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Tamil Nadu RERA Makes The Unregistered Housing Projects Fall In Line

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Tamil Nadu RERA Makes The Unregistered Housing Projects Fall In Line

The Tamil Nadu Real Estate Regulatory Authority (TNRERA) has started making the unregistered projects fall in line. ambitious Real Estate Act, 2016. Hence bringing the developers under the regulation of the ambitious Real Estate Act, 2016 for a greater transparency and accountability in the real estate sector.

The significantly changing entity in this scenario are the banks, who have ceased the loaning process to the projects which have not been listed under the Real Estate Regulatory Authority (RERA). As the absence of RERA clearance for a housing project prevents them from lending to both developers and buyers.

Under the RERA act, the developers are obligated to ensure their 70% of the project funds in a dedicated bank account. It is the disbursement of loans, that is bothering the banks as under the prescribed RERA laws, their credit is no longer protected. Therefore, for safety banks sought additional guarantee on personal properties of promoters while lending out loans to a few real estate developers.

As the civic body does not have a provision for completion certificate, the developers have decided to register with TNRERA on their housing projects, without which their projects will not be eligible for housing loans. A definitive check should be made by the buyers ensuring that developers are TNRERA-accredited, before any kind of purchases. This includes all types of real estate project – both ongoing and future, that involves land exceeding 500sqm or a specific number of eight apartments.

These projects can continue unless the developer has registered with the authority. Registration procedure ensures a validity of five years followed by proper timely renewals with the authority. All the details of the projects will be displayed on the TNRERA portal with names, addresses and the registration numbers. The authority has the power to revoke the licenses as this has brought a change in a large unregulated sector.

The Act would also help in building the confidence of the consumers, providing an equal opportunity for them. With RERA in place and the infrastructure status been accorded to the affordable housing sector, foreign investors are also looking at the Indian real estate market with huge investment options in mind.

Regulations

MahaRERA- An Effective Regulator, Protecting The Buyers Interests

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MahaRERA- An Effective Regulator, Protecting The Buyers Interests

Maharashtra Real Estate Regulatory Authority (MahaRERA) is seeing a rise in complaints against realty developers by the homebuyers. The respective projects are registered with MahaRERA and are seeing the issues regarding delays in delivery and unsigned agreements. More than 13,000 applications for registration of ongoing projects have been received by the MahaRERA. The processing and registration have started and nearly 8000 projects are already on the go. These registered projects are listed on an online portal of the regulator.

Recently a group of home buyers from Santacruz, have filed complaints against Terrain Infrastructure. Buyers wanted the developer to finish the registration of the agreements of their properties so as to prevent Terrain Infrastructure from selling anymore flats in Terrain Heights, an 11-storey building in Vakola.

During the case proceedings, it was found out that the complainants are awaiting a decision in City Civil Court, where the case was earlier transferred from Bombay High Court. Gautam Chatterjee, chairperson MahaRERA, dismissed the complaint. The major development happened when the co-promoter of the project filed a complaint against Terrain Infrastructure. Being the co-promoter, Shubh Shelters India Pvt Ltd is a promoter company formed by two directors from Terrain Infrastructure itself. They stated that they are unable to execute agreements for sale in the absence of power of attorney, which Terrain Infrastructure has failed to provide, as per their mutual agreement signed in 2014.

Shubh Shelters were supposed to get 16 apartments from the Terrain Infrastructure, including the disputed 14 apartments with the third party rights. An exclusive power of attorney was also supposed to be given to Shubh Shelters for the execution of sale agreements. MahaRERA decided to intervene despite the civil nature of the case, in order to protect the interests of the 12 home buyers, owning a total of 14 apartments.

Raja Advani, Terrain Infrastructure’s director was instructed to execute and registered power of attorney in favour of Shubh Shelters within 7 days. A period of 45 days has also been provided to the co-promoter by MahaRERA, to register the sale agreement with the home buyers.

In another case, that of Anchor Park project in Vasai, four home buyers in Anchor Park have taken a complain to MahaRERA. These four buyers occupied their flats in November 2015 without any Occupancy Certificate (OC), even when the developer had not completed all the common amenities in the project.

MahaRERA directed Lakozy Builders LLP to finish the amenities work by December 31, 2018 and initiate the process of formation of a co-operative housing society within 30 days. Which is in accordance to a circular issued by the Commissioner Cooperation and Registrar of Co-operative Societies of march 2016.

MahaRERA in its many cases, has directed many developers and promoters to advance their respective possession dates and handover apartments to the buyers. One such case is of Ekta Parksville Homes Pvt Ltd and Michael Rodrigues, where the MahaRERA issued directives for them to advance the possession dates to December 31, 2018 and the handover dates to March 31, 2019. All in compliance with the Rule 4 of Maharashtra Real Estate Rules. Which states that the revised date of possession for an ongoing project has to be in correspondence with the balance development.

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Anti-Profiteering Law: Regulating The GST Inspired Price-Hike

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Anti-Profiteering Law: Regulating The GST Inspired Price-Hike

In a recent development, GST authorities have issued a warning to the developers about a disciplinary action being taken upon refraining from cost reduction, so as to pass the benefits of input tax credit to the buyers. GST law states that, making July 1st as the deadline for the full or partial payment of a flat and imposing an additional tax incidence after July 1st will be against the law.

It enforces the builders to pass on the benefits of the lower tax burden to the consumers by reducing the prices or instalments. Any kind of payment of higher tax rate per instalments, on the under construction flats, should not be demanded by the developers. As this will violate the anti-profiteering clause in Section 171 of the GST Act.

National Anti-Profiteering Authority (NAA) is the vigilant body in the play now, its chairman and technical members have been created by the union cabinet to enforce the anti-profiteering law. NAA with the standing committee, the screening committee and the directorate general of safeguards will be the main components of this structure.

This framework came into existence due to the recently reduced tax rates which have promoted a large amount of illegal profiteering across the nation.  Under its provisions, a screening committee can oversee all the consumer complaints against the company in a particular state. If the case pertains to a national level than it can be presented to a standing committee.

GST is meant to integrate all the different types of taxations in India. There are five types of GST like Central GST, State GST, Integrated GST, UTGST and compensation cess. The real deal behind this kind of comprehensive taxation system is the introduction of Input Tax Credit (ITC) mechanism, which helps in eliminating the cascading effect of taxes.

The input credit is supposed to be taking off the headline rate of 12%. As a result, the input taxes embedded in the flat rates will not be a part of the cost of the flat. So the input credits must complete the 12% and it is for this reason that refund of extra tax credits to the builder has been denied.

Thus by reflecting this credit in their respective account, the developers are making a large profit. Refraining from their responsibility of sharing the profit earned from ITC, with common people in terms of reduced prices, the developers are trying to take undue advantage.

Thus the anti-profiteering law makes sure that if any complaints is found true then than the registration of the respective builder can be cancelled and all extra money will be repaid by the builder.

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Regulations

PM Modi Hits Another Note: Aadhar Linkage To Property Transactions Gets A Mandatory Status

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PM Modi Hits Another Note: Aadhar Linkage To Property Transactions Gets A Mandatory Status

According to latest reports, a staggering 60 percent of the black money in India has been inserted into immovable assets such as commercial and residential properties. Major players in the game are from all sections, like individual to family-managed trusts and charitable organisations. After few months of Prime Minister’s announcement of demonetisation, alleged illegal money transactions made a hush comeback in the real estate sector. The elite properties were the major targets. Such properties crossed a whopping number of 3 crores. However, the government has been calling the demonetisation as the key factor in the elimination of black money. Perhaps there was more to the planning by the government. One such step has been announced, that is the linking of Aadhar to the immovable property transactions.

Union Housing Minister Hardeep Puri has no doubts about the linkage of Aadhar with the property transactions. According to him, the government is now putting Aadhar forward to ensure accountability and complete transparency. After a lot of criticism from the various sectors over making Aadhar mandatory in phone numbers, PAN, PPF, bank accounts, now the government is ready to narrow down on the immovable property transactions. All efforts being put to eliminate the flow of black money in the real state sector. It has been hinted since a long time by the government in its various press releases, that steps like demonetisation are just the tip of the iceberg.

Aadhar is being seeded to the bank accounts on a speedy rate by the government, as they are also legally trying to validate Aadhar as mandatory for the public welfare schemes. Prevention of Money Laundering Second Amendment Rules, 2017 has been the platform on which the government is basing the mandatory status of the Aadhar and bank accounts linkage. More than 700 million bank accounts had already been linked to Aadhar. Also the Insurance Regulatory and Development Authority of India (IRDAI) declared the linking of all the current policies to Aadhar as mandatory on November 9.

This step by the government might have huge repercussions on the real estate sector. In this last year after the demonetisation, GST and RERA, the real estate sector has majorly slowed down. And after the Aadhar linkage, this sector might take a longer time to recover from this hit.  On the brighter side, the majority of the people are positive about this step as it will encourage an enhancing of the supply-demand scenario and provide a complete transparency. As the government loads the anti-benami Act, the respective section of investors will rush to disinvest, this may bring down the prices. All the tax profiles of the property registrations valued above Rs 30 lacs are being examined by the Income Tax department. According to findings of the Central Board of Direct Taxes (CBDT) there are 621 such properties and assets worth about Rs 1800 crore

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