Tag Archives: Anuj Puri

Housing.com co-founder Rahul Yadav back in real estate

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News Point: Rahul Yadav joins ANAROCK as Chief Product & Technology Officer.

Rahul Yadav, Housing.com, ANAROCK, Technology in Indian real estate, Technological innovation in Indian real estate, India real estate news, Indian property news, Track2Realty, Track2Media ResearchANAROCK Property Consultants, which former JLL Country Head Anuj Puri launched last month, has appointed Housing.com’s co-founder and ex-CEO Rahul Yadav as Chief Product & Technology Officer.

“This appointment is in line with ANAROCK’s highly technology-driven orientation and business model for its residential advisory services,” says Anuj Puri, Chairman – ANAROCK Property Consultants.

“The online real estate business is still in its fledgling stage in India, and we are taking the lead on boosting it into maturity. So far, the real estate sector has not been able to emulate the success of ecommerce for consumer durables and services. We intend to change that, and Rahul Yadav’s experience in harnessing the consumer housing market at via technology will add the key element. The cutting-edge and highly consumer-focused technology platform and support infrastructure we will build here will bring in a complete transformation of the residential property business,” he adds.

Indeed, real estate in India continues to see most of its success as an offline business, with very little technological innovation happening to speed up its adoption as a viable online business model.

Real estate advisories, online property listing aggregators and even developers have made some headway, but this field nevertheless remains underserved because of lack of integration with credible expert offline advisory and transaction support. In short, the continued challenge lies in successful sales conversion in a manner which also places the customer’s interests first.

“Indian residential buyers and investors will not embrace an ecommerce model of property purchase unless they get a seamless experience from online selection to offline advisory and transaction closure,” says Puri.

“We have already pioneered this model in the Indian real estate space and will now back it with a robust technology infrastructure, in the building of which Rahul Yadav will now be instrumental. Backed by our firm business philosophy of ethics, integrity and values over value, we are now taking the online real estate business in India to the final level.”

Rahul Yadav has demonstrated outstanding success in setting up of a real estate search portal wherein prospective buyers can conduct housing searches based on geography, unit size and various other key factors. He has pioneered the verified listings and data approach to the online real estate business in India. As the brain behind a highly successful, technology-intensive platform, Rahul Yadav’s credentials are well-established. Before joining ANAROCK, Rahul also advised Lodha Group for a brief period.

Rahul Yadav says, “I consider my appointment as Chief Product & Technology Officer at ANAROCK Property Consultants the logical next step in my career, and it is of course a complete privilege to work with an outstanding industry leader like Anuj Puri. Given my product and technology background, I am fascinated by the highly tech-driven approach that ANAROCK is adopting for its residential real estate business, and I already feel very much at home here. I am extremely excited as I look at the immediate and long-term future of this company as a result of these innovations.”

Rahul, who will be based out of ANAROCK’s Mumbai offices in Bandra-Kurla Complex, assumes his new role from today and is already building his team of product and technology experts.

The BREXIT effect

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News Point: Post BREXIT investors will now be in a risk-off mode, meaning more number of investors would either pull out investments or stay put without investing further until clarity emerges. 

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The real estate sector in India will continue recovering on the back of a resilient Indian economy and strong capital inflows. BREXIT will not disturb that recovery much, since India’s office market leasing is dependent only by 5-7% on UK-headquartered companies, and investments and activity of PE Funds from EU countries is more in India than in the UK.

Investors in the UK looking to invest in residential properties outside UK will have to study and compare returns and risk assessments for real estate in India versus real estate in the EU. After exiting EU, locations like Greece, Spain and Portugal may not remain as attractive to UK investors, and India may benefit from that.

However, investors will refrain from making plays for some time as they will want to develop a good understanding of the comparative risks- returns scenario.

The first reaction of investors to a situation like this is to exit from sectors that are perceived risky. Given the Indian stock markets’ recent performance, real estate was considered risky until recently; it had only begun to emerge out on the back of policy reforms like RERA and other factors providing a positive market momentum.

Given a risk-off sentiment, realty stocks could witness selling pressure as investors scramble for safe-haven sectors such as FMCG or pharmaceuticals.

Several major IT firms such as Infosys, TCS and HCL Tech earn a third of their revenues from the EU. A possibility of EU slowing down will have an adverse impact on their revenues. The IT sector is a leading occupier of office space in India every year.

Year 2015 saw many European retailers entering India as part of their expansion strategy to new markets. We had anticipated this trend to continue in 2016. However, if the EU economic outlook weakens, their expansion strategies may be reconsidered.

India could be an anchor of stability, given that a proactive government has carried out reforms at a satisfactory pace and that its inflation has remained controlled over the last one year or so. Also, given a normal monsoon forecast for this year, even food inflation could be kept in control in the near-to-medium term while triggering a healthy growth of agriculture and rural economy.

Given that BREXIT has happened, we foresee US Federal Reserve to defer their decision to hike interest rates, which is positive for the emerging world, including India.

India’s bi-lateral trade with Great Britain is export surplus, which is good for India. However, compliance cost for India’s exports will rise. At the same time, India can negotiate more favourable trade terms with Britain. After losing out to free trade with the EU, Britain will be under pressure to look for balanced trade with big emerging economies like India, which is the fastest-growing economy.

When economic recession hit the US, Indians took up a leading position among investors keen to take advantage of the falling property prices there. The British Pound is currently at a 31-year low, which itself provides an attractive rationale for foreign investors with an appetite to do so to acquire properties in the UK.

There is no doubt that the UK – particularly cities like London – has always held a special attraction for Indians, particularly HNIs, with business interests or families there. Such individuals will certainly keep a close watch on the effect of Brexit on UK’s property prices, and it is very likely that many more Indians will seek to invest there.

By: , Chairman & Country Head, JLL India

A checklist to remove affordable housing bottlenecks

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Bottom Line: Large-scale affordable housing in cities is the greatest necessity of urban India today.

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Large-scale urban developments – the only way to create affordable housing in the required magnitude in our major cities – are becoming increasingly difficult due to lack of land parcels, congested transit routes, lack of finance, rising input costs and regulatory hurdles.

If we take a birds-eye view of the problems plaguing this sector, the vision of Housing for All by 2022 becomes a hazy one at best. It is vital that these issues are addressed on a priority basis urgently so that a comprehensive framework can be established for ensuring the development of affordable housing.

On analysing the bottlenecks that currently hold affordable housing in India to ransom, it emerges that any approach towards a workable solution will have to encompass at least seven important functions. These are:

1.    Formulate guidelines for identifying right beneficiaries:

It is important to formulate guidelines that will identify the appropriate beneficiaries for affordable housing projects. This is critical, as the involvement of speculative investors in such projects defeats to whole purpose. The National Population Register and issuance of unique identities via the Unique Identification Authority of India will become crucial elements in identifying the right beneficiaries if they are linked with income levels.

2.    Innovate on micro-mortgage financing mechanisms to ensure a larger reach:

Effective financing through micro-mortgages by utilising the reach of self-help groups (SHGs) and other innovative financing mechanisms can ensure that housing finance is available to large sections of lower income groups (LIG) and economically weaker sections (EWS). Flexible payment mechanisms should be put into place, as households in low-income groups typically have variable income flows.

3.    Incentivise developers to enter affordable housing segment:

Urban local bodies can develop guidelines by giving free sale areas, extra floor space index (FSI) and other policy-level incentives to real estate developers, thereby attracting them to develop affordable housing. Schemes for redevelopment and slum rehabilitation should be developed with incentives that generate sufficient returns for the developers, while simultaneously controlling the development density. A cost-benefit analysis of regulations should be carried out from a development perspective to ensure that schemes to facilitate affordable housing development are actually realistic and feasible.

4.    Streamline land records to improve planning and utilisation of land:

Adequate availability of land for housing and infrastructure can be ensured by computerisation of land records, use of geographical information systems, efficient dispute redressal mechanisms and implementation of master plans. The central government and some state governments have already begun work on this front, but there is still a lack of required pace.

5.    Include mass housing zones in city master plans:

Additionally, ensure that these zones are developed within a pre-determined schedule, accounting for the future requirement of affordable housing. Some cities have already dedicated zones for development of affordable housing in their master plans. This needs to be replicated in other cities and towns – with a sharp focus on development timelines.

6.    Deploy well-researched rental housing schemes in urban areas:

Authorities like the Mumbai Metropolitan Region Development Authority (MMRDA) have experimented with rental housing schemes in the past. However, these have not been very successful as a proper framework for such schemes was missing. The most visible limitations were that development of rental housing took place in far-flung areas which are not suitable for affordable housing, and the lack viable means to identify the right end-users.

7.    Formulate policies for greater participation from private sector:

The private sector can play a big role in affordable housing, most notably in terms of providing technological solutions, project financing and delivery. Disruptive innovations on these fronts, with a specific focus on affordable housing, are the need of the hour. We need imaginative, workable solutions to reduce the costs of construction in the face of rising input costs. As construction costs account for a significant portion of the selling price of affordable housing units, savings accrued on the back of such innovations can immensely benefit the occupier.

It bears mentioning that none of these solutions will work well in isolation. Given the complexity of the affordable housing conundrum in India, only a multi-pronged approach with equal weightage given to each element can hope to break the deadlock.

The Housing for All by 2022 is indeed a workable vision if a determined and focused effort based on these solutions is employed – and it will definitely yield the desired results.

By: Anuj Puri, Chairman & Country Head, JLL India

Impact of 100% FDI in e-commerce on Indian real estate

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Bottom Line: 100% FDI in Indian e-commerce will open the floodgates to a host of other players in this segment.

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The second impact will be on the demand for warehousing and logistics real estate. Unlike the demand for office spaces, this additional requirement will be spread fairly evenly across Indian cities. E-commerce players need to be able to deliver quickly to their customers, and one of the most important clientele segments for them are in the tier 2 and tier 3 cities. We will therefore see a significant step-up in demand for warehousing spaces in and around these cities.

On the flip side, there has been a rider clause attached to the FDI liberalisation on e-commerce. This is that e-commerce players now will be unable to sell below market prices and not more than 25% of sales will happen via one vendor (this proviso does raise a question about the term ‘market price’, given that there is fairly broad accepted range for most products). In any case, this announcement brings brick-and-mortal retailers on a more level playing field, and would help to still the outcry over unfair trade practices to an extent.

Overall, this is positive for the retail industry; more rational behaviour will now prevail in terms of market trade practices, and mounting of losses by most e-commerce companies will be curtailed. Online sales may reduce as deep discounts disappear, although losses will also be capped.

If we look at the West, e-commerce and brick-and-mortar players coexist happily, and this dynamic can definitely reflect on the Indian terrain as well. With e-commerce in India still at the nascent stage, the base being low even now and the growth rate very high, there is enough scope for both e-commerce and brick-and-mortar retail to flourish.

By: Anuj Puri, Chairman & Country Head, JLL India

Government easing approvals process for realty projects

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To improve ‘ease of doing business’ in urban areas, the Government has been streamlining many procedures. 

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A decision to streamline approvals and enable time-bound clearances for construction projects in urban areas by empowering urban local bodies to settle a wide range of approvals and adopting appropriate technology was taken in November. The central government aims to reduce movement of files between central government ministries and local government bodies, which prolongs the time to give approvals.

According to a report by the Confederation of Real Estate Developer’s Association, it takes up to three years to start a project after land is acquired, on an average. By this time, the cost of land rises by 24-30% due to hefty interest payments as bank loans are not available for procuring important raw material in this sector. This cost ultimately gets passed on to the customer. A simpler and uniform process will help bring down the cost of each unit in a project by 20-30%.

Progress achieved so far:

  • In association with ISRO, The Ministry of Culture is developing colour-coded maps for 281 monuments that account for most of the construction-related approvals, using which municipal bodies can accord approvals in quick time.
  • The Ministry of Environment, Forests & Climate Change has come out with revised and simplified environmental norms, and these will be notified at the earliest after consultations with the Ministry of Urban Development. Urban local bodies and state governments will be empowered to accord approvals at their level, based on their willingness and ability.
  • The Ministry of Urban Development will soon issue Model Building Byelaws incorporating all revised and simplified norms and processes enabling urban local bodies to approve building plans in quick time.
  • The Ministry of Civil Aviation has reported that applications received by the Airports Authority of India for height clearances in airport zones have come down by over 200 per month further to development of Colour Coded Zonal Maps (CCZMs) for 12 airports that account for 58% of total such applications and making them available to respective urban local bodies.
  • CCZMs to be developed for another 28 defence airports that are used for civilian purposes also, to bring them in line with what is being done for civilian airports.
  • The Ministry of Civil Aviation also commissioned improved version of online NOCAS – No Objection Certificate Application System – eliminating human interface and enabling faster issue of NOC through automatic calculations of permissible heights in airport zones with applicants being able to track the status.
  • The Ministry of Culture has come out with a mobile-based app that enables online approvals for construction in the vicinity of monuments in just 72 hours through integration of websites of National Monument Authority and those of respective urban local bodies. The time taken at present is about 90 days.

It will be interesting to see to what extent these new steps can cut down the overall approval process. In any case, the Union Government will have shown the way to State governments and urban local bodies to follow in its footsteps and simplify processes to further improve the ease of doing business in urban areas.

By: Anuj Puri, Chairman and Country Head, JLL India

Will the real estate bill finally become a reality?

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By: Anuj Puri, Chairman and Country Head, JLL India

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It will create a much-needed consumer right protection umbrella for buyers of real estate, thereby increasing consumer confidence as well as creating lasting developer brands strong on quality and timely delivery of their projects.

Although there will be strict punishment for developers under this bill, the relevant government agencies and approval processes have not been brought under its ambit. Without achieving single-window clearance, there may be cases where bona-fide delays by developers may still result in an unfavourable penalty on the developer community.

Without ensuring that the approval process is not delayed by civic agencies’ inaction or bringing in single-window clearance, the regulator may inadvertently add another layer to the longer processes already delaying projects.

The government has indicated that it will streamline the approvals’ process and finally move towards a ‘single-window clearance’ system. This, in conjunction with the regulator, will provide a positive impetus towards achieving the housing dream while ensuring a level-playing field for developers and buyers.

However, given the quantum of projects that the state regulator will have to cover now – due to norms on size of projects having been relaxed further from 1,000 sqm to 500 sqm – the onus on the state regulator will be huge, particularly for realty-heavy states like Maharashtra, Karnataka, etc. In such a scenario, the regulator could operate through a hub-and-spoke model, with separate districts having a dedicated branch.

The major amendments okayed by the Union Cabinet now include:

  •        The money collected from buyers is to be deposited within 15 days. It is to be maintained in an escrow amount, which will be 70% of the construction cost, and is meant to be used only for the specific project.
  •         The term of imprisonment of three years recommended by the government has been upheld for all contraventions and even in cases where the developer does not abide by the decision of the appellate tribunal imprisonment has been recommended.
  •          The bill will be applicable on commercial or residential properties which are more than 500 sqm in size or have eight flats or more.
  •         Carpet area has now been defined as the net usable area
  •         All financial statements have to be audited within six months of financial year closure by a practicing chartered accountant.
  •         The interest payable by defaulting parties (developer or buyer) has been brought at par for both in case of default by either. 

The bill will have far-reaching positive consequences for the sector in terms of its operating procedures as also create a comprehensive consumer redressal mechanism. Overall though, the real estate industry is waiting with bated breath for the Rajya Sabha to finally pass this bill. It will prove to be a year-end bonus by the government to the struggling sector.

Reputed developers who have been following financial best practices and corporate governance have welcomed the move. At best, they may have differences of opinion as far as certain nuances are concerned.

Modi government largely on track with fulfilling poll-time promises

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By: Anuj Puri, Chairman & Country Head, JLL India

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Importantly, the continuation of the previous government’s policies like Land Acquisition and Rehabilitation and Resettlement (LARR) Bill, Real Estate (Regulation and Development) Bill will have significant impact on the real estate industry once these are passed by the Parliament. India’s historically opaque real estate sector will move towards more transparency with the introduction and implementation of these key policies.

It is worthwhile to reflect on the grassroots-level transformation we can expect to see when:  

  • Millions of home buyers in towns and cities and farmers across the country (the latter being landowners affected by infrastructure projects) are empowered with the clauses in the real estate regulatory bill and LARR
  •  Investment opportunities in office spaces open up for small retail investors thanks to REITs
  •  The quality of life of millions of Indian citizens is upgraded when the proposed 100 smart and sustainable cities come to life.
  • ‘Benami’ transactions, which have for the longest time been a bane of the real estate sector, are eliminated

Let us take a look at the progress on some of the promises Narendra Modi’s party made in its electoral manifesto. Specifically, we will isolate promises which have direct bearing on enhanced governance and reinforced democratic fundamentals, which are important for India’s development and future-readiness:

Promises on track 

  • Transparency: Re-auctioning of coal blocks earned the government huge revenues
  • Efficiency:  Real-time effort towards rendering the existing institutional frameworks more efficient; a good example being the change in Food Corporation of India’s food procurement and storage mechanisms.
  • Productivity And Accountability: Narendra Modi has been directly involved in monitoring and raising the productivity as well as efficiency of his ministry officials. He is clearly bucking a chronic trend of bureaucratic unavailability and aiming to increase public access to government officials
  • Black Money: The Black Money Bill has given a moratorium period to bring back unaccounted money into the system by paying normal tax. The ongoing dialogue with the Swiss financial authorities to disclose secret accounts of Indians abroad is reaping results
  • Corruption: Wired (online) transactions are now being encouraged for property transactions. This is a major step forward for curtailing black money in the sector
  • Investor Confidence: Market confidence has improved with the strengthening of the Indian equity, debt, currency markets and equal tax regime that was promised to both domestic as well as international investment companies
  • Positioning India: Via a series of international tours, the PM is helping India rid itself of its anti-investor image and is opening up new avenues of foreign business in India, especially under the ‘Make in India’ campaign

 Decentralisation and cooperative governance

  • Gradual increase in the financial autonomy of states
  • Farmers get real-time information on Minimum Support Price through digital channels and Kisan TV. Drastic price movements have been largely under control. A focus on citizen outreach programmes as well as leveraging social media have bought people closer to the governance process.

Promises that may see progress soon 

  • States with similar problems will be able to form councils under Niti Aayog to discuss common concerns
  • Niti Aayog, along with other national agencies, will help individual states in mobilisation of resources.

Promises that saw little or no progress 

  • Relaxing clauses in the Land Acquisition and Rehabilitation and Resettlement Bill (LARR), Real Estate Investment Trusts (REITs) and Foreign Direct Investment (FDI) policies that investors find difficult to follow
  • Increased credit facilitation to start-ups
  • Initiation of employment exchange programmes with other countries
  • Obsolete laws to be scrapped or modified
  • Online dissemination of court cases for better monitoring and creation of specialised courts to fast-track delivery of justice.

In short, the Modi Government has a fairly balanced list of hits and misses so far. The trend does seem to lean more towards action than inaction. It definitely seems that Modi has every intention of living up to the larger part of his electoral promises in the future.

I agree with Reserve Bank of India (RBI) Governor Raghuram Rajan when he says that the expectations from the new government when it came to power last year were ‘probably unrealistic’, and that it has in fact taken steps to create an environment for investment and is sensitive to concerns of investors.

Source: Track2Realty

Housing for All by 2022 – far-fetched or feasible?

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By: Anuj Puri, Chairman & Country Head, JLL India

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In the previous budget, the announcement of Housing for All was accompanied by increased allotment to the National Housing Bank for both rural housing and for extending credit to the urban poor/EWS/LIG segment. There was also talk of setting up a Mission on Low Cost Affordable Housing, which was to be anchored in the National Housing Bank. However, the track record of government-built housing in terms of quantum and delivery timelines has been as abysmal as that of the private sector. The last budget did not indicate any further steps on the ‘Housing for All by 2022′ initiative.

If this very ambitious goal is indeed to be met, there needs to be a clear, well-thought out policy document outlining the exact deliverables and accompanied by methods/initiatives to streamline the development process. This entails reducing approval times while providing specific incentives to build such houses on time.

Considering that the government has seven years in all to achieve this target, it fundamentally involves construction of 30 billion square feet of housing stock, or approximately 4 billion square feet per year if we assume an average of 500 square feet per house (this is in line with creating smaller houses for the rural population and urban poor).

To state that this is an ambitious objective is perhaps an understatement. Without a clear roadmap in place, it is likely to remain unachievable. The roadblocks remain in ensuring land availability, easy credit and involving construction experts, town planners and the private sector to expedite this target.

The problem is not merely a function of making land available and increasing the FSI to incentivise developers undertaking low-cost housing projects. There is a need for systemic change in how the government perceives the entire issue of housing for the urban poor. Regulatory changes, faster approvals, removal of red tape and resolution of land litigation issues need to be adequately addressed to improve stakeholder participation. While the consent clause for the affordable housing segment has been done away with in an ordinance, the government is still struggling to get it passed through parliament.

A three-pronged approach involving the state, regulatory bodies and the executing agency/private player is of the essence. The respective state governments will also play a major role in synergising their own housing policy with that of the Centre and revitalising the role of the development authority as more a facilitator with contracts being awarded to private players/semi-government agencies such as HUDCO and NBCC utilising the Budget’s ‘plug and play’ mechanism, where all approvals and linkages are already in place.

Execution penalties will be deterrents, but it is essential to have the right development partners who will not put their hands up in the middle of project execution citing financial viability. Suitable fiscal incentives to the private industry as well as financial support through cheaper industry loans will also be required to ensure healthy participation.

Even if all these fall in place, the government’s target remains a stiff one and its agencies’ track record of delivery or assisting industry through removal of multiplicity of time-consuming approvals in the past does not provide a lot of confidence.

The only positive has been the intent of the current dispensation to move ahead with definite thought. The slogan has to move from the drawing board to an actionable plan where stakeholders at each level are clearly identified and made accountable for facilitating real, ground level development of low-cost housing. The issues which need to be resolved before the private sector will be a willing partner in this initiative have been documented earlier.

Other aspects such as granting of infrastructure status to such projects should be explored. This will provide easy and cheaper finance aiding faster development. The plug and play approach for infrastructure as enumerated in the Budget makes for an ideal blueprint to begin with for the Centre and the states so that the entire focus is towards timely delivery of housing units, which after all is the  result everyone hopes and expects in the next seven years.

Project delays, project deviations and other customer woes

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By: Anuj Puri, Chairman & Country Head, JLL India

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The question that invariably arises is whether the developer is at fault, or whether larger market forces beyond the control of developers are at play.

Construction delays – by developer or by approval authority?

Technically speaking, the time consumed in obtaining all approvals adds to the total time expended in completing the project. Any approval which is needed between the launch to the actual start of construction up till handover of the apartments to the buyer will be an additional time factor. Delays here will cause cascading delays in delivering the project as per the promised time.

Before a project is officially launched in the market and offered to buyers, there are myriad approvals that a developer needs to obtain from the state and central agencies and ministries. In any business, the longer raw material is held, the higher is the holding cost – which, in addition to interest costs in case of borrowed funds, causes an increase in the overall price of the finished product.

This analogy, when extrapolated to the real estate sector, considers land as the basic raw material for real estate development, with construction materials being the variable costs. The longer a developer has to hold his land without getting any receipts through the sale of proposed apartments, the higher his project costs escalate.

This can, in fact, be a very costly proposition all around. In the current scenario, obtaining the 57-odd permissions to begin construction of a project can take as much as two years. During this time, the cost of acquisition or even just holding the land for a project rises. Builders already have to cover external and internal development charges, license costs and often charges for change of land use from various departments, which have also risen. Cost of construction has gone up by more than 50%, as well.

However, this is only one side of the picture. Many developers intentionally undertake a slower pace of construction if sales in their project are sluggish or a larger part of the project is unsold. They may have diverted a sizeable chunk of the revenue generated from pre-launch sales to another project, or utilized it to pay off a pressing bank debt. At other times, the authorities can be blamed for not granting timely projects approvals.

Project quality and deviations

A major concern has been the difference in the promised quality and actual delivery status of the apartment, which remains a concern for real estate buyers. A change in the apartment area after buying from the developer can occur if a change in project plan is necessitated due to a design or approval issue.

A deviation of up to 10% is usually acceptable – for a higher deviation, a customer must definitely seek legal recourse. That said, project deviations can also happen because of structural deficiencies of the overall system, wherein rules are being made by the governing authorities in a reactive manner rather than on a proactive basis.

There are readily recallable examples of how abrupt changes in regulations governing real estate development can work against both developers and buyers. The revisions made in the DCR regulations in the Mumbai Metropolitan Region a couple of years ago caught the industry unawares, and added to development costs by about 15%. This included the fungible premium payable if the builder opted to take the additional 35% FSI option. These cumulatively accounted for a 20% hike in construction cost. This move has led to an increased pressure on the developers’ margin – which, in turn, resulted in price increases across most projects in MMR.

The fact that developers had to re-work their project specifications (upcoming as well as on-going unapproved projects) resulted in significant project delays. The result was an exacerbation of the cash-crunch on developers, and an outcry from their buyers.

This is not to say that developers do not tamper with overall project quality or make arbitrary changes in their project designs with a clear intent to maximize profit. By pinching off space from designated open spaces, children’s play areas, compound perimeters and guest parking areas in an originally approved plan, an unscrupulous developer can make a limited plot yield more saleable space.   

Recourse for consumers

Regardless of what causes delays or abrupt changes in project blueprints, consumers must be able to get justice. Many examples of customers obtaining favourable decisions upon approaching consumer courts exist, and the power of these forums should not be under-estimated. However, the larger and less wholesome truth is that the current legal dispensation is ill-equipped and under-regulated to offer complete consumers protection in matters related to real estate.

The Real Estate Regulation and Development Bill – long languishing on the policy drawing board and still under consideration by the government – was intended to offer vastly enhanced protection to buyers. However, after the most recent revisions to RERA, it seems that it will in fact now be less protective towards buyers. While the bill aimed at providing an alternate redressal mechanism, the new provisions are talking of no recourse to other consumer forums. This can, in fact, lead to pressure on this regulatory body in terms of an increased log of cases, though it will reduce instances of multiplicity of suits.

Consumers should be aware that a certain degree of due diligence and awareness about their rights can protect them against unscrupulous practices by developers. In the first place, due attention should be paid at the time of drafting the sale agreement. A property buyer should fully understand the contents, if necessary with the help of a lawyer, and make a clear note of what the developer has agreed to deliver.

Developer’s sales team will usually present a buyer with a readymade agreement format, and a buyer must ensure that this captures every relevant detail. If it does not, the buyer is fully entitled to ask for missing details to be included, and potential grey areas to be clarified. A copy of the final agreement must be retained under any circumstances, as this will serve as the primary evidence in a legal action filed for agreement violations.

Government passes Land Acquisition Bill in Lok Sabha

Posted on by Track2Realty

By: Anuj Puri, Chairman & Country Head, JLL India

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Anuj Puri, JLLM, Jones Lang LaSalle MeghrajTrack2Realty: The Central Government managed to get the amended Land Acquisition Bill passed in Lok Sabha. The ruling dispensation enjoys brute majority in the Lok Sabha and hence had no problem getting the Bill passed through it. This Bill is an amended version of the original Bill introduced and passed in 2013 by the previous government.

Due to a long-standing demand from industry to relax some provisions which made land acquisition difficult, expensive and time-consuming and thus harming industrial growth, the ruling party brought in some changes by the means of an ordinance. Normally, any ordinance has to be brought to the parliament within six months of it being issued to be passed again by the Parliament to make it a law.

The new Bill introduced and passed in the Lok Sabha had nine additional amendments or concessions, plus two additional clauses made by the government to appease its allies and the opposition to some extent to gain some consensus before introducing it in the Rajya Sabha. The amendments made are:

1.     Limiting the industrial corridor to 1 km on both sides of highways and railway lines. This is limited to industrial corridors being set up by the government only.

2.     Employment for at least one member of farm labour families which are affected due to displacement and land acquisition

3.     Removal of exemption from consent clause extended earlier to five sectors has been taken away from social infrastructure projects under PPP model. SIA will be conducted for such projects also.

4.     Acquisition to be of bare minimum land

5.     Survey to be undertaken of wastelands

6.     Hassle-free grievance redressal to be undertaken at district level and creation of a quasi-judicial authority

7.     Social Impact Assessment has been made a prerogative for the state governments

8.     States can create land banks of vacant land for development projects

The changes above are in addition to the earlier amendments moved through an ordinance where the government had added five sectors (defence, rural infra, affordable housing, industrial corridors, infra and social infra projects including PPP) to a list that would not require owners’ consent while acquiring land as well as exempted them from submitting a social impact assessment (SIA) and removal of restriction on acquisition of multi-crop lands for these sectors. The last social infra projects including PP have been removed from the exemption list.

The changes above have managed to appease the allies to some extent, but questions remain whether the opposition is willing to relent as most of them walked out during the vote in the Lok Sabha. In the Rajya Sabha however it is a different story as the ruling NDA does not enjoy a majority there and where the amended Bill is likely to be defeated by an united opposition. The earlier changes or removal of consent clause has been termed anti-farmer, though they are definitely industry-friendly, while removal of SIA will save costs and time both. The main point is that the process should be fair to both farmers as well as the industry.

The government has the option to either pass the bill in a joint sitting of the two houses where it will have the requisite numbers to get it passed in case it gets rejected in the Rajya Sabha or it will have to re-promulgate the ordinance again to give itself breathing space. There is also the option of setting up a parliamentary panel and referring the bill to it, though it is likely to delay passage of the bill by a further six to eight month period.

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