colored light effects are available. Blue light looks soothing. Light pink and white light have a cooling effect. Though the traditional yellow light looks best yet one can make one's choice as per room décor and personal taste.

Remote control

Some of the chandeliers available in the market are remote controlled. The remote can be used to switch them to on or off position besides changing light colours to create different color combinations. Even a part of the chandelier can be switched on. Choose a remote-controlled chandelier. The remote control ensures real convenience in making best use of the chandelier.

Get it fixed

Whenever you buy a chandelier, ask the dealer to send his men for the assembly of various parts of the chandelier and then its erection in position within the cost of the chandelier. Most of the chandeliers are now supplied in parts that are to be assembled at site before the final object d'art is ready for erection.

Go ahead. Happy buying & enjoying!

(This column appears fortnightly)

Tax Tips
Don't ignore acquisition cost
S. C. Vasudeva

Q. A piece of land was purchased by our society in April 1980 for Rs 65,000 and registry charges of 6,500 was paid (Total Rs 71,500). This was purchased on cooperative basis by 42 members. So, 42 plots (residential) of 250 sq yards were distributed among us, and the remaining portion was left out for streets. Thus, it had cost every member Rs 1,703. Now, I want to sell 100 sq yards portion of my plot for Rs 1,50,000 (@ collector). Kindly advise me. n Can I ignore this acquisition cost, which is just Rs 681 at average rate of acquisition and pay LTCG for the whole value of sale. n Or should I consider the indexed value, taking it as value on 1-04-81 (instead of 01-04-1980), the date from which the Index Value is applicable. (iii) Can it be clubbed with my other income to avail rebate of tax-free slab? — P.N. Gupta

A. Your queries are replied hereunder:

n The tax department would have no objection in case you opt to ignore the proportionate cost of the plot of 100 sq yds. However, once you ignore such cost you may not be able to claim it as part of the cost of remaining 150 sq yds. In my opinion, therefore, you should not ignore such cost.

n You have option to take fair market value as on 1.4.1981. It would be advisable to obtain a valuer's report for the purpose.

n Long-term capital gain is chargeable to tax separately. However, in case it does not exceed the maximum amount on which tax is not chargeable, you would be entitled to claim the benefit of such limit.

The writer can be contacted at sc@scvasudeva.com

REALTY BYTES
SARE launches 'Springview Floors'

After successfully launching eight projects across the country, South Asian Real Estate (SARE) has announced the launch of third phase of its 76-acre integrated township in Ghaziabad called "Springview Floors".

Strategically located in Ghaziabad, NH-24, "Springview Floors" will offer independent floors in Crescent - ParC township, at prices starting from Rs 16.9 lakh onwards. "Springview floors" has 354 units which include 2, 3 and 4 BHK independent floors in the Ground +2 format.

"In Ghaziabad, the total buildable area on completion will be 4.5 million sq. ft. and currently we have already sold 241 houses. The scale of our business will enable us to deliver the best service to our customers and commit the resources to ensure on time delivery of our projects. We will continue to focus on the middle income segment and deliver a quality product offering to our customers." said David Walker, Executive Director, Operations. Vineet Relia, Chief Operating Officer, SARE,said, “In keeping with our philosophy of giving paramount importance to the lifestyle of local residents, we are proud to launch independent floors in Ghaziabad. We are confident that the market will respond positively to our latest product offering."