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Redevelopment of Andheri Slum Deal Gets Terminated By SRA

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Redevelopment of Andheri Slum Deal Gets Terminated By SRA

It is dismal that a project that was anticipated to start almost 20 years ago still stands in the same state. The Slum Rehabilitation Authority (SRA) had appointed developer K S Chamankar Enterprises to redevelop a sprawling slum property on the Andheri regional transport office plot. The builder miserably failed to even start the project and thus the SRA have terminated the contract.

The order by SRA CEO Vishwas Patil took five years even after highlight that the state public works department appointed developer Chhagan Bhujbal, was in jail.

Chamankar contractor was awarded the contract to build Maharashtra Sadan guest house in Delhi without inviting tenders in 2007 by the PWD. As per the agreement, Chamankar was supposed to build three public buildings in the budget of few hundred crores and give them to the state government. Chamankar was given the slum development rights of Andheri RTO which would get him more than Rs 4,000 crore. He was also sanctioned 8.57 lakh sq ft of sale floor space index (FSI) by the SRA.

A charge-sheet was filed last year against Bhujbal, his son Pankaj, nephew Sameer and 14 others in the Maharashtra Sadan case by the state anti-corruption bureau.

Patil clarified on Monday that the letter of intent (LOI) granted to Chamankar for the plot redevelopment has been terminated. He complained that “The builder failed to start the project for 20 years.” As per the SRA sources, he even stopped paying rent for transit accommodation to over 1,000 slum-dwellers for two years.

The order said, “Although the Andheri land is costliest and prime real estate, the developers did not show much interest.’’ On the contrary, Chamankar claimed that authorities did not cooperate with him when it came to speedy approvals. The order further added, “The SRA sanctioned around 8 lakh sq ft of FSI, which is like a goldmine, but the developer failed miserably in fulfilling the task of rehabilitation of slum-dwellers.’’

In the last 20 years, the developer could only manage to build 155 of the 911 tenements it was set to build for slum-dwellers. Redevelopment proposal for slums like Anna Nagar, Kasam Nagar and Vithal Rukmini Nagar was accepted by the SRA in 1999. The LOI was granted on October 27, 2004, for one slum and on June 26, 2006, for two others. An amended LOI was granted on July 9, 2007, and March 27, 2012.

SRA sent a notice to Chamankar Enterprises, P S Chamankar and Associates and all promoters of the cooperative housing societies on 12th January asking why a new developer should not be appointed to complete the project. L&T, construction company, was in a joint development agreement with Chamankar but is not ready to take over the project. Rs 600 crore has been paid as advance by them.

Also Read: Basic Real Estate Terminologies – Beginner’s Guide Part 2

Regulations

373 Maharashtra Cities To Fall Under PMAY Scheme

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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

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Regulations

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

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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

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Regulations

Home Buyers Will Be Covered Against Builders Who Are Going Bankrupt

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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

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