Connect with us

Regulations

VICTORY FOR MUMBAI CONSUMER BODY AS STATE GOVERNMENT ACCEPTS SUGGESTIONS TO REAL ESTATE REGULATORY ACT RULES

Published

on

VICTORY FOR MUMBAI CONSUMER BODY AS STATE GOVERNMENT ACCEPTS SUGGESTIONS TO REAL ESTATE REGULATORY ACT RULES

The consumer rights group Mumbai Grahak Panchayat (MGP) is claiming victory as 10 of its suggestions to the rules of Real Estate Regulatory (RERA) Act has been accepted by the state government. However, one of its major suggestions about payment schedule has not been accepted by the state government.

Though the Act is passed by the Parliament, states are allowed to frame the rules suitable to local conditions since housing falls in the concurrent list of the constitution.

The draft rules under the Act were published by the state government in November 2016 and the last date to file suggestion and objection was December 31, 2016. Now, the rules under the Act have been notified by the state government and act will come into force from May 1, 2017.

As per the act passed by the Parliament, the builder can demand 10% of total value of flat from a consumer at the time of booking flat, another 20% at the time of registering an agreement and another 15% when construction reaches at plinth level.

The recommendation by the MGP requested the percentage of payment at the time of registration of agreement and when construction reaches plinth level be revised to 5%. The rest of the payment, MGP suggested, shall be linked to the progress of construction. However, this suggestion was not accepted by the state government.

But the other suggestions adopted by the state include beneficiaries of slum, chawl and other redevelopment projects under the ambit of RERA. It also brought down fee for consumers from Rs 10,000 to Rs 5,000 in case of lodging a complaint against builder with RERA.

Before the new recommendations were included, builders were allowed to form the housing society of flat owners only after getting occupation certificate but now a builder can form the housing society only after selling 51% flats.

Yet another change in the rules is builder’s option to revoke agreement only after default on three installments after sending notice by register post against the earlier rule where the builder was allowed revoke the agreement with a consumer on single default of installment and by sending a notice via e-mail. The MGP president Shirish Deshpande said, “Even if the state government has not accepted our major suggestion on a payment schedule, we will continue our efforts to ensure that, these rules get amended.”

Source: Mumbai Mirror

Regulations

373 Maharashtra Cities To Fall Under PMAY Scheme

Published

on

By

The state of Maharashtra has added 232 cities to the existing 142 which makes it 373 cities under the Pradhan Mantri Awas Yojana Scheme (PMAY).

The officials at the housing department feel that this step will aid the government take up more projects under the PMAY scheme.

Sachin Kulkarni, Builder shared his concerns over the lack of coordination between the department in executing PMAY projects. He said, “This is a good sign. However, the PMO’s seriousness in promoting HFA is diluted by the time it reaches the authorities. Apart from collecting application from interested beneficiaries, nothing has moved on the ground in urban centres. I hope that this initiative moves on fast track”.

Maharashtra CM Devendra Fadnavis recently states that the in order to create more housing stock the state’s Slum Rehabilitation Authority scheme be brought under PMAY so that it can receive the subsidy to create more affordable housing. He clearly mentioned that the government intends to create more housing stock and it was taking various initiatives and making policy changes for it.

Also Read- Affordable Housing To Get A Boost With PMAY’s Scope To Be Extended To Private Lands

Continue Reading

Regulations

Real Estate Sector May Fall Under GST What Does It Mean For Buyers?

Published

on

By

One after the other the real estate sector has witnessed massive policy and law changes in its systems. Nonetheless, the tide has not passed yet. The GST council will take up a proposal to bring it under the uniform nationwide levy.

As the industry is still recovering from the RERA Act, the finance minister, Arun Jaitley said that there is a strong case to include real estate in the new indirect tax regime. He said this last week and also mentioned that GST Council will discuss it in November.

At present, the home buyers are paying 12 percent GST on under-construction properties. This percentage includes two taxes which are stamp duty and registration. The rate of which varies in each state but GST will make them uniform.

Santosh Dalvi, KPMG India partner (indirect tax) said, “If the entire real estate is brought under GST, they would have to abolish the stamp duty and we don’t know how the government plans to compensate the states for their loss.”

The stamp duty with registration and GST comes to approximately 18 percent for under construction properties. He further said, “So, it’s important to look at what rate it will be taxed at. We can then look at consumer prices”.

While agreeing, Bipin Sapra, EY partner (indirect tax), added, “It’s going to be a test for the government”.

Developers also pay taxes on raw materials. However, unlike other businesses, they don’t get any tax refunds through input credit. GST taxes every stage of the business activity to better compliance and compensates for it by permitting refunds.

Anuj Puri, Anarock Property Consultants chairman, said “By including real estate under GST, builders can get a fair amount of input credit, helping bring down costs,” He added that it would make homes cheaper for buyers.

According to Sapra, it will depend on the tax rate applicable.

Niranjan Hiranandani, co-founder of Hiranandani Group said, “Real estate under GST ambit means consumers will only have to pay one final tax.” He stated that with the commencement of RERA it brings transparency and GST would reduce the burden in terms of taxes payable while buying the home. He concluded, “Not only will this create positive sentiment but it should also boost actual sales”.

Also Read: Affordable Housing Is The Changing Face Of Indian Real Estate

Continue Reading

Regulations

Home Buyers Will Be Covered Against Builders Who Are Going Bankrupt

Published

on

By

In a move to protect home buyers from builders declaring their bankruptcy, the Insolvency & Bankruptcy Board of India (IBBI) has amended rules which make it necessary for any company to showcase how they have dealt with interests of all stakeholders. This is directed towards companies like Jaypee Infratech and some of the entities of Amrapali Group.

The regulator has informed about the revised rules last week. This will ensure that banks and other creditors do not get away by protecting their interests at the expense of others who are impacted by the action.  Banks are part of the creditors’ committee. They become an important decision-making body after a company is admitted for bankruptcy.

An expert bankruptcy lawyer said, “The change in the rules has plugged a gap as flat buyers are of the view that there is nothing to protect their interests.”

According to the new law that was enacted last year intends to speed up the resolution process in a period of 180 days, with a possible extension of 90 days. This will be done by appointing insolvency resolution professionals who will take charge of the company’s operations and prepare a plan. As per the law, an information memorandum will be finalized if the creditor’s committee is willing to take applications from other interested companies to take over the company.

The insolvency experts say that the law providing for the plan binds corporate debtor (the company) and its members, employees, guarantors, and creditors, other stakeholders involved in the resolution plan. However, there are no obligations mentioned in the rule to give any treatment to the stakeholders other than the financial creditors (banks) and operational creditors, which includes vendors and others who may have dues.

The National Company Law Tribunal, based on the comfort provided by the revised rules, will choose the final resolution plan based on bids that are received. The lawyer further said, “The tribunal will not clear the resolution plan without giving notice to all stakeholders and the flat buyers can raise objections at that point of time.”

Also Read: Tanvi Group Fail To Deliver Homes And Declare Bankruptcy

Continue Reading

Trending