10-Oct-2019

06-Dec-2019

10-Feb-2020

CREDAI Bengal Daily News Update | 10.02.20

WEST BENGAL NEWS

Kolkata civic body takes tax arrears burden off new flat buyers

All tax arrears have to be paid by the builder and not the buyer and second, a buyer cannot

be handed possession until the KMC issues a clearance certificate (CC) to the developer.

Kolkata Municipal Corporation (KMC) will adopt a two-pronged strategy to deal with a section

of real estate developers who flout civic rules that ultimately land flat-owners in trouble. First, all

tax arrears have to be paid by the builder and not the buyer and second, a buyer cannot be handed

possession until the KMC issues a clearance certificate (CC) to the developer.

Mayor Firhad Hakim on Saturday asked senior officials in the KMC assessment department to

ensure that under no circumstances should an apartment owner be forced to pay property tax that

has not been paid prior to registration of the flat. Instead, the land owner or project developer will

be held responsible for the outstanding property tax.

Hakim was visibly agitated when a senior citizen residing in Behala called him on Saturday and

complained of high-handedness by a section of assessment department officials who demanded

property tax shown as pending since 2017 while he had received possession of the flat in 2019.

Addressing a senior KMC assessment official present in the meeting, Hakim asked why the

department had not checked the demand notice carefully before dispatching it to the flat-owner,

who did not own the flat then, and hence, could have been a defaulter. Hakim also asked the caller

to send an application to his office seeking a remedy.

Later, Hakim said officials of the assessment department would be intimated that at the time of

issuing outstanding tax notices, they would assess the liabilities of flat-owners vis a vis the land

owners or real estate promoters. Hakim also reminded the KMC buildings department officials to

ensure that no occupancy certificate was issued from the civic body’s end till a promoter was

given a CC by the buildings department.

“A section of promoters seek occupancy certificates for selling flats without completing the

project. In such cases, the flat buyers, once given possession of flats, find that essential services

like water supply or drainage connections are pending. This is gross violation of KMC building

rules and under no circumstances we would allow this,” Hakim said.

A KMC buildings department official conceded that from now, the civic body would first compel

a promoter to apply for a CC and after proper inspection of the site, a proper occupancy certificate

would be issued. “If we are satisfied that that the building has been fully complete with all sorts

of essential services in place and there is no violation of building rules, we will issue CC to a

promoter, following which he can apply for occupancy certificate,” a senior official in the KMC

buildings department said.

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Newspaper/Online ET Realty (online)

Date February 9, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/kolkata-civic-body-takes-tax-arrears-burden-off-new-flat-buyers/74038986

OTHER NEWS

SBI cuts lending rates, housing and auto loans to be cheaper

This is good news for SBI customers as home and auto loans will be now cheaper. Besides

interest rates on loans, the top public lender in India has also slashed rates on fixed deposits.

State Bank of India has cut interest rates on loans and fixed deposits a day after the Reserve Bank

of India's (RBI) monetary policy announcement.

This is good news for SBI customers as home and auto loans will be now cheaper. Besides interest

rates on loans, the top public lender in India has also slashed rates on fixed deposits.

The state-owned bank on Friday announced a reduction in marginal cost-based lending rate

(MCLR) by five basis points or 0.05 per cent across all tenors. This will come into effect from

February 10.

It is worth mentioning that it is the ninth rate cut by SBI in the current fiscal. The one-year MCLR

has now come down to 7.85 per cent from the earlier 7.90 per cent.

While SBI's interest rate cut will benefit its customers, it is likely that interest rates on home loans

will further reduce due to the impact of delayed transmission of RBI's past rate cuts.

RBI, however, kept the repo rate unchanged in its sixth bi-monthly policy review but announced

a few measures to boost credit, which could lead to a further reduction in interest rates.

For instance, RBI temporarily removed a mandatory norm banks follow. It has removed the Cash

Reserve Ratio (CRR), requiring banks to set aside four per cent of their deposits, for retail loans

to small businesses, and housing and auto loans till July 31, 2020.

It also indicated that loans sanctioned by banks to medium and small-scale enterprises (MSMEs)

will be linked to an external benchmark from April 1, 2020. This will make lending rates cheaper

for small businesses.

The central bank also plans to long-term repo operations to enable better transmission of monetary

policy. RBI plans to conduct one-year and three-year term repo auctions for injecting additional

liquidity to the tune of Rs 1 lakh crore into the banking system.

This will help banks in raising money at lower rates and also help in increasing key lending

activities to various sectors.

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Newspaper/Online India Today (online)

Date February 7, 2020

Link https://www.indiatoday.in/business/story/sbi-cuts-lending-rates-housing-and-auto-loans-to-be-cheaper-1644116-2020-02-07

Delhi station's redevelopment plan to make 2.5 million sqft

commercial space available

RLDA expects a total investment of Rs 7,000 crore, of which Rs 4,500 crore will be

mandatorily spent on the redevelopment of station and offices related with the railway

functioning.

The iconic Connaught Place in Delhi will soon have 2.5 million sq ft of new commercial real

estate, courtesy the Indian Railways, reports Faizan Haidar. The Rail Land Development

Authority (RLDA) plans to redevelop the New Delhi Railway Station, which will free up the

sprawling piece of land in the middle of India’s most expensive commercial hub.

RLDA, under the railways ministry, is the statutory authority for development of vacant railway

land for commerical use.

The entire area which will be developed is around 8 million sq ft, of which the selected developer

will be allowed to exploit 2.5 million sq ft for commercial purpose,” said Ved Parkash Dudeja,

vice chairman of RLDA.

“The project will be funded through money generated by commercial development.”

RLDA expects a total investment of Rs 7,000 crore, of which Rs 4,500 crore will be mandatorily

spent on the redevelopment of station and offices related with the railway functioning.

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Newspaper/Online India Today (online)

Date February 8, 2020

Link https://realty.economictimes.indiatimes.com/news/commercial/delhi-stations-redevelopment-plan-to-make-2-5-million-sq-ft-commercial-space-available/74027147

Ahmedabad civic body sells two commercial plots for Rs 92 crore

AMC which aimed to raise more than Rs 700 crore through the e-auctioning of five plots in

the city, managed to raise just Rs 306 crore, as two plots on offer had no takers

AMC which aimed to raise more than Rs 700 crore through the e-auctioning of five plots in the

city, managed to raise just Rs 306 crore, as two plots on offer had no takers.

On Friday, the civic body auctioned off two plots, one on Sola Road and another in Nikol.

The Sola Road plot was sold to Avenue Supermarkets, of Thane, which operates the D-Mart

brand. It bid Rs 64.69 crore or Rs 1.08 lakh per sq m, against the base price of Rs 51.37 crore or

Rs 86,000 per sq m. The plot in Nikol was auctioned to A V Builders for Rs 28.23 crore or Rs

77,700 per sq m, against the base price of Rs 20.75 crore or Rs 57,120 per sq m.

Two plots went unsold at e-auctions on Friday. A 13,222 sq m plot off the posh Sindhu Bhavan

Road, — where commercial plots have sold for prices between Rs 1.7 lakh and Rs 2.5 lakh per

sq m last year — did not get any bids.

Bidders were online, but remained inactive as the AMC set a base price of Rs 1.59 lakh per sq.

m. A 15,351 sq m plot on Science City Road offered at a base price of Rs 1.59 lakh per sq m also

did not find takers.

On Thursday, a plot in Bodakdev was auctioned for Rs 213 crore.

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Newspaper/Online India Today (online)

Date February 8, 2020

Link https://realty.economictimes.indiatimes.com/news/commercial/ahmedabad-civic-body-sells-two-commercial-plots-for-rs-92-crore/74027300

Mumbai: Depressed rentals, high civic taxes hit luxe flat investors

Investors who bought luxury apartments, hoping property prices would appreciate and

they would earn fabulous rents, now face a harsh reality. Not only have prices stagnated or

dropped, but rental incomes from such flats are low.

Investors who bought luxury apartments, hoping property prices would appreciate and they

would earn fabulous rents, now face a harsh reality. Not only have prices stagnated or dropped,

but rental incomes from such flats are low.

A glut of high-end apartments, mainly in central Mumbai, has left tenants with a wide choice of

properties to choose from. As a result, rents for large apartments have crashed by 20%, and in

some cases up to 30% and more.

In new buildings, high outgoings and maintenance charges, added with tax on rental income, have

left owners with little in hand. A developer cited the example of a Rs 5-crore apartment, which

currently fetches a rent of Rs 1 lakh a month. “But after deducting the outgoings and 22% tax on

rental income, the owner gets a measly Rs 56,000 in hand. The yield is barely over 1% annually

on such an expensive property,” he said.

“It’s true. Home owners who have leased big apartments are left with little in hand,” said Pranay

Vakil, chairman of Praron Consultancy.

To create demand for rental housing, leading developers have set up separate cells within their

organisations to cater to leave-and-licence demand for flats bought by their investors. They have

even drawn up standard agreements that can be quickly signed by someone who wants to move

Newspaper/Online India Today (online)

Date February 10, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/mumbai-depressed-rentals-high-civic-taxes-hit-luxe-flat-investors/74054359

in quickly, saving on expenses on lawyers.

Massive inventory makes luxe rentals go for discount

A property broker from central Mumbai said a lot of supply has come into the market in this area,

which has also affected the older gated communities. According to him, property prices in the

area have come down by 20%.

Owners, discouraged from selling, prefer to give a flat on rent. “For a Rs 4-crore apartment in

central Mumbai, that earlier would fetch Rs 1.5 lakh a month, today commands a little over a lakh

a month—a 33% drop,” he said.

The rate of rental return doesn’t change much with area or property type. The broker said a 5BHK

flat worth Rs 20 crore in a new project in Worli fetches the owner a monthly rental of Rs 4.5 lakh.

“But, after deducting taxes and outgoings, he gets barely Rs 2 lakh in hand a month,” he said.

A property consultant operating in the western suburbs said deluxe 4 and 5BHK apartments in

Bandra-Khar once commanded rentals of Rs 5-7 lakh a month. These are now down in the region

of Rs 3.3 lakh a month. “However, 1-2BHK flats are in demand and their owners are earning

good rentals (as a proportion of costs) in Bandra-Khar,” he said.

The rental market has been under pressure for the past two or three years, said Pankaj Kapoor of

Liases Foras, a real estate data and analytics firm. “Rental supply has increased and a huge

inventory is available, but bigger flats are going at a discounted rate,” he said. From Lower Parel

to Bandra, large flats are lying empty and owners are compelled to rent them out at cheaper rates,

said Kapoor.

Ritesh Mehta, senior director and head of residential services (development initiatives) at JLL

India, said the residential leasing market in Mumbai has predominantly remained stagnant for

two years at most locations.

“A few exceptions have been locations closer to work and commercial hubs: BKC, Goregaon,

Lower Parel and Airoli have seen escalation of rentals by 3-5% year on year. Average rentals in

Mumbai have been 1.7-2% of the capital value of a property.”

While owners rue investing in what has turned out to be a bad rental market for them, the situation

couldn’t possibly be better for tenants. In this zero-sum game, the rentier’s loss is the renter’s

gain.

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Chandigarh: Four more bidders want railway commercial area

project

IRSDC managing director and chief executive officer S K Lohia said the four bidders gave

their presentations on the project in Chandigarh on Friday, but the final call is yet to be

taken by the authorities.

Four more builders have shown interest in Indian Railway Stations Development Corporation

Limited’s (IRSDC) project of developing the 25 lakh square feet commercial area at

the Chandigarh railway station.

IRSDC managing director and chief executive officer S K Lohia said the four bidders gave their

presentations on the project in Chandigarh on Friday, but the final call is yet to be taken by the

authorities.

He said the IRSDC will utilise the revenue generated from the land monetisation project on the

development of the Chandigarh railway station.

Earlier, seven bidders had applied for the project and now four more have shown interest in the

development of the commercial sites.

The railway station has 493.6 acres of land in the city which comprises the station building area,

residential and open land.

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Newspaper/Online India Today (online)

Date February 8, 2020

Link https://realty.economictimes.indiatimes.com/news/commercial/chandigarh-four-more-bidders-want-railway-commercial-area-project/74027273

Bhubaneswar civic body sets up portal to get rid of construction

waste

Anyone can access the website and let the BMC know about the location of the waste and

the agency who has undertaken the work.

The Bhubaneswar Municipal Corporation (BMC) will develop a web portal that will display the

progress of construction work and provide detailed information on the waste left behind by

various departments.

The idea behind creating the web portal — which will contain the details of construction work

under different departments — is to fix responsibility with the department that generates

construction and demolition (C&D) waste and leaves them unattended along the road. Anyone

can access the website and let the BMC know about the location of the waste and the agency who

has undertaken the work. It will help the residents, the BMC and government departments.

BMC officials said people always approached the corporation for removing C&D waste without

having any information about the agency that generated it. They added that the BMC always

removed the waste (irrespective of the department generating it) to avoid inconveniencing the

people.

BMC deputy commissioner (sanitation) Subhendu Sahu said the website would be accessible to

all departments that take up construction work under the BMC’s jurisdiction. “It will function

like a grievance redress platform. Residents can let the BMC know where the waste is being

dumped. The BMC will draw the attention of the department concerned to the complaint on the

same portal,” Sahu added. He further said, “In case an agency expresses inability to lift the waste,

it will have to pay transportation fee to the BMC, which will act on its behalf. Every

communication will be recorded on the portal.”

Though the BMC’s C&D waste management rules came into effect in 2016, they are not strictly

enforced. The civic body had earlier launched a drive to seize waste and fine people for dumping

it in public places, but it is yet to come up with a strategy if the waste is generated by a government

department.

BMC commissioner Prem Chandra Chaudhury said most roads in the city belonged to the works

department. “Any waste generated after construction of a road under the works department should

be handled by them,” he added.

“There are multiple agencies involved in various works in the city such as digging earth for laying

cables. In such a case, the road-owning department should be paid to remove waste by the agency

or the department laying cables. The same should be intimated to the BMC for better

Newspaper/Online India Today (online)

Date February 9, 2020

Link https://realty.economictimes.indiatimes.com/news/technology/bhubaneswar-civic-body-sets-up-portal-to-get-rid-of-construction-waste/74047816

coordination,” Chaudhury said.

The waste generated through construction, repair, re-modelling and demolition of private and

government establishments, households, roads and drains, should be handled carefully to avoid

littering. If abandoned, it encroaches on road and makes the city ugly. It also causes accidents.

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Aurangabad civic body proposes 25% increase in property tax

Incidentally, the AMC administration has been criticised for its poor tax recovery

The Aurangabad Municipal Corporation (AMC) has tabled a proposal before the standing

committee that the property tax be increased by 25%.

According to the AMC administration, there has been no increase in the property tax since 2012-

2013. The proposal was placed before the standing committee meeting on Friday, but since the

meeting ended without any discussion, the proposal will now be taken up in the next meeting of

the panel.

Incidentally, the AMC administration has been criticised for its poor tax recovery. The civic

administration was asked to ensure good tax recovery by deputy chief minister Ajit Pawar during

his recent visit to the city. On January 9, state chief secretary Ajoy Mehta had asked the AMC

administration to ensure that its recovery is improved.

However, with the AMC general elections scheduled for April, the standing committee is in a fix

over approving the tax hike. The increase in taxes would invite discontent from voters.

Meanwhile, in the current financial year, the AMC has collected 45% of the target set for property

tax collection. On Friday, AMC tax officer Karan Chavan said property tax collection of Rs 95.88

crore has been done till now, as against a target of Rs 211 crore. The collection is 8.37% more

than previous year.

“The AMC has collected Rs 20.47 crore towards water tax. As the data was not available for

water consumers, no target was set for water tax collection,” Chavan said.

Talking about the measures taken to improve the tax recovery over the next one month, Chavan

said the drive to increase property tax recovery from commercial properties, the process of

printing bills based on the water consumer data has begun and dhol tasha squads are working to

encourage recovery from major defaulters in each ward.

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Newspaper/Online India Today (online)

Date February 8, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/aurangabad-civic-body-proposes-25-increase-in-property-tax/74027344

Dehradun civic body to fine residents who don't pay property tax

by Mar 31

The officials added that if the residents fail to pay their property taxes by the set deadline,

a penalty of up to Rs 15,000 is likely to be imposed.

The Dehradun Municipal Corporation has said that it will penalise residents who

don’t pay their property tax by March 31. Officials of the corporation said that

residents living in the old wards of the city must pay residential and commercial

property taxes by the end of March and those living in 32 new wards of the city

should pay the tax of any commercial property that they own there by the same date.

The officials added that if the residents fail to pay their property taxes by the set

deadline, a penalty of up to Rs 15,000 is likely to be imposed. DMC officials also

pointed out that very few residents of the new wards have paid commercial property

tax so far.

“Out of over 14,000 commercial properties in the 32 new wards, owners of only 300

such properties have paid their property taxes in this fiscal. To encourage tax payers,

the DMC is also giving 20% rebate to all city residents who submit their property tax

by February 15,” said an official of the civic body. The officials of the civic body have

confirmed that the last date for availing this rebate won’t be extended any further.

Last date to avail the 20% rebate was earlier revised from January 15 to February

15.

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Newspaper/Online India Today (online)

Date February 9, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/dehradun-civic-body-to-fine-residents-who-dont-pay-property-tax-by-mar-31/74039018

Kolhapur: Citizens asked to provide info on rented properties

Officials from the property tax department said that many owners had been evading taxes

on their rented properties for several years.

Officials of the civic administration have appealed to citizens to come forward and render

information about the rented properties in their localities on the assurance that their identities

would remain confidential.

Several discrepancies have been reported in the property tax collection. Officials from the

property tax department said that many owners had been evading taxes on their rented properties

for several years. Complaints have poured in from several quarters stating that the evasion was

taking place at the behest of property tax officials. Recently, a couple of rented properties were

found, for which property tax assessed was much less than the actual tax.

Senior officials from the property tax department said that since there was a nexus between the

local authorities and the property owners, it was difficult to find out the actual number of rented

properties and that only the information from citizens could be relied upon.

Chief superintendent of the property tax department Sanjay Bhosale said, “We have appealed to

the citizens to provide details of the rented properties in their localities. Owners may rent out

properties for commercial or residential purposes. Many times, owners hide the details of their

rented properties. We have observed that such properties are registered differently in our system.

As of now, we have received the details of over 60 rented properties from citizens and we are

randomly scrutinising by visiting these properties.”

Sources in the civic administration said that if unearthed properly, a huge scam may likely surface

from the property tax department.

“A couple of years ago, a firm that was roped in to identify and register new properties in the city

also came under scanner. Many activists and corporators had raised allegations stating that the

surveyors of the firm were bribed by owners to either not register their rented properties or tax

them with lesser assessment,” said souces in the civic administration.

Meanwhile, municipal commissioner Mallinath Kalshetti decided to transfer some staff from

other departments to the property tax department on Saturday and initiated the recovery of

property tax. A team of officials will be set up at the divisional-ward level for sealing properties,

which have not paid tax for several years.

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Newspaper/Online India Today (online)

Date February 9, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/kolhapur-citizens-asked-to-provide-info-on-rented-properties/74039116

Buyers approach parliamentary committee against insolvency code

amendment

In December 2019, the government had passed an ordinance to amend the code, with the

result that a threshold of minimum 100 homebuyers or 10% of total homebuyers in a

project, whichever is less, is required to take the builder to an insolvency court.

The Forum for People’s Collective Efforts (FPCE), a national lobby of homebuyers, has

approached the Jayant Sinha-headed parliamentary standing committee on finance with its

objection to a proposed amendment to the Insolvency and Bankruptcy Code (IBC), 2016. The

second amendment to the bill was presented in the Lok Sabha in the winter session.

The proposed amendment requires a minimum threshold of homebuyers to come together in order

to initiate proceedings under the IBC against an errant builder. In December 2019, the government

had passed an ordinance to amend the code, with the result that a threshold of minimum 100

homebuyers or 10% of total homebuyers in a project, whichever is less, is required to take the

builder to an insolvency court.

“This is against the interest of homebuyers as it puts unreasonable conditions on them, destroys

level playing field which currently exists and makes the law lopsided in favour of real estate

developers. The amendment being brought under influence of builders is not only illogical, illegal

but also regressive to say the least,” said FPCE’s letter to the standing committee chairman.

The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019, which proposes to amend

the code, was referred to the standing committee on Finance after it was introduced in Parliament

in December. The Lok Sabha referred the second amendment bill to the standing committee on

December 23 and the committee is expected to submit its report before the Lok Sabha within

three months.

In in its letter, the FPCE also highlighted that the corporate affairs ministry had also proposed

these amendments without giving an opportunity of hearing to homebuyers who are important

stakeholders and are directly impacted by the proposed amendments. ET has seen a copy of the

letter.

The FPCE highlighted that through an earlier amendment the government provided homebuyers

the status of financial creditors in order to empower them to be part of the Committee of Creditors

(CoC). However, builders had challenged the constitutional validity of that amendment before

the Supreme Court. The court held the government’s stance to be constitutional and rejected the

developers’ plea.

In this matter, the builders had made a suggestion before the court for introducing a minimum

Newspaper/Online India Today (online)

Date February 10, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/buyers-approach-parliamentary-committee-against-insolvency-code-amendment/74054305

threshold for homebuyers to initiate proceedings under the IBC against them but that was not

accepted by the court. Hence, the matter of minimum threshold has already been rejected by the

apex court and it should not be inserted by the legislature which will only be seen as a

confrontation with the judiciary just to please the developers, said the letter.

“It is important to state that the main reason behind such demands of builders is because they are

not inclined to mend their ways and wish to continue with their unethical, wrong and illegal

practices to cheat and dupe homebuyers. Thus, they are making an all-out effort to frustrate the

rights of homebuyers which were made available by the government by amending the IBC and

subsequently seconded by the Supreme Court,” said Abhay Upadhyay, president, FPCE.

According to the FPCE, the proposed amendments have been proposed by real estate developers

and their association, the National Real Estate Development Council, which has even taken public

credit that the proposed amendments and insertions in the IBC were being made at its

recommendation.

The amendment to insert a minimum threshold for homebuyers to approach the NCLT is ridden

with practical difficulties and is unimplementable, said the letter. “Sale is a continuous process.

How will a homebuyer know how many units have been sold to determine the 10% of total

number of units sold in real estate project specially in a situation when 10% is less than 100?” the

FPCE said in the letter.

Besides, there are chances that the developer would make an attempt to break away some of the

homebuyers to ensure that before the application is admitted by the National Company Law

Tribunal the threshold is not met and the case is dismissed.

The homebuyers’ body has requested the committee to consider its reasoning for the objection

and ensure that such amendments against homebuyers are removed from the amendment bill

before it is passed by Parliament. It has sought an appointment for its pan-India delegation to

depose before the committee and present the view of homebuyers.

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