area watch: ambala
Under the weather
The clouds of gloom looming over the realty sector in the region have cast a dark shadow over this key town of Haryana. With developers staying away from the scene and buyers preferring to cool their heels, the property mart in Ambala is...
Manish Sirhindi

Despite its proximity to the state capital and a strategic location on NH1, the real estate sector in the scientific city of Ambala has failed to attract any major developer over the past few months. Most of the developers have been shying away from launching projects in Ambala due to a slowdown here.

Even as the areas close to the district, including Dera Bassi and Zirakpur in Punjab, are witnessing large scale constructions of flats and villas, major developments in the reality sector continued to elude the district.

According Omkar Nathi, president of the real estate dealers of Ambala Cantonment, some of the local developers had come up with a few colonies on the outskirts of the twin cities, but these projects had not got good response from the buyers. “Thanks to the high prices that the developers had to pay for getting their projects approved by the government, many small-time developers chose to come up with unapproved colonies here”, he added.

As of today there is only one colony which has recently been approved by the state government. This is the one being developed by Harman Developers on the Ambala-Jagadhari road. But the pace of development here, too, is slow.

Satish Sharma, another local property dealer, said an overall recession in real estate markets across the region had gripped the property market in Ambala also. “Till last year Ambala was being touted as a major real estate destination in northern region, but as of today the situation is different,” he said.

Deterrents

One of the main reasons behind this slump is the imposition of a complete ban on land deals through power of attorney. The registration of plots in unapproved colonies has also hit the real estate business in a big way, Nathi said.

The virtual absence of buyers in the market has also added to the slowdown here. “It is mainly because of the sky rocketing prices that there are no buyers in the market now,” said Pradeep Rattanheri, a local property dealer. “Buying a commercial property anywhere in Sadar Bazaar, where the land is owned by the government can cost a buyer anywhere between Rs 2 and 3 lakh per sq yd,” he said.

Rattanheri said an average employee was finding it hard to buy a plot in the approved colonies where the price ranges between Rs 20,000 and Rs 50,000 per sq yd. While, buying a plot in unapproved colonies, which had mushroomed all-around the twin cities, was out of question for them due to the legalities involved.

Dreams interrupted

As of today, there is no major upcoming residential or commercial project in the city. The absence of noticeable industries in the district (other than a few in the Saha industrial sector) has also hit the property business. The district has a limited industrial base consisting of small-scale scientific and surgical instruments manufacturing industry, some food industry, metal casting, kitchen mixer grinder manufacturing and submersible motor pump manufacturing units. But, these do not attract many employment seekers who would settle here and eventually buy property. The city has been reduced to a mere transit city used by commuters who travel between Chandigarh and Delhi or Amritsar and Delhi.

Though, till last year companies such as Unitech, Reliance Industries and DLF were believed to have acquired land for their SEZs on Ambala-Naraingarh road, these projects have not seen the light of the day so far.

The Vatika Group, which was coming up with its group housing scheme that was to be followed by commercial properties, also hit a legal roadblock. The group had planned a major residential settlement on one of the largest land banks of over 170 acres in the city. It was also supposed to have around 500-700 two and three BHK apartments apart from a multiplex.

Price meter

Plots in the sectors developed by the Haryana Urban Development Authority (HUDA) are fetching a price of Rs 12,000 to Rs 25,000 per sq yd. The houses are six marla, 10 marlas and one kanal. In Ambala Cantt, private colonies such as Agrasen Nagar, Dayal Bagh and Rani Bagh have prices in the range of Rs 18,000 per sq yd. The plots range from four marlas (100 square yards) to one kanal (600 square yard).

Near Gasitpur village in Ambala Cantt, HUDA has set up three sectors - 32, 33 and 34. HUDA had plans to add three more sectors as part of its expansion, which might heat up the scene for the property business here. Here the HUDA had come up with flats, most of which are now lying vacant and these have not found favour with the local residents.

Commercial zone

The commercial activities have so far taken place largely in Sadar Bazar in Ambala Cantt, Mahesh Nagar on Jagadhri road, Cloth market Jagadhri Gate and Model Town markets in Ambala City. While, a shopping mall by the name of Galaxy Mall has also come up in the city area.

In Ambala, a record of entire accessible properties which are up for purchase, sale or rental amenities are all given by the property dealers of the city. As the values of the properties in Ambala are hiked exponentially, the purchase of property and land is limited only to investors.

Steer clear of post-construction woes

Constructing a house is a long and tedious process that saps the energy and patience of a house builder completely. It may roughly take between 18 and 24 months to complete the construction work and mostly by the end of it the house builder is eager to see the workers leave the premises finally. At the same time, he wants to avoid any sort of trouble after the completion of construction as arranging a plumber, electrician, carpenter or mason is an uphill task these days. So his earnest wish is to foresee every small or big trouble that may arise afterwards and get it eliminated when the workers of all trades are still at hand. This week we will try to figure out some such troubles.

• Warping of doors: During the first rainy season after the construction of house, the door shutters often warp due to ingress of moisture and don't close properly. The house owner should, therefore, doubly ensure that the wood used in the door shutters has been fully seasoned, either naturally or in a seasoning plant.
• Roof leakage: Damp patches on the ceiling or a leakage in roof slab during rainy season is a common problem. It is found to have a psychological and depressing effect on the house owners. To avoid it, the house owner must ensure that the rain water pipes are not blocked, the flush pointing done on tile terracing is intact and a concrete gola has been made all along the joint of the slab and the parapets.
• Discoloration of CP fittings: CP fittings provided in the toilets are very costly these days. Good quality and brand notwithstanding, the CP coating loses its sheen very soon leaving behind ugly looking, green mouthed faucets and other fittings. This happens due to the presence of salts in the water which react with the CP coating and cause its erosion. The best way to avoid discoloration of CP fittings is to wipe all CP fittings with a moist cloth, every morning. A sure way to avoid is to add a water softener to the overhead tank so that the water passing through CP fittings is soft as well as free of harmful salts.
• Corrosion of GI pies: Like the damage to CP fittings, harmful salts like carbonates in the water cause corrosion of GI pipes also. The use of a reputed and effective water softener is again the solution. In addition, the salts in the brick masonry also have an adverse effect on GI pipes. With the passage of time, these salts eat up the zinc coating on pipes. The GI Pipes should, therefore, be coated with black Japan paint or wrapped in cello tape before embedding them in masonry or concrete.
• Breakage of mirrors: Use of mirrors in bathrooms, walk-in-cupboards and other portions of the houses has increased these days as mirrors add dramatically to the dimensions and looks of a house. But mirrors are delicate and are highly prone to damage. The house builders should, therefore, ensure two things while going in for a "mirrored" look. One, to use mirrors of proper thickness. More is the size of the mirror, more should be its thickness which varies from 2 to 8 mm. Two, the choice should be of 'safe mirrors'. Safe mirrors are provided with a backing and don't break into fragments causing injury to the house owner. The backing material holds back the cracked pieces.
• Settlement of floors: After a gap of a year or so, the floors in many houses seem to be settling, causing cracks along the bottom of wall skirting. This happens due to non-compaction of earth filling below the floors. On low-lying plots, one should choose provision of a basement as a filling of 4 ft or more tends to settle with time. Otherwise, the earth filling should be done in layers, and each layer should be well compacted. It is difficult to make earth filling contractor agree for this as they just unload the tippers directly in the house area. The rate for earth filling work should be settled by offering extra money to him for filling the earth in layers and then compacting each layer.
• Vertical conduits for split ACs: Vertical PVC conduits of 50 mm diameter are embedded in the walls these days to contain the copper piping connecting indoor and outdoor units of split ACs. Often, the top ends of these conduits emerging at the roof or the walls are left open, allowing the entry of moisture, insects, lizards etc inside them, leading to multiple problems for the house owner. These pipe ends should be closed by providing 'end caps' over them and further sealing them with cello tape. The end caps are often available with the conduit suppliers.
• No water supply pipes in floors: Care should be taken that no water supply pipe is allowed to be embedded in floors of the house. These should only run in the walls. A leakage in water supply pipes embedded in floors may lead to having the floor dismantled and laying a new pipe.
• Duct treatment: A duct is often planned in a house to provide light and ventilation to a toilet having no external wall. Care should be taken to make the duct dustproof, leak proof and safe against burglary. For safety, grid bars should be provided at the duct opening level. For dust proofing, the duct opening level should be raised above the terrace level and for leak proofing some transparent fibre sheet should be provided at opening level by allowing air passage along a side.
• Damage to toilet doors: The bottom portion of toilet doors often gets discolored or damaged due to constant spray of water on them. To overcome this problem, the house owner should either opt for PVC doors or get a thin PVC sheet affixed to the bottom 2.5 feet depth of the doors. These days, attractive PVC sheets having wood finish are available in the market at a cheap price. These can well serve the purpose.
• Maintenance of glass cubicle: Many house owners prefer to create a bathing cubicle in glass in the toilets. Day after day, the salts contained in the water keep depositing on the glass and soon, the bottom portion of the glass cubicle gets discolored and looks very ugly. This can be avoided only with regular daily cleaning as once the glass gets discoloured it is near impossible to get it cleaned. So such glass cubicles should be created only if proper mechanism or manpower is available to wipe and clean them on a daily basis.
• Kitchen ventilation: Many models of kitchen chimneys are available in the market but often, the house owners complain of their being too noisy and ineffective in driving out the smoke. To have a relief from the noise and smoke, keep provision for an exhaust fan in the kitchen even if a chimney has been provided.

Leakage in split ACs drain pipe: In most of the new constructions nowadays preference is given to the provision for split ACs in rooms instead of window ACs. The main reason for this is that the window ACs spoil the beauty that the windows add to a room. Natural light is also a casualty with window ACs. All split ACs need to be provided with drain pipes which are concealed in the walls and lead to a suitable drainage point. Often, the joint of drain pipe with the indoor unit is not made water tight, leading to dampness in the walls and damage to the wall paint. Moreover, the location of leakage can be detected only after cutting the wall plaster. All this is nothing less than a nightmare for the house owner who has built his house so fondly. Extra care should, therefore, be taken in making the drain pipes and their connections with indoor unit and outlet point water tight.

(This column is published fortnightly)

Basement basics

Gone are the days when the basement was considered to be housing scary secrets and evil monsters. These sub surface areas are turning into a goldmine for most people. Not only do these provide an additional floor area, but also a more thermally comfortable interior environment. Besides being used for storage or office space, there are numerous ways in which the basements can be utilised — from being an extra bedroom to play areas for children to a home theatre or a games room. The possibilities are endless! However, one must bear in mind that various cities and towns have different bylaws regarding the utilisation of basements, so one must be aware of these before initiating any changes in this space.

Before carrying out any kind of conversion or renovation of basements, certain key factors need to be considered. These include::

• Waterproofing: Being an underground room adequate waterproofing solutions must be installed in the walls and floor in order to prevent seepage of water inside the building. In case of construction of a new basement, be sure to have a membrane on the external side of basement wall which drains the moisture into a sump.
• Ventilation: Due to being underground, some basement areas require mechanical means of ventilation in order to maintain a healthy air quality within the spaces. Use of exhaust fans, ceiling and wall-mounted fans and air conditioners help to achieve the required air change rate in these spaces.
• Lighting: The main reason why most people are not keen on properly utilising their basements is due to the fact that these are usually dark and dingy. Lighting, day-lighting and artificial lighting should be given a lot of thought in these spaces. Skylights, clerestory lighting, light tubes, use of glass blocks in the roof, are just a few ways in which daylight can be introduced in these areas.

• Home Gym: Make your own gym at home rather than going out to exercise. Use the funds that you would spend on a gym membership to purchase some equipment and exercise in the comfort of your own home.
• Children’s play and study area: Couples with young children know what a challenge it is to keep them occupied and out of the way especially when there are guests around. Making a play area for them in the basement ensures that they are not in your way and gives them complete licence to make as much noise as they want without disturbing the other members of the household. Basement spaces also make for great study areas as they insulate sound and are free from any kind of distractions.
• Home office: Most people who work from home find it difficult to maintain the routine and work schedule of a regular office as they get embroiled in matters of the home or have to face unwanted disturbances. A basement office ensures a private area within the home where one can work in a secluded environment.
• Home theatre: Make the most of the inherent soundproofing qualities of your basement by installing a projector or a large LCD screen and a surround sound system. Add a few loungers and sofas and kick back and enjoy your favourite movies or tournaments in the comfort of your own home. For hardcore gaming buffs, this is the best place to have your X-box so that you can make the most of your gaming experience. This application also helps one make the most of the lack of natural daylight in the basement.
• Recreation room: An ideal place to create the perfect recreational domain. Placing a pool table or a cards table or any other game apparatus will provide a great area for spending time with one’s friends. Adding a little mini bar or a small pantry slab to the space makes it easy to keep the gathering supplied with drinks and snacks without having to constantly run to your kitchen.

Design tips

• Use wood and stone to give an inviting feel to your basement. It is not necessary to use slabs of stone or planks of wood. Instead, veneers, laminates and tiles can be used to provide the same ambience.
• In case of a small basement, add large mirrors to give the illusion of a bigger space.
• Scale your furniture according to the size of your basement.
• Use concealed and cove lighting to give the feel of natural daylight.
• Add a fireplace to give a cosy feeling to your basement.
• A basement can be a multi-purpose and flexible space and can serve various purposes depending on the requirement.

Party space

The basement is an ideal venue for a party as there is complete privacy and the neighbours are not disturbed even if you have loud music playing. This gives the licence to continue the party till as late as one wants. This space is also flexible as seating may be added or removed depending on the requirements of the gathering. A bar can also be installed which adds to the atmosphere of the party.

Tax tips
No exemption on buying plot
S. C. Vasudeva ...

Q. I own three residential houses located in different places and all of these are rented out. Out of these three I have sold one which I had purchased about 20 years back. With the sale proceeds of this house I purchased a residential plot in Gurgaon where I propose to construct a residential house for my own use. My queries are as under:

• Am I entitled to exemption from LTCG for the amount invested in my newly acquired residential plot and construction thereon?
• I have sold the plot in April, 2012 and spent about 70 per cent of the gain in acquiring the new plot. The balance amount of 30 per cent would be utilised for constructing the house.
• Whether the money can be kept by me in my savings account as normal amount or it has to be deposited in a separate capital gains account till the period construction is completed?
• Should I withdraw the amount from the savings account to show that the same has been taken out for constructing the house within six months; or
• Should the balance amount to be invested in tax-saving bonds? — raj kumar

A. The answers to your queries are as under:

• capital gain will be treated as long-term capital gain. The acquisition of plot would not entitle you an exemption but in case the construction of the residential house is completed within a period of three years from the date of transfer of the capital asset, you would be entitled to claim the exemption from the taxability of the capital gain earned on the sale of one of the houses.
• The balance 30 per cent should be deposited in a bank under Capital Gains Scheme Account. Such deposit has to be made before due date of filing the Return. In your case the Return would be due on July 31, 2013 and, therefore, in case such amount is not spent towards the construction of the house before the said date, steps should be taken to deposit the unspent amount under capital gain scheme account. The amount required to be utilised for construction of the house will have to be withdrawn from such an account as and when required.
• The amount, if kept in the savings account, would not entitle you to claim the exemption under Section 54 of the Income Tax Act 1961 (The Act).
• As indicated above, the balance 30 per cent should be deposited in a bank under the Capital Gain Scheme Account. You can buy the tax-saving 
  bonds if you want within six months of the date of sale of the residential house. There would be no necessity to deposit the balance amount in bank under the capital gains scheme account.

Can I adjust loss against salary income?

Q. My father and I are the joint owners of a flat in Zirakpur. Currently this flat is occupied by my parents. I am stationed at Bangalore and have bought a flat there for my residence. I have taken a loan for buying the Bangalore flat. The total amount of interest paid/ payable in respect of Bangalore flat is Rs 3, 00,000 (approx.). Am I entitled to claim the above amount of interest against self-occupied property at Bangalore? If so, can the loss arising on account of such interest adjustable against my salary income. — rajinder

A. The deduction allowable in respect of Bangalore property would be limited to Rs 1,50,000 in accordance with the provisions of the Income-tax Act 1961 (The Act). Income from Zirakpur property would be assessable on notional basis. You would be entitled to adjust the loss from income from property at Bangalore, which would be treated as self-occupied. You would be entitled to adjust such loss against your other income. In case the same cannot be wholly or partly set off against income from any other head of income, the whole loss or loss not so set off shall be carried forward for eight years for adjustment against the income from house property.

Forfeiting earnest money

Q. I had entered into an agreement to sell my residential house which is a long-term capital asset. According to the terms mentioned in the “Agreement to Sell”, I had received a sum of Rs 5 lakh as earnest money. The sale deed was to be executed by the end of June 2012. However, the purchaser has been trying to avoid the payment of final consideration. According to the terms in the agreement, I have a right to forfeit the amount, which I intend doing. I have already given a notice for this purpose. Please, let me know how this forfeited amount will be accounted for. — rajesh

A. In computing the cost of acquisition, where any capital asset was, on any previous occasion, subject to the negotiation for its transfer, any advance or other money received and forfeited by the assessee in respect of such negotiation, is required to be deducted from the cost for which the asset were acquired or its fair market value as the case may be. Accordingly, the amount of Rs 5 lakh, which you intend forfeiting, will be deducted from the cost of the residential house as and when the amount of capital gain is to be computed on its subsequent sale.

Tax on refunded amount

Q. My father had sold a plot in December 2006 as he was interested in constructing/buying a residential house. He had deposited the sale proceeds of the plot, which was a long-term capital asset, in a bank under the capital gains scheme. Unfortunately, my father died recently before the completed flat was handed over to us. My name has been substituted by the builder. The bank has agreed to refund the amount to me as I am a nominee in the bank records. Will the amount refunded to me be taxable in my hands? — sanjeev

A. Ordinarily, if the amount so deposited is not utilised within the stipulated period then the amount not utilised is treated as a long-term capital gain of the previous year in which the period of three years from the date of transfer of the original asset expires. However, if the assessee dies before the expiry of stipulated period and later on the unutilised amount is refunded to the legal heirs, the amount so refunded is not taxable in the hands of the legal heirs as the unutilised portion of a deposit does not partake the character of income in their hands but is only a part of the estate devolving upon them (Circular No. 743 dated May 6, 1996). Therefore, you are not liable to pay tax on the amount so refunded to you.

Deal with builder

Q. I purchased an 800 sq yd plot in a residential area in 1990 for about Rs 10 lakh. One of my friends who is a builder wants to take this plot and build two houses having covered area of about 3,500 sq ft each for both of us. Each house will measure 400 sq yd. As per the agreement he will give me the house free of cost within two years along with Rs 20 lakh in cash before I hand over the plot to him. Please clarify the following issues: n How to calculate and what will be my tax liability? n How to register my house on my name once I transfer my plot to him? n Can I buy another flat for Rs 40 lakh by putting Rs 20 lakh from my pocket plus Rs 20 lakh received in cash from my friend to save LTCG on Rs 20 lakh? I have no house at present. — manoj

A. The replies to your queries are as under:

• The portion of land on which your friend will build a house of 3,500 sq. ft. for himself would be considered a transfer of land to that extent. The consideration for such transfer would be the amount of cash of Rs 20 lakh given to you and the construction cost of house having an area of 3,500 sq. ft. The indexed cost of that portion of land which has been transferred by you to your friend would be deducted from the aggregate of such cost and Rs 20 lakh. It is not possible to compute the tax liability as all the relevant particulars for computing such tax liability are not given in the query. Further, the cost inflation index for the financial year 2012-13 has not been notified so far and, therefore, the indexed cost of the plot which you intend transferring to your friend cannot be computed.
• The transfer would be in respect of that portion of land on which the portion of the house constructed by your friend for his own requirements would be constructed. There should not be any necessity for you to register your house. However, your friend to whom one half of land is intended to be transferred will need it.
• The acquisition of two residential houses on the sale of a long-term capital asset other than a residential house, may not entitle you to claim the exemption from the capital gains tax in view of the provisions of Section 54F of the Income-tax Act 1961 (the Act). It is provided in the Section that exemption would not be allowed if the assessee purchases any other residential house, other than the newly acquired one, within a period of one year after the date of transfer of a capital asset which in your case would be the portion of land which you intend to transfer to your friend.

real talk
Buyers suffer the most due to forward trading by developers

s.k. syal Director and CEO, Alpha G:Corp.

The cases of home buyers not getting the possessions in time in spite of paying the cost of residential units are not rare in the Indian realty sector. While in most cases the builders cite the long-drawn clearance process and paucity of funds as the main cause for delay, it is actually the siphoning of funds from one project to another project that is the cause. Forward trading is a common practice that has been the cause of concern for buyers. This illegal practice amounts to cheating the customers and off late a lot of noise has been raised about it in the realty circuits. S.K. Syal, Director and CEO, Alpha G:Corp., whose company has pioneered the concept of real estate asset management (REAM) that ensures that a developer honours commitments in letter and spirit leaving no room for failure on the ethical front, discusses the issue in an interaction. Excerpts:

Recently some real estate companies have come under the scanner for misuse of funds, this is a very common practice among builders as they transfer funds meant for one project to another one. What are the dangers of such a practice, especially for the customers?

There is no doubt that customers have the most to lose in a situation where construction is stalled due to the unavailability of funds. Forward trading is a very common practice in the industry and is the primary cause of delay in projects' delivery. While the cases of construction halting altogether are rare, investors and end-users who have planned substantial investments, may have to incur huge losses. The associated emotional distress would be difficult to calculate. The real dangers in such a situation, however, are the long-term impact on how the industry is perceived. In the absence of external regulation, many investors are weary of investing in the sector. Such practices further discourage investments, dampening the sentiments and ultimately hurting the industry.

Are any punitive measures in force right now to stop such practices?

Although punitive measures such as cancellation of licence do exist in certain states, these are poorly enforced. Unfortunately, a legal recourse is the only option available to the customers. Some companies that have self-imposed internal regulations such as use of escrow accounts that introduce systemic checks to prevent misallocation of funds are also subject to strict internal and external audits. However, only a handful of companies follow this model.

How can such practices be controlled or curbed. What measures should be taken in this regard?

In the absence of any external framework of regulation and the sector being largely unorganised, controlling such practices is largely a matter of self-regulation on the part of the developer. The use of escrow accounts is crucial in curbing the flow of capital to other projects by the developers. Escrow accounts that are set up for a particular project prohibit the use of capital for any other purpose except the designated project, thereby protecting the end-user from delayed construction and consequent financial loss. Developers with transparent financial practices and a strong code of ethics tend to perform better in demanding times and these differences are evident in their delivery records.

What is the REAM model?

Many developers tend to execute projects in partnership with companies on one business model or the other. Such practices leave a lot of room for straining of ties between associated companies. Real Estate Asset Management is a business model under which the company takes the professional responsibility of undertaking all tasks from conceptualising the project, its marketing, development to post-sale facility management. This model of operation delineates responsibilities in a manner that skills of the developer are put to optimum use as it steers the project towards timely and quality delivery. Minimum interference from the landowner ensures that there is no confusion in roles and responsibilities and there is an optimum utilisation of the skill sets ensuring that project management happens in a professional fashion.

A lot of malpractices plague the Indian realty sector do you think that in such a scenario self-regulation is an effective strategy?

The importance of self-regulation on the part of the developers cannot be overemphasised. While it is crucial in curbing such malpractices some degree of external checks and balances also should be introduced to restore investor confidence in the sector. Professional developers with good track record have introduced such checks of their own accord in the interest of correcting the perception the unfavourable image of the industry. Such developers need to be recognised and be given incentives in the interest of the future of this very important sector. The growing reluctance of banks and financial institutions to lend capital to all developers is unfair. Instead, the government should look at devising a system of rating based on which “clean” developers should be given easier access to capital from external institutions.

Are there any measures that a buyer can take to ensure that he’s not cheated?

In the current environment buyers need to be extra careful to safeguard themselves against any potential financial loss and consequent distress. The pedigree of the developer and the delivery record of past projects needs to carefully evaluated before investing. These are very important indicators. The financial health of the project can be appraised by the use of escrow accounts which prevent misallocation of customers' money into other projects by the developer.

How effective do you think the real estate regulatory Act will be if it is cleared?

Introducing regulations by the government will definitely make the sector more transparent and the developers more accountable to buyers. Certain measures such as a mandatory registration of property and filing of project details as a pre-condition to advertise will introduce the much-needed checks in the system. However, the draft in its current form is lopsided and biased against the developers and unfairly attributes project delays to a developer. A deeper insight would reveal that such delays can be caused from any number of reasons over which a developer has very limited control. Moreover, the government has continued to ignore the developers' demand to introduce measures such as single-window clearance for all necessary approvals which is a significant cause for delays in project delivery.

— As told to Geetu Vaid

loan zone
Terms of rejection
s. C dhall

Q. Can one’s home loan application be rejected by banks? Why? — narinder sethi

A. In the current scenario the general tendency among youngsters is to keep changing jobs and this implies instability and that could become a reason for the rejection of home loan application by banks. Banks place a high value on job stability and often insist that an applicant should be employed with a particular company for a certain minimum period to be eligible for a home loan. This period usually varies from one to three years. If you live in the same house as someone who is a loan defaulter, it's probable that your residential address is on a watchlist, which could lead to your loan application being rejected. If some income or debt profiles or geographical areas are listed in their policy guidelines as not appropriate for lending, the bank will not be able to fund your loan. If your loan application has been rejected earlier it could pose a problem as it affects your loan worthiness.

The cost factor

Q. How much money will I have to come up with to buy a home? — Keshav pandhi

A.Well, this depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs:

• Earnest money: The deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house;
• The down payment: A percentage of the cost of the home that you must pay when you go to settlement; and
• Closing costs: The costs associated with processing the paperwork to buy a house.

living with vaastu
Choose your parking carefully
khusdeep bansal

Are you perturbed by frequent breakdowns of your car or accidents involving your vehicle? You will be surprised to know that parking your car in the wrong direction can be the reason behind all this. The direction of car parking area or porch in your home is significant. A home can be divided into 16 zones and which of these zones one selectes for making a car/vehicle parking will affect the safety and maintenance cost of the vehicles.

• Frequent accidents in spite of driving cautiously and safely may be due to parking your car in the south-east direction. South-east is the zone of fire as per Vaastu. In a balanced state, fire plays the role of a protector, but, if imbalanced, it causes accidents.
• If your car is of blue, silver blue or black colour, then you must avoid parking it in the south-east of your house. However, if you have no choice, then you must paint the walls in green shade or put some green plants there.
• If the parking area is in east or south-east — the zones of churning and anxiety — of your home, it will cause unwanted and unexpected issues with your vehucles. These may involve clashes with neighbours over parking issues.
• Similarly, with car parking in the zone of depression and low moods, i.e., west or north-west, there will be unusual breakdowns and high maintenance cost.
• Another important outcome of parking in the wrong direction is car theft. Almost every day we hear of theft cases. Theft is most likely to happen if the car parking area is in the south, south-west direction as this is the zone of expenditure and wastage.

realty bites
Indians dominate property purchases in Dubai

Foreign investor purchases in freehold projects in Dubai are still dominated by Indians who have retained the number one spot since foreign ownership regulations were applied, a new research has revealed. According to the Real Estate Investment Promotion and Management Centre at the Dubai Land Department (LD), Indian investors have bought a total of 2,153 properties valued at Rs 5,670 crore (3.751 billion dirhams). Pakistanis are at the second spot for having bought a total of 1,814 properties at Rs 4,400 crore (1.713 billion dirhams).

The research revealed that the total value of direct foreign investments in the real estate sector exceeded Rs 33,300 crore (22 billion dirhams). The funds were pumped by foreign investors of various nationalities to buy 12,875 properties during the first half of 2012.

DLF's 2,700 cr deal with Lodha

In the biggest realty deal in the country this year, DLF announced the sale of 17 acres of prime land in Mumbai to Lodha Developers for Rs 2,700 crore, almost four times higher than the price it had paid in 2005.

India’s largest real esate company DLF had bought the land from National Textile Corporation for Rs 703 crore. It decided to sell this piece of land as part of the strategy to exit from non-core business.

In a statement, DLF said that the company has sold the entire stake in its arm Jwala Real Estate, which owns this land at Worli in Mumbai, for “an enterprise value of about Rs 2,700 crore”.

Separately, Lodha Developers said it has entered into an agreement with DLF to acquire the land. “The acquisition is for a consideration of Rs 1,200 crore for both equity and debentures of the company. In addition, Lodha is also expected to take over about Rs 1,500 crore of liabilities that Jwala has incurred for the development since it purchased the property from NTC in 2005,” Mumbai-based Lodha said. With this current deal, DLF has raised nearly Rs 8,000 crore from sale of non-core-assets (hotel plots and IT SEZs/ Parks) in the past couple of years. This is the biggest land deal since March 2011 when Wave Infra bought 151 acres of land in Noida for a whopping Rs 6,570 crore.

Gateway with the Swarovski touch

World’s leading crystal brand Swarovski has tied-up with Pune-based real estate firm City Corporation for providing lighting and interior products to its luxury residential project ‘Amanora’. City Corporation is developing the township project in Pune across 500 acres, where it plans to construct a luxury residential tower ‘Gateway 1’, which will have the lighting and interior products of Swarovski. This deal marks Swarovski’s first big size tie-up in the real estate segment in the world.

Spread across 14 acres, Gateway Towers 1 will have over 700 units, offering high-end apartments, including 2-BHK to six-bedroom penthouses with private pools.

CREDAI to set up realty institute

Aiming to promote excellence and bring in global standards in real estate sector, CREDAI has announced two major projects — an institute for research and professional studies and educational scholarships for needy students pursuing higher education.

The CREDAI Institute of Real Estate Research and Professional Studies will be set up at Ahmedabad near a Kensville Golf and Country Club adjoining the renowned iCreare-the International Centre for Entrepreneurship and Technology. Announcing the projects, Lalit Kumar Jain, National President of the apex body, said Jaxay Shah, Vice-President of CREDAI and Director of Savvy Infrastructures Ltd, has donated land for the Institute. Kumar Urban development Limited (KUL) headed by Jain himself, has committed Rs 1 crore for the institute's building. The CREDAI institute, aiming at imparting world class education and research in real estate related subjects, will be functional from June 2014. It and will have tie-ups and affiliations with top international institutes having expertise in real estate domain.

Plots handed over

FDI-funded real estate developer, Alpha G:Corp recently handed over the possession of plots at Alpha International City, Fatehabad (AICF). The integrated township whose aggregated current worth has been pegged approximately at Rs 200 crore has been developed on 52 acres of land in Sector 4, Fatehabad. AICF is located on National Highway 10 that is one of the main arteries connecting Delhi and Punjab. Launched in 2008 the project is fully sold-out. It is also the first integrated township with international standards being developed in Fatehabad having received the license from the Director General Town & Country Planning, Haryana. AICF has been designed as a self-contained township with plot sizes ranging from 290, 360, 500 and 970 sq yards. The township also conducted a successful draw of lots for allotment of 38 plots to individuals belonging to the economically weaker section (EWS) of society in March this year.

— TNS and Agencies