Impact of RERA on developers and buyers

Whether you’re a home buyer or seller, you must be wondering with RERA into play how will it impact you? This article covers all aspects of RERA. Let’s start with, what is RERA?

Passed by the Rajya Sabha on 10 March 2016 followed by the Lok Sabha on 15 March 2016, RERA or Real Estate (Regulation and Development) Act came into force on 1 May 2016. It’s an attempt to regulate the highly unregulated real estate sector by bringing accountability and transparency into the real estate sector. Real estate is regulated by the state government, many states and UT have implemented RERA.

The key takeaway from the Act:

1. Definition of carpet area

The act defines carpet area as the net usable area excluding the balcony or veranda or open terrace area and four walls surrounding but it includes the area covered by an internal partition. Now, buyers don’t have to pay for the super built areas.

2. Registrations of Projects

To make the process more transparent, before launching a project such as a residential/commercial project, builders have to register or get approval from the State real estate regulatory authority. It also makes advertising before getting an approval impermissible. Before buying a project make sure it is RERA certified.

3. Redressal Mechanism

To make sure that the project is completed within the stipulated time as promised to the buyer; RERA also seeks to promote Redressal Mechanism for any grievances. In case the developer is not able to finish the project within the timeline, the developer is liable to pay a total of 10% of the project cost and can be imprisoned up to 3 years. Builders can also lodge a complaint against buyers in case of due payment.

Click here for homes in Gurgaon  under RERA Act:  Affordable Housing Projects In Gurgaon

4. Corpus Fund

Another issue that RERA aims to tackle is the general excuse given by developers for the delay in the project is lack of funds. RERA mandates developers to put 70% of the potential buyer’s money in an escrow account and the withdrawal amount should be in proportion to the completion of the project.

5. Quality of Construction

With RERA, developers are to be held accountable for the quality of construction and repairing structural defects in a project up to a time frame of 5 years. This is to ensure that buyers don’t have to suffer in case there’s an issue at the developer’s end.

6. Transparency

To make the process more transparent the regulatory authorities will have to publish all the information like any litigation, financials, an advertisement about the developers in detail. This is for buyers to make a sound decision while purchasing.

RERA for homebuyers

If you’re a homebuyer, with RERA, you can make an informed decision while purchasing a home or a property. Here is how RERA will benefit you:

Disclosures

Now, you can access information easily. All the information about new projects or developers like financial information or litigations shall be disclosed by the developers before they register for a new project. This gives you a fair detail to make an informed decision before you buy a house.

Checks and Balances

RERA keeps a check and balance on issues like announcement and advertisement of pre-approved projects, changes in plan, non-completion of projects on time or any other issue promised by the developer at the time of purchase. This can boost the confidence of a buyer.

Credibility of developers

Developers will now be more cautious and accountable while building projects as it’s developers’ responsibility to finish the project on time and maintain or repair it for 5 years in case of any issue. Additionally, all the information published by the developer on the website can’t be modified.

Although, RERA is just launched it aims to make the real estate sector more transparent and accountable with its mandates. Now, it’s up to state governments how they implement RERA. A lot of larger awareness is needed to make sure that the benefits of RERA reach its targeted audience. With the National Real Estate Development Council’s (NARDECO), the future of RERA in the Indian real estate sector looks promising.

Check Leader In Affordable Homes Under RERA Act In Gurgaon, Karnal, Ghaziabad: Affordable 2BHK Flats In Gurgaon

Haryana Housing Policy

To ensure maximum utilization of urban land, and for catering greater housing stock for the growing need, HUDA since 1983, has introduced the idea of Group Housing in its major Urban Estates. On one hand, affordable houses become a reality through multi-storied construction and increased FAR, on the other hand, a sense of community living is inculcated. So far HUDA has allotted around 800 acres land to registered Welfare Housing Organizations, Co-operative group housing societies, and Govt. Departments for their rental housing.

Now, the Haryana government has launched a detailed Haryana Affordable Housing Scheme namely, Housing for all-2018 for core areas of municipalities in Haryana like Gurugram, Faridabad, Sohna, Karnal and so on. Under the Haryana Affordable, Housing Scheme identified beneficiaries will also receive assistance from Central Government’s Pradhan Mantri Awas Yojna like subsidy and home loans.

The main aim of the Haryana housing scheme is to provide housing for all.

Feature of all the housing projects under the Haryana affordable housing scheme are as follows:

· The minimum density permitted is 850 persons per acre and the maximum can be up to 900 people per acre.

· Maximum Floor Area Ratio allowed under the scheme is 225.

· To promote community infrastructure like market, playschool, garden, etc., builders can use a maximum of 50% area for residential purposes with a 4% area for commercial use.

· To keep the area from cluttering, builders also have organized a minimum of 15% area from the net planned area to open spaces.

· To keep the density in check, flat must not be allotted to more than 5 people.

For the allotment procedure, first preference would be given to physically handicapped people, senior citizens, Scheduled Castes, Scheduled Tribes, other backward classes, minorities, single women, transgenders and other weaker and vulnerable sections of the society among the eligible beneficiaries of the same town identified in Affordable Housing Project under Housing for All-2018.

The second preference would be given to physically handicapped people, senior citizens, Scheduled Castes, Scheduled Tribes, other backward classes, minorities, single women, transgenders and other weaker and vulnerable sections of the society among the eligible beneficiaries of other towns identified in Affordable Housing Project under Hosing for All-2018. And third preference would be given to the eligible identified beneficiaries not included in the above categories.

EMIs: a way to pay for a house

People who were born at the turn of the century, have now entered into adulthood and now they are ready to choose their preferred government, get married, take a job and so on. The point to emphasize here is, irrespective of the flow of time, there are some things that remain the same along the years like the characteristics and responsibilities that come along; one such example is the idea of homeownership.

Imagine this: You’re in your 20s, new to the city, working the 9-5 job in Gurugram, and want to live in a nice affordable flat in Gurugram filled with all the comfort you desire, and now you need only to pay a monthly rent. And if you like the city, you might have decided to settle down in the city, would you want to keep paying rent or would you rather put your money into owning a house; and begin a humble and stable life?

You must have witnessed this often, an elder raving highly of people with a house of their own that they live in, they have made a wise financial decision at the right time and there’s nothing wrong with admiring these people who have figured out what they want and invested at the right time.
In most social settings across the globe and especially in India, homeownership is seen as a sign of a sound and balanced financial system and by extension, a sign of being able to nurture and take care of your loved ones. A house bought with your hard-earned money is a matter of immense pride and can benefit you many in various ways like providing tremendous security in times of need as well as becoming a source of passive income. Behind all these emotional biases, there is a very economical logic behind it which few get to realize. Millennials are driven by their passion and are focused on making the most out of their younger days, socially as well as professionally. They want to make good money, live a life full of grandeur and still save for their earlier days. And if this is the case, aren’t EMIs the best option?

Millennials are moving out of their homes in their early 20s, keeping in mind and preparing for easy beginnings while giving priority to their finances and time, according to what they value the most. Investing in an affordable flat is perceived as a big step that holds down a person who isn’t prepared on laying down roots at that particular moment in his/her life. People would rather choose to pay minimal rent and use the rest of the money for studying, traveling, excursion, etc., something that would fill their lives with mirth. And this sentiment is entirely valid.

Whether in the short term or long term, renting is a fantastic option because it doesn’t add the unnecessary trappings of the mundane auxiliary responsibilities like maintenance and upkeep, as well as allows you to take life as it comes and savour all the opportunities. Some may even think, you can buy a flat at any point in life, and they might want to live in the moment and enjoy their life. But if you are someone who is focused on stability from the start, investing and buying a affordable flat in Gurugram assures your belief. If you are sure about your decision, you must start investing in it immediately. There are various bank schemes that permit you to pay an EMI which is equivalent to month’s rent of an affordable flat. Moreover, certain affordable housing projects give you possession of the house soon after you are done with the down payment. This can take off the burden of paying EMIs and rent.

In a turbulent market where the value of affordable housing flats keeps fluctuating, it is indeed a wise decision to make an investment by buying an affordable housing flat, laying down roots and securing your future. Hence, if your current annual income allows, by a sound financial investment you can purchase a house and give you the lifestyle you dream of.

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CLSS: Respite for affordable housing schemes

Home is essential for all families. If you or any of your family members don’t own a pucca house, then you might be eligible for Credit Linked Subsidy Scheme. (CLSS) under Pradhan Mantri Awas Yojana (PMAY) affordable housing scheme. This affordable housing scheme covers all the people falling under Economically Weaker Sections (EWS), Low Income Group (LIG)and Middle-Income Groups (MIG I and II).
You may be wondering what is PMAY subsidy? While PMAY is a broader scheme that aims to provide Housing for all, CLSS provides subsidies in the interest rate payable on home loans to make home-buying more affordable.

How does CLSS work?
As an instance, let’s say you have taken a home loan of Rs. 9 lakh for 20 years at a 9% interest rate. Under PMAY affordable housing scheme, if you are eligible for the middle-income-group I category, you’ll get an interest subsidy of 4%, which will make your effective interest rate of 5%. The total subsidy on your home loan would be Rs. 2,35,068.
Now, you can get a loan of higher amount depending on your eligibility, but the maximum amount for interest subsidy under CLSS that you will be eligible for would remain Rs. 9 lakhs under the MIG I category. Similarly, if you choose to opt for a longer tenure but the subsidy you can avail for will remain a maximum of 20 years. So, even if you take a loan of Rs. 10 lakhs for a tenure of 30 years, you will be eligible for Rs. 9 lakhs for 20 years. Additionally, you will be charged Rs. 1 lakh at regular home loan rates on the remaining loan amount for a period beyond 20 years (i.e. for the balance 10 years).

How to avail PMAY subsidy?
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If you want to claim subsidy under PMAY – affordable housing scheme; your home loan must have been approved on or after January 1, 2017, as this affordable housing scheme is valid till March 31, 2022, for EWS/LIG segments and March 31, 2020, for MIG segments only. The subsidy is given on the behalf of your loan provider; you don’t have to do it in person. To claim the subsidy, all you need to do is submit a declaration, that must confirm your eligibility by fulfilling all the criteria. Once you have successfully submitted the application, your bank or the lending institution which you’ve applied for a loan will complete all the requisite formalities and file for a subsidy on your behalf. Now, you just have to be patient, the subsidy amount will be automatically credited to your home loan account as soon as the nodal agency such as the National Housing Bank approves your application.
To conclude, PMAY has made homeownership easier and cheaper for first-time buyers.

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Beat the heat this Summer in your Residential Flats

Summer is coming and the temperature is rising along with it guess what else is rising these days? Your electricity bills! Global warming and the A.C.s that are switched on through days and nights only make it worse, which has become one of the primary causes of these extreme conditions. You might choose to pack your bags and go out to the hill to spend your entire summer in the mountain bliss. But sadly, it’s going to help neither the heat nor your pockets. Alternatively, you can look at some of these effective yet inexpensive ways to keep your residential flats cooler this summer. You can try old-school tricks to beat the heat this summer.

Use Khus
Do you remember the desert coolers you used to use in your summer vacation? No, you don’t have to go and rebuy those. Khus which is used to make the sides of the coolers naturally tends to offer coolness when wet. You can use Khus and prepare makeshift curtains for windows and doorways of your residential flat. Yes, it might be a bit of an effort to keep them wet, but it’s a brilliant way to stop the heat from entering your residential flat and it is absolutely worth it.

Dehumidify your flat
With the invention of science and technology, it has become an irreplaceable part of our lives, in summers, you will find dehumidifiers all around you. They require to be plugged in with a source of electricity and they absorb humidity and make the air fresher. We have a better idea. Instead of using dehumidifiers, you can use some indoor plants that naturally dehumidifies your flat. For example, Reed Palm, Peace Lily, or even Boston Fern will not only absorb most of the humidity stuck inside your residential flat, at the same time provide you with more oxygen.

Treat the Roof
One of the primary reasons for your residential flat to heat up is because the roof imbibes a lot of heat from the sun and warms all your rooms. However, there is a remedy to counter this. Open all the water outlets on your roof and fill it up with water. And let the sun evaporate all the water on the roof, by doing so you can have some relaxing and cool hours and mitigate the intense heat. You can paint your rooftops with soda lime or Chuna to counter the heat. The white colour will absorb less heat compared to any other colour and keep the heat at bay.

Soak the Curtains
The idea behind soaked curtains is to cool down the breeze before it enters your residential flat so that the heat it brings along with it, does not get absorbed by the walls in the house. Firstly, use cotton or mulmul drapes instead of the heavy curtains to cover your doors and windows. With a bucket full of water, soak only the ends of the cotton curtain. The breeze turns much cooler when the water seeps through the hems of the curtain.

Turn Off
The most important of it all is to do away with the use of electronics or reduce as much as you possibly can. These appliances radiate heat that gets and transmitted which harms us silently. The motor gets heated even when you open and shut the refrigerator too many times which increases the load. Let’s keep most of the switches turned off as I keep my 2 BHK flat In Gurgaon darker.
No one can ignore the effects of global warming. Hence, we must do our bit and go natural. Here’s hoping our tricks cool you this summer!
Stay Cool. Stay Healthy!

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Booming need for affordable housing in India

The term affordable housing refers to residential housing units that are affordable and reasonably priced for those who fall under economically weaker section or middle-income groups. In a developing country like India, affordable housing is a boon for those who plan to buy a house. Affordable housing can accelerate the growth of fast-increasing Indian real estate market.

If the last five years have indicated something, it is that affordable housing in India has been the biggest contributor to home sales. Whether it’s metro cities like Delhi, Bangalore, Mumbai, or smaller cities like Indore, Bhopal, etc., affordable housing demand is on the rise since the past few years.
With the basic objective of affordable housing remaining the same, sellers and builders are targeting this section of the residential market. Keeping it as a priority, governments are also launching schemes and leaving no stones unturned to meet the goal ‘Housing for all’ by 2022.

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Housing for All’ by 2022 or Pradhan Mantri Awas Yojana (PMAY) in India
Launched in 2015 by the government of India which aims to provide 20 million affordable housing units for the low and middle-income group by March 31, 2022. It has two subsets:

• Pradhan Mantri Awas Yojana (Urban) (PMAY-U) for urban areas
• Pradhan Mantri Awaas Yojana (Gramin) (PMAY-G and also PMAY-R) for the rural area

Other aspects of the scheme include Saubhagya Yojana electricity connection, clean toilet, Ujjwala Yojana LPG gas connection, Jan Dhan banking facilities, access to drinking water and more.

Need for affordable housing in India
India, being one of the most populous countries in the world and its population growing at 1.3 per cent per annum, has paucity for housing. As estimated by Economic Times, India has a shortage of nearly 4 crore houses and is constantly increasing by 1 crore houses per year. This estimate highlights the importance of housing in India.
Migration is one of the causes which has made affordable housing all the more essential, affordable homes can cater to the needs of people. Tax relaxation of up to 100 per cent for developers on building affordable housing projects has also given an impetus to build more projects under this scheme, increasing the opportunity for more people to afford their homes.

Advantages of Affordable housing
As mentioned earlier, real estate developers are given incentives in many ways by the government of India, to build more and more affordable housing units. Government is also offering home loans at a low-interest rate with increased subsidies. If you’re working and have an annual income above the criteria set by the government, you can get up to 100% home loan with up to 20 years of payback time. Not only that, but the buyers, who fall under the scheme will also only have to pay just 1% GST on the purchase of a new house.

Future of Affordable Housing
Affordable housing has the potential to expedite the growth of the Indian economy by boosting real estate marketing and infrastructure. It also offers to generate capital investment up to Rs 1-1.25 lakh crore per annum incrementally. Not only that, but it also promises to increase employability by creating 27-34 million jobs and incentivizing the growth of GDP in a significant way. The affordable housing plays a significant role in boosting India’s economic growth. Employment and Housing are two of the major sectors hindering GDP growth. Affordable housing addresses both.

Impact of Coronavirus on Housing and Real estate in India

As the world grapples with the effects of COVID-19, a virus originated from Wuhan, China, it has crossed geographical boundaries and led the world to one of the worst crises faced by humans. With 18,912 casualties, it has significantly impacted the world with countries like Spain, Italy, USA, and now India is going into nationwide lockdown. The consequences of COVID-19 are also apparent in different parts of the world like South East Asia, Middle East, Far East, Iran. The situation may get worse if the crisis isn’t managed and controlled.

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Along with China’s trade shut, tourism & retail are some of the worst-hit sectors around the world. In the middle of such a crisis, the Indian economy – which is already going through an economic slowdown and liquidity crunch – is highly unlikely to remain unharmed. With fewer people going for site visits coupled with purchasing power going downhill and low transaction volumes, the fall of real estate and housing markets is also evident.

As of now, it’s hard to gauge the long-term effect of COVID on real estate and housing markets in India. But with time it might be possible to measure what the slowdown & dwindling demand caused by delays in buying decisions might unfold.

Even before, real estate & housing have shown resistance and successfully came up from many shockwaves like GST implementation, demonetization, RERA, NBFC crisis, etc. The current crisis induced by COVID-19 is not bereft of opportunities for the sector. Many buyers and investors might start investing in this sector as real estate offers a tangible asset in contrast to stock markets.

A lot of factories around the globe are shutting down because of Coronavirus which is apparent with the collapse of import and export. China’s economic growth has been estimated up to 2.9% from 4.8%. This might be a cue for Indian export and import to fill the void in the global market. This will open doors for economic growth in the country and positively usher real estate demand.