Ravi Karandeekar's Pune Real Estate Investment Blog

How to Recover Money Lost in Proposed N A Plots

2013-05-11T18:13:00.000+05:30

Ponzi Schemes in Pune:

The other day I attended a meeting of investors duped by Nitin Rajaram Narke of Blue Chip Corporation / Investment. Frustrated investors had invited Mr. Vijay Sagar, Ms. Seema Bhakare & Ms. Veena Dixit of Grahak Margadarshan Kendra - Consumer Guidance Center - of Akhil Bhartiya Grahak Panchayat Pune to guide them to recover money lost in the ponzi scheme.

Pretending that he earns huge profits in the share market, Nitin Narke lured thousands of naive investors in Pune. He promised them to give 10 per cent returns per month - in cash - if they invest in the share market through him. Tempted to earn easy money every month, thousands of investors gave thousands of crores to Narke. Only against the security of a postdated cheque.

For the first few months, Narke went on giving 10 per cent returns. Those who received cash, brought in their friends, relatives, colleagues, and coworkers. However, suddenly Narke stopped giving monthly returns. Investors got upset. They deposited his security cheques in their banks. Narke's cheques bounced. Investors panicked. Ransacked his office. Lodged police complaint. Police caught him at his office in Magarpatta. But Narke got out on bail. Started running his business as if nothing has happened.

Helpless investors joined hands. Started meeting regularly. Went on trying all possible ways to recover their money. Even approached SEBI. Which refused to interfere in the matter conducted under the name of a different company. Investors had lost face. Some lost faith and committed suicide. Others went on living. Avoiding to face their near & dear ones. Looking at Nitin Narke moving around in his fancy SUV.

"How can someone believe in 10 per cent per month returns?," I asked Mr. Vijay Sagar.

"Same way you believe in Proposed N A Plots," said Mr. Vijay Sagar.

"Isn't it financially & practically impossible to get such high returns in share market?," I asked.

"Still you invest in property - as if the builder's real business is to make you rich," said Mr. Sagar.

"But isn't it risky to give your hard earned money against the postdated cheque?," I asked.

"Are the clauses in the flat agreement to protect you or the builder?," said Sagar and added that,"At this point of time, there is no point in talking about ponzi scheme. Let us focus on how to recover money lost in ponzi scheme"

The first step is, to collect data of all duped investors. Then let us form a task force to lead the campaign. Mr. Sagar went on explaining the strategy to recover money. And I realized why Vijay Sagar invited me for this meeting. Scams may be different but the ways to recover your lost money are the same. Today it is about investing in share market. Tomorrow it will be about investing in proposed N A Plot!

Yesterday, I read Mr. Vijay Kumbhar's blog on chit fund scams. Mr. Kumbhar has held government agencies responsible for these ponzi schemes. When I talked to Mr. Kumbhar about 'Proposed N A Plots Schemes in & around Pune', he said that the government agencies' negligence becomes protection for those who sell agriculture land to investors. Naive investors don't realize that it's a "scam". Not an investment offer!

"Government agencies negligence or reluctance to stop - is taken as recognition - and investors believe that at some point of time this agricultural land will be converted to Non Agriculture - N A. Not only that - the land developers announce that - soon - the government is going to change the present agriculture zone into residential zone - still the government agencies keep mum! Now, tell me, who is responsible for these Proposed N A Plots Scams?," said Mr. Kumbhar.

"OK. Let us assume that from tomorrow government agencies stop ignoring Proposed N A Plots Schemes. Then what will happen?," I asked.

"The court will cancel all 'documents' of Proposed N A Plots Schemes - because -
1 - In Maharashtra, only a farmer can buy agriculture land.
2 - You can not divide agriculture land into small portions - pieces - into 1,000 - 2,000 - 3,000 sq.ft. plots!," said Mr. Kumbhar.

"And - as predicted by the developer - let us assume - down the line - the zone becomes residential and land gets N A Order - then what will happen?," I asked.

"Then 2 things can happen.
1 - the original land owner will bring stay order on the scheme from the court - alleging that the developer has committed some fraud - the documents were forged or something like that - it happens all the time - we read these news items every day.
2 - at gun point - the developer will force all investors to surrender their plots - of course, against non negotiable - fixed compensation - to some builder - that's how the land was procured for the schemes in Wakad, Baner & Balewadi - we all know!," said Mr. Kumbhar.

"It means that - from today itself - the investors should start considering - how to recover money lost in proposed N A Plots schemes!," I said.

What say you?
Are you going to wait till you are officially duped or
trying to get your money back today?
Please, share your plan in the comments.

Whatever may be your decision, please, save this contact information now -

Grahak Margadarshan Kendra
(Free Consumer Guidance Center)
Akhil Bhartiya Grahak Panchayat Pune

Vedshastrotejak Sabha,
opposite Hotel Kalpana and Hotel Vishwa,
near Sarasbaug, Pune 411 030.

Monday & Wednesday
1730 to 1930

Advisers:

Vilas Lele - 9823132172

Seema Bhakre - 9860368123

Vijay Sagar - 9422502315

Thaksen Pore - 9850525276

Veena Dixit - 9819660991

Srikant Joshi - 9850059020

View Grahak Margadarshan Kendra (Free Consumer Guidance Center) Akhil Bhartiya Grahak Panchayat Pune in a larger map

Feel free to call me:

I enjoy talking, sharing my views and giving advice about buying property in Pune real estate market (so, i do not charge anything for the first 3 minutes!) Call 919860044110

If you like to chat, join me, RaviKarandeekarsBlogs on Google Talk.

Yes, my email id is RaviKarandeekar@RaviKarandeekar.com Feel free to write to me. I reply as soon as i can.

Join me on Google+

What is Possession Letter, Occupation Certificate and Completion Certificate?

2013-02-17T08:09:00.000+05:30

Which Are Required for IT Exemption?

Mr. Rahul Gandhi purchased a ready possession flat from a builder at Kharadi Pune.
After receiving the entire payment, in January, the builder gave possession of the flat to Rahul.
But, at the time of handing over the flat, builder did not give "possession letter" to Rahul.
Rahul & Priyanka also didn't mind and shifted to their new flat.

As promised, the builder gave possession letter of his flat to Rahul in the next month - February.
To get Income Tax benefit, Rahul submitted the builder's possession letter to accounts department of his company.
Looking at the builder's possession letter, the accounts department asked Rahul, "Where is the Completion & Occupation Certificate?"
Shocked Rahul asked, "What is Completion & Occupation Certificate? My builder only gave me - this possession letter!"
"Only possession letter is not enough. To get income tax benefit - you must submit - Completion & Occupation Certificate too," returning the papers accountant said.

Disappointed & frustrated Rahul went back to his office and started asking his colleagues, "What is Possession Letter, Occupancy Certificate, Completion Certificate? Are all these required for IT?"
If you know the answer, please, help Rahul.
Share your knowledge & experiences in the comments!

Feel free to call me:

Pre-launch offers are illegal

2013-02-06T08:02:00.000+05:30

Pre-launch offer is bluffing & cheating:

Several developers are coming out with pre-launch offers through advertisements and special invitations. However, according to experts this is completely illegal as developers are selling apartments even before the grant of the licence to develop the property.

"It (pre-launch offers) is a big zero. Pre-launch offers are 100% illegal. Unless you pass the plan (for the building) you cannot allocate flat or apartment number to a buyer. And several developers are found doing the same,” said advocate Vinod Sampat. Read More

1) Baap ka maal

"Or We Will Cancel Your Booking!"

2012-01-30T13:06:00.001+05:30

I am in a dilemma.
In case of cancellation of booking, i am going to lose a big part of my booking amount. Which i can't afford.
If I accept my builder's demand - today,
i don't know what i have to accept - tomorrow
- compromise in quality of construction, delay in possession, completion certificate, society formation, conveyance deed....
What should i do? Please, suggest...

Should I pay my 20 per cent own contribution to the builder - even if, the project is not yet approved by my bank? In fact - not yet approved by any bank!

When i booked the flat, i was told that in the next 30 days - i have to pay my own contribution. Certainly, I agreed to pay and sign the agreement.

When I went to the builder's office to pay my own contribution, I asked whether the project is approved by my bank. The builder said - No. He hasn't yet submitted his file to my bank. In the next week, he will submit it.

Is it approved by any other bank? - I asked.
Builder said not yet - we are in the process of submitting our files to all banks.

When not a single bank has approved the project - how can i believe that there is no legal issue about this project? - I asked the builder.
You are free to believe or not to believe - that is not our concern - you must pay your own contribution in the next 2 days - the builder said.

And what about the agreement? - I asked.
We are starting the process of registration of agreement - the builder said.

Am i supposed to sign the agreement before my bank approves the project? - i asked.
Why not? - Do you know how much time your bank will take to approve my project? - the builder asked.
No. I don't know. I am buying a home for the first time. But you should know. You are the 'builder'. You should tell me. Guide me. Give me time till my bank approves the project. In fact, you should first get your project approved by my bank and then tell me to pay my own contribution and register the agreement. In that case, i would have felt safe to pay my own contribution and to sign the agreement too - I said.

Why are you feeling unsafe? Don't you trust me? - the builder asked.

Trust! You can ask the same question to the bank and get your project sanctioned! - i said.

Banks trust me. But, there is a process - time taking legal process for the approval - if, you don't want to sign and register the agreement - before the project is approved by your bank - i don't have any issues - I am ready to wait - but, you have to pay your own contribution in the next 2 days - the builder said.

If you are ready to wait to sign the agreement - why are you insisting on 2 days? I will pay my own contribution on the day my bank approves the project! - i said.

Because, while booking - you have agreed to pay your own contribution in the next 30 days - the builder said.

But, at the time of booking, you have told me that - you have submitted the file and - in a month's time - the project will be approved by the bank. But, you haven't yet submitted the file - Now, it will take more time - so, don't ask for own contribution - wait for the approval - i said.

Who are you to tell me to wait? - the builder said.

I am your customer - i am requesting you - why are you getting angry? - i said.

I go by my rules. If you want this flat - you have to follow my rules. You have to pay your own contribution in the next 2 days - or we will cancel your booking - the builder said.

I am in a dilemma. I am feeling insecure. The builder's demand is not logical. The builder is arrogant and unreasonable.

In case of cancellation of booking, i am going to lose a big part of my booking amount. Which i can't afford.

If I accept my builder's demand - today, i don't know what i have to accept - tomorrow - compromise in quality of construction, delay in possession, completion certificate, society formation, conveyance deed.

I have to deal with this builder on his terms for the next 4 - 5 years. In this transaction - i will never have any say. It's insulting. Unethical. Illogical.

The builder's terms are wrong. Because I pay in advance this builder can construct the project. I am the paymaster. Actually, i should dictate the terms. Not the builder.

I don't know whether the builder's terms would be against me or not - but, for sure, the builder has no concern about my interest.

What should i do? Should i pay my own contribution or cancel the booking? Please, suggest in the comments.

High Property Prices - Why does Government give a free hand?

2011-09-09T11:53:00.000+05:30

Tax Cow:

Builders play important role in helping the politicians rule the land. No. I am not talking about "Politicians & Builders Nexus" or bribes, election funds and assistance to convert "loot of taxpayers' money" into white.

I am talking about the "official" business transaction, give & take, between the builders & the men in power - government!

I am talking about - government's "cut" in the property price!

You know what? When a builder charges you Rs. 3,300 per sq.ft., the government's "cut" is, approximately, Rs. 1,087 per sq.ft. - nearly, 33%!

If, the government is 33% partner in real estate sector,
how can we expect government to control the property rates?
How can we expect government to increase 'supply of land'?

How can builders' government take any step which will make housing affordable for the urban middle class?

We have to remember that we are the 'minority' and only "tax cow" for the government.

Stamp Duty, Registration Charges, VAT & Service Tax:

We all know only about what we pay to the government when we register the agreement of our property. Stamp Duty 5% + Registration Charges Rs. 30,000 + Service Tax 2.57 % + VAT 1% = Approximately Rs. 313 per sq.ft. to the government.

"Ravi, that's not all what the government gets from every flat sold!," said Mr. Kapil Gandhi, M. D., Sigma One Landmarks Pvt. Ltd., developers of Grand Stand Kothrud and told me what government gets from the builder.

Let us assume that the 2,00,000 sq.ft. project - 11 story buildings with standard specifications & amenities - is in the D Zone, and the property rate, based on the saleable area, is Rs. 3,300 per sq.ft.

"Besides what you pay, while constructing this project, builder pays to local, state & central government, approximately Rs. 774 per sq.ft. on the saleable area!," said Mr. Kapil Gandhi and gave me the following bifurcation, based on per sq.ft. saleable area:

1) Stamp Duty on Purchase of Land - Rs. 60
2) Registration Charges for above Land - Rs. 14
3) Revenue Matters - Rs. 15
4) NA Charges - Rs. 5
5) PMC Charges & Premiums - Rs. 285
6) Octroi on Materials - Rs. 44
7) MSEB Charges - Rs. 20
8) Environment Clearance Charges - Rs. 10
9) VAT on Construction Materials - Rs. 86
10) Service Tax on Construction Labor - Rs. 57
11) Excise on Construction Materials - Rs. 111
12) Service Tax on Consultants' Fees - Rs. 10
13) Mortgage Stamp Duty on Project Loan (25% of Construction Cost) - Rs. 4
14) Property Tax on Plot for 4 Years - Rs. 12
15) Service Tax on Marketing & Promotion - Rs. 5
16) Premium on Road & Amenity Space - Rs. 38

Animal Farm:

Dear Tax Cows, now you know, why government gives free hand to the builders to abuse & exploit the property buyers and earn huge profits - sometimes, without any 'income tax on the profits'!

On our Animal Farm, builders & politicians are more equal than others and terrorist vultures are special guests!

Feel free to call me:

I enjoy talking, sharing my views and giving advice about buying property in Pune real estate market (so, i do not charge anything for the first 3 minutes!) Call +919860044110

If you like to chat, join me, RaviKarandeekarsBlogs on Google Talk.

Yes, my email id is RaviKarandeekarsBlogs@gmail.com Feel free to write. I reply as soon as i can.

Join me on Google Buzz at
http://www.google.com/profiles/ravi.karandeekar

Subscribe for Free!

To receive free emails or free RSS feeds, please, subscribe to Ravi Karandeekar's Pune Real Estate Investment Blog

For my blogs on real estate projects near Hinjewadi, real estate investment, advertising and other related topics, please, visit and join my Ravi Karandeekar's Pune Real Estate Blog Group

An Agreement to be a Slave of a Builder

2011-08-29T11:51:00.002+05:30

Die for a Politician & Live for a Builder:

I am Anna!

Anna Hazare's movement for the Jan Lokpal Bill has proved that we can do more than what we are supposed to do - die. Die for a motherland and let the men in power live a long life.

For the first time, we found a leader, Anna Hazare, who was ready to die for us. So, that we can have a 'say' and live a respectable life.

What politicians had to accept, for sure, builders can't refuse. Like politicians, the builders have to accept that we, the property buyers, are the masters.

Now, builders have to stop exploitative abuse. Builders can't go on exploiting us, anymore. Builders can't take disadvantage of their collective dominant position as the only source of housing to abuse property buyers.

Now, we have realized that we can do more than just be a victim & react. Become a victim of recession - job uncertainty - home loan interest rates and react by not booking property. Like we did in 2008 World Financial Crisis.

Anna Hazare's movement has empowered us to be assertive, become proactive (Hinjewadi First!) and change the rules set by the builders.

Like Anna Hazare's movement against corruption, for sure, we have to take effective and collective stand.

We have to stop booking and start buying ready possession flats, certainly, with an occupation certificate from PMC / PCMC. Because, "booking a flat at the pre-launch / launch and under construction stage" is the root of the problem.

By signing an agreement of property, we give power to the builder to dominate, abuse and exploit us.

By signing an agreement of property, we become a slave of the builder and the bank.

We are left with no choice but to borrow from banks at heavy interest rates and fund the builders without any interest.

We are forced to pay rent to our landlord, as well as, pre-EMI (pure interest) to the bank and left with no option but to beg for the possession of our flat.

We are compelled to take illegal possession of our flats & live in incomplete projects.

What we get for offering interest free funds to the builder whom bank is not ready to finance?

We are just left with enough to survive for a month and see that for the next 20 years we live, earn, work only for the builder and his bank!

Real Estate Regulation Bill:

Like Lokpal Bill, Real Estate Regulation Bill is also lying with the Parliament. Not for 64 years but from 2007. Parliament was supposed to pass it in this monsoon session! Obviously, Real Estate Regulation Bill is as lame as the government's Lokpal Bill!! Because, as much as politicians, builders also believe that they are 'supreme' and are born to 'rule' the property buyers.

Anyways, Real Estate Regulation Bill is not a solution to a problem. The Bill is not interested in eradication of slavery. The Bill is not against the root of the problem - booking a flat. The Bill only tells the builders how they should treat the slaves, the property buyers.

So, point is, we don't want a better treatment. We want freedom. Freedom from the slavery. Which we can get only if we stop booking and start buying ready possession flats. Amen!

Feel free to call me:

Subscribe for Free!

An Agreement of Your Flat - It's not a "Sale Agreement", Baby!

2011-08-24T09:37:00.006+05:30

An agreement of your flat is a 'sugar teat'...keep on sucking till you get possession, baby!

NATUR-Kautschuk-Schnuller GOLDI(http://goo.gl/PBcVt)

Help! Wanted SuperNanny!!:

On the day "Competition Commission of India (CCI)" fined DLF Rs. 630 crore, everybody realized that the property agreements are one-sided - completely in the favor of builders. With these agreements - builders brutally disregard consumer rights and indulge in 'unfair' trade practices!

In it's editorial The Economic Times cried- "To end an unequal relationship between the property buyers and builders - Indian real estate needs a regulator". A Super-Nanny - to take care of the innocent babies!

Innocent babies who have bought the builders' day dreams. Innocent babies who had ignored the disclaimer printed on the brochure and had payed for the fairy tale as if it's a legal offering.

"Agreement to Sell" & "Agreement to Sale"

We all know that 'booking a flat' is just a fantasy. Popularized by the banks and builders to earn huge profits. Property agreement is presented as if - "the goods" are transferred from the seller to the buyer. As if - a builder hand overs a 2 BHK Flat to a home buyer for a price!

Except the property buyer who has booked a flat, we all know that reality is - the property is not yet ready. In the next 30 months a builder is going to construct it. Obviously, the agreement between a builder and a property buyer is not "Sale Agreement". It is not absolute.

In the simple terms - a property agreement is just a pure and simple contract between a builder and a property buyer. By signing the contract - the property buyer only establishes his claim and a builder agrees. It means that it is "Agreement to Sell." Actual sale - exchange of goods against a full and final payment will take place when the flat is ready.

Till that happens the seller - the builder - remains the owner of the property. Obviously, the builder tries his best to protect himself against all odds he has to face in the long construction period and sets favorable terms in "Agreement to Sell".

Fantasy & Reality:

Developers in Maharashtra, one of the biggest realty markets in India, said since agreements are drafted as in the Maharashtra Ownership of Flats Act, there is very little scope of exploitating buyers.

“Basically, there is a standard agreement described by the Act. Therefore, there cannot be violation which can come under the purview of CCI. It is mandatory to follow the Act,” said Lalit Kumar Jain, national president, Confederation of Real Estate Developers Association of India.

Fact of the matter is, this "Agreement to Sell" is useful only to a builder and a bank. For a builder - agreement is a source of money. For a bank, a agreement is an excuse to fund a builder against the security of a property buyer.

Obviously, banks which lend funds & builders who receive funds, both have no issues about an agreement. Only, a property buyer who makes 2 commitments with this agreement - 1) to fund the builder and 2) to repay to a bank - has some issues. And issue is not about his role. Why don't banks fund builders directly? Why the financial transaction between a bank and a builder happens through a property buyer? Because banks don't trust builders! A property buyer is held as a ransom, offered as a security!!

Point is property agreement is useful only for builders and banks. Obviously, nobody wants to stop the practice of using property as fuel. Nobody says - property buyers, grow up! Give up dummy and enjoy real!! Stop booking and start buying a ready possession flat!!

Feel free to call me:

Subscribe for Free!

Central Railway to lay sub-urban rail links to Daund, Mulshi and Lonavala?

2011-08-20T11:04:00.000+05:30

Let us hope that Pune will get assistance from Central Government for the development of infrastructure facilities related to solid waste management, water supply and sewerage in satellite towns like Talegaon Dhamdhere, Chakan, Daund, Yavat, Pirangut - Paud!

As a solution to the growing population and dwindling infrastructure in the city, the state government has decided to implement the Mumbai model in Pune, where people travel to the city to work and return home to satellite nodes and townships.

According to the state’s initial observations, Pune’s growing population could be accommodated on the outskirts of the city. Once the connectivity is established, people would happily settle down on the outskirts.

Pune already has the comprehensive mobility plan in place, in which various mass transport modes are suggested. The state government has also written to the Central Railway for laying sub-urban rail links to Daund, Mulshi and Lonavala. Read More

Feel free to call me:

Subscribe for Free!

Why do we borrow at high interest rates and offer interest free funds to builders?

2011-08-19T09:54:00.002+05:30

Itna Kyun Sote Hai Hum?

Why do we book a flat in a pre-launch / launch offer and suffer?

Why do we buy a builder's day dream and suffer?

Why do we hope but don't demand?

Why do we borrow at high interest rates and offer interest free funds to builders?

Why do we sign an agreement which is not in our favor and risk our life?

Why do we buy a property which is not ready for possession?

Why do we buy a home which doesn't have a proper approach road?

Why do we keep on paying heavy property taxes when we don't get enough water and power?

Why do we dream but don't act?

Feel free to call me:

Subscribe for Free!

Pune builders recover the cost of construction and get ready to increase the property prices!

2011-08-18T10:08:00.001+05:30

Pune property buyers help builders to increase the rates!

A trap for collecting interest free funds from the property buyers in Pune

From the last recession in Pune real estate market, Pune builders learned the most important lesson. 'Positive sentiments' are more important than the facts. If the sentiments are positive, property buyers ignore facts and give their hard earned money to the builders.

So, in the current real estate slow down, builders in Pune decided to invest in creating 'positive sentiments' and started a strategic campaign of publishing 'positive news about Pune real estate market' in leading local Marathi & English newspapers.

Pune builders are sure that these positive news about Pune real estate market will increase the effectiveness of a launch ad. A property buyer with a positive sentiment will be a better bet than a property buyer with a 'confused' mind.

The goal of 'positive news about Pune real estate market' is not different from a launch ad of a project. Collect booking amount and 20% own contribution from the property buyer. Collect interest free funds without giving any commitment to the property buyers. Mostly, for the project which hasn't received all necessary sanctions and approvals.

1) The 'positive news about Pune real estate market' is supposed to create a positive mindset about booking a flat.

2) The 'positive news about Pune real estate market' is supposed to create fear in the property buyer's mind and compel him to give his hard earned money as a booking amount and own contribution.

3) The 'positive news about Pune real estate market' is supposed to motivate the property buyer to ignore rising home loan interest rates.

4) The 'positive news about Pune real estate market' is supposed to give him fake satisfaction of settling down in his own home when actually he is risking his life to economic & political uncertainties.

Realty prices may go up in Pune:

A news published in today's Times of India is just an example of 'a positive news about Pune real estate market' campaign started by Pune builders. The goal of the news is to motivate the property buyers who are sitting on the fence. Waiting for the expected property price reduction because of the higher home loan interest rates and uncertain economy.

The news refers to the popular 'demand and supply' principal and claims that the gap is because of the overwhelming 'booking'. When all of us know that the gap is because of the famous Pune real estate locha! Because of the N. A. Order or Environment Clearance issues!! Not because of the demand!!!

To create fear in Pune property buyers mind, the positive news about Pune real estate market announces that the property rates may go up but, for sure, will not come down. Why? Because, the builders have already recovered the cost of construction. So, now, remember that, like the last time, Pune builders are not desperate to reduce the property price of the on going projects.

Who empowered the Pune builders? Who gave 'holding power' to Pune Builders? In spite of slow booking, why property prices in Pune will not come down? The 'positive news about Pune real estate market' answers -

"Thanks to all of you, Pune property buyers, who booked at the launch stage! Now, forget about property price reduction! You have given us, Pune builders, a power to increase the property rates!!"

Feel free to call me:

Subscribe for Free!

Buy a ready possession flat until there is no real estate regulator!

2011-08-17T09:30:00.003+05:30

Don't become a victim of unscrupulous builders:

Be a victim today!

Indian citizens are fighting for Jan Lokpal to eradicate corruption. And for years, Indian property buyers are demanding a real estate regulator to prevent unfair trade practices. But nothing is happening on these fronts. Because, 'a real estate regulator' is as bad as 'Jan Lokpal' for the politicians!

However, you can refuse to become a victim of a unscrupulous builder. By just not booking a flat in a pre-launch or a launch offer. Safest way to invest in a real estate is to buy a ready possession flat.

If you look at the observations of The Competition Commission of India (CCI), you will realize that most of the pre-launch and launch offers are nothing but a drive to take a property buyer on a long ride. See what CCI says:

1) Realtors issue advertisements for launching projects without the land in question being actually purchased or registered and without taking prior approval of competent authorities.

2) They (Builders) also do not specify the total area of the plot / flat / house indicating clearly the carpet area and utility area, nor the date of delivery and consequential remedies available to the consumer in case of delay.

3) The amount collected from the allottees against a particular project is not deposited in a designated escrow account and utilised only for the construction of the concerned building.

4) The information relating to the progress of works and status of account of each allottee is not made available to buyers in a transparent manner.

5) Realtors build in hidden costs, other than the initial set price and do not make relevant information public.

6) There are often no valid reasons for the inordinate delay in execution of the projects.

Point is, a builder can play these dirty tricks on you because you book a flat at a pre-launch, launch stage. So, stop booking and start buying a ready possession property.

Feel free to call me:

Subscribe for Free!

Real estate, most preferred investment option: survey

2010-12-13T10:40:00.001+05:30

Investing in gold, National Saving Certificates and fixed deposits - "Out of Fashion"!

As far as investment is concerned, Indians like to play it safe, a survey has found. According to it, 65 per cent of working individuals in urban India prefer real estate as long-term investment option as it guarantees higher future returns and helps them stay off other riskier investment options like the stock market, equity, mutual funds and gold.

The country-wide survey, “Current Investment Patterns in working Urban Indians,” conducted by the Associated Chambers of Commerce and Industry of India under the aegis of ASSOCHAM Social Development Foundation (ASDF) asked almost 1,500 directors, officers, executives, teachers, professionals in the public sector and multi-national companies and self-employed traders, lawyers, doctors and financial experts about their preferred investment options for savings.

Most respondents said investing in gold, National Saving Certificates and fixed deposits was passé and represented the “old school” of investment concepts. Real estate, mutual funds and life insurance found favour among the younger lot.

To read more, please, visit The Hindu

Feel free to call me:

Subscribe for Free!

RBI's stance on home loans to increase borrowers' woes

2010-11-11T06:18:00.001+05:30

"Every borrower should examine his repaying capacity rather than his loan eligibility"

"If the property value dips any point of time, banks can ask for additional collateral. At this point of time, you have to provide additional collateral or pay the extra margin money. If you are not in a position to pay up the extra cash/collateral, the bank can categorize you as a defaulter. This is clearly mentioned in the home loan agreement."

“Don’t borrow up to the maximum limit as a percentage of your income. You should keep aside some contingency funds and investments which will come in handy in case of unforeseen emergencies such as job loss, forced sabbatical or even a family."

Home hunters are in a spot. While real estate prices are not showing any signs of easing (in fact, they have started hardening again), the Reserve bank of India (RBI) has chosen to tighten a few norms for home loans , adding to borrowers’ woes. In its recent policy review, RBI has taken three steps that will adversely impact prospective homebuyers who are dependent on home loans. To begin with, the loan-to-value ratio has been lowered to 80% from 85%.
To read more, please, visit:
The Economic Times

Feel free to call me:

Subscribe for Free!

New realty funds - not suitable for all!

2010-11-07T08:00:00.000+05:30

However, real estate funds are for investors who already have savings parked in other asset classes and also have allocable surplus in hand. As Mr Mahadevan states, “for a 22-year-old guy who is looking to own his property, a real estate fund cannot be viewed as a substitute”.

While real estate funds may help investors do away with the hassle of locating a good property to invest, offer diversification and avoid the legal impediments involved, they remain a ‘medium to high risk' investment option.

Mr Sunil Rohakale, Executive Director, ASK Investment Holdings, feels that it is important for investors to assimilate the fund strategy besides knowing key clauses tied to such funds. Real estate funds typically come with a 5-8 year lock-in, which makes them illiquid. The structure, fee and payout patterns in these products are also complex. Read More

Feel free to call me:

Subscribe for Free!

Banks will now lend only 80% of property price

2010-11-03T11:09:00.002+05:30

Now, anyone applying for a home loan from a bank will have to pay a margin money of at least 20% of the value of the property. This in effect means that you will have to shell out more from your own savings to buy that house you have been eying for a while. Earlier, this margin money varied between 10% and 15 %

Top industry officials feel this is a pre-emptive measure and is a warning sign for all in the real estate sector — developers, financiers and also the buyers — that there could be danger ahead.

“The RBI has always taken pre-emptive measures to prevent asset bubbles, particularly in real estate. It is in this context that the RBI has restricted the maximum loan to value ratio to 80% and increased risk weights on housing loans above Rs 75 lakh,” said Renu Sud Karnad, MD, HDFC, the mortgage finance major.

The RBI measure could also work in favour of home buyers in the form of a either a slow or nil rise in real estate prices. “The message from RBI is clear: There is a worry about real estate prices spiralling. This concern will ensure that there is a short-term cap on real estate prices and in the near future it may come down marginally,” said Gagan Banga, CEO, Indiabulls Financial Services. “A correction in prices should result in higher volumes given the strong macro economic conditions,” Banga added. Read More

Feel free to call me:

Subscribe for Free!

Loan against property

2010-10-26T05:32:00.001+05:30

Are personal loans the only option for urgent cash requirements?

Loan against property

For cash emergencies, personal loans are an easy and fast option. However, it could prove to be quite expensive on the pocket, with interest rates ranging between 15 per cent to 25 per cent.

Further, banks follow stringent evaluation of the borrower's financial profile.

So are personal loans the only option for urgent cash requirements? Investment Yogi brings to you a quick guide to other alternatives a borrower can choose from. To know more, please, visit:
7 alternatives to expensive personal loans

Feel free to call me:

Subscribe for Free!

Don't book a flat if there is no commencement certificate (CC) and consider only the carpet area and not the built-up, super built-up or saleable area!

2010-10-25T18:49:00.001+05:30

Maharashtra Chamber of Housing Industry (MCHI) wants to end "unethical practices"!

With a view to curb unethical practices, the Maharashtra Chamber of Housing Industry (MCHI), the apex body of real estate business in the state, has directed all its members not to book flats without receiving the commencement certificate (CC) from the authorities.

The MCHI has also asked its members to sell flats as per their carpet area and not on the built-up and super built-up basis, Mantri said. Following a public outcry against the sale of as high as 40% of built-up area, the state government had warned builders of action if they do not sell flats on the basis of their carpet area. Read More

Feel free to call me:

Subscribe for Free!

Floor rise and Fire-wise - lessons from the massive fire at Mutha Chambers 2 on Senapati Bapat Road Pune

2010-07-31T17:16:00.002+05:30

"What if the lift is out of order?"

The other day, Mrs. Kumar called me on my mobile 919860044110 to tell me that they had finalized the 3 BHK Flat on the 10th floor, in the particular project near Pancard Club, Baner, Pune 411 045.

When i asked her, why she finalized this particular flat, Mrs. Kumar said, "I am a very negative person! But the view from the terrace of my flat, tempted me to agree with my husband! You know? Every morning, over a cup of coffee, I can enjoy the view of Pashan Hills!"

Sounds interesting! Isn't it? Do you know, what was bothering Mrs. Kumar about finalizing this flat? How to climb to her 3 BHK Flat on the 10th floor if the lift be out of order? What if there is no power and generator is not working?

Mrs. Kumar's husband convinced her to be positive! Possibilities of all these 3 things happening at one and the same time are very rare, he told her! When i asked her, "How rare?" Mrs. Kumar said that Mr. Kumar thinks that only once in a life time!

So, both of them felt that it's worth to pay floor rise Rs. 50 per floor from 7th floor and finalized the 3 BHK Flat on the 10TH floor.

Mrs. and Mr. Kumar, Stupidly Optimistic and Foolishly Romantic Pune Property Buyers!

Today, when i was reading the news about the massive fire break out at the 8 storied commercial building Mutha Chambers 2 on Senapati Bapat Road, in which top 3 floors - 6th, 7th & 8th - were totally gutted and the blaze could be brought under control only after a 2 hour struggle (Video), i thought, what would be Mrs. & Mr. Kumar's reaction?

Does this news tell Mrs. Kumar that she is not "negative" enough? Has Mr. Kumar thought about this "rare" - once in a life time possibility? Have they realized that they are stupidly optimistic and foolishly romantic property buyers? What do you think?

Mrs. & Mr. Kumar, be wise, fire-wise!

We all know how the system works! Pune Municipal Corporation will continue to sanction and builders in Pune will keep on building 25 - 30 story high rise towers. Right?

But do you think that, it means that Mrs. & Mr. Kumar, educated property buyers in Pune, shouldn't buy a property in these high rise buildings?

Particularly, when Pune fire brigade doesn't have enough fire tenders and fire stations to take care of PMC and adjoining 10 kms area, which comes under town planning where development rules of PMC are applicable and fire NOC is a must.

What say you? Shouldn't the property buyer consider the eventuality of fire? Isn't the safety of your family more important than the view from the high rise building?

Don't you think that "floor rise" is nothing more than the builder's cruel joke? Don't you think that, if you are booking above 8th floor, actually the builder should compensate you for risking your family's life?

What say you? Please, share your views and help Mrs. & Mr. Kumar to be wise - fire-wise!

Feel free to call me:

Subscribe for Free!

Now, 10 per cent service tax on 25 per cent of the value of the built property, including the cost of land!

2010-05-04T05:44:00.000+05:30

In a relief to the realty sector and home buyers, finance minister Pranab Mukherjee on Thursday announced tax concessions to the construction sector, which was brought under the ambit of service tax in this year's budget.

With the announcement, service tax would be levied on 25 per cent of the gross sale value of property compared to 33 per cent proposed in the budget in February this year.

Replying to the debate on Finance Bill in the Lok Sabha, the finance minister said he proposed to ``provide the tax relief to the construction sector by enhancing their rate of abatement from 67 per cent to 75 per cent of the gross value, where such value includes the value of the land constructed upon," he said replying to the debate on Finance Bill in Lok Sabha.
To read more, please, visit Realty sector gets 8% tax relief

HDFC teaser rates ideal for pre-payment planners - within the first 5-7 years!

2010-04-21T00:29:00.000+05:30

Now, HDFC loan rates are charged at 8.25% for this fiscal year to March 2011, and at 9% for 2012. While the fixed rate will remain the same irrespective of the loan size, the floating rate will vary with the loan amount at the end of the two-year period.

The floating rate has two slabs — loans up to Rs 30 lakh where the rate will be 9% (PLR minus 4.75%) — and above Rs 30 lakh where the rate will be 9.25% (PLR minus 4.5%). The bank’s current PLR is 13.75%.

Since the HDFC scheme is on only till April 30, those who opt for the loan will be doing so without any information on the kind of interest rate they may have to pay from the third year onwards. Hence, the scheme could be ideal for home loan seekers intend to pre-pay their loans within 5-7 years. But long-term borrowers could be thrown off the track once the base rate comes into play.

To read more, please, visit The Economic Times

Union Budget 2010-11: Now, renting of immovable property is a taxable service

2010-02-26T17:56:00.002+05:30

The Budget has also clarified that renting of immovable property is a taxable service. It would be applied retrospectively from June 1, 2007.

The government today brought eight new services, including brand promotion, under the tax net even as Finance Minister Pranab Mukherjee retained the service tax rate at 10 per cent.

Services promoting brand of goods, services, events and business entity have been brought under the tax net, according to Budget memorandum presented by Mukherjee.

Similarly, permitting commercial use or exploitation of any event organised by a person or organisation is taxable.

To read more, please, visit Service tax net widened, rate unchanged

Union Budget 2010-11: Finance Minister on real estate, and housing

2010-02-26T14:35:00.013+05:30

Rural Development

80. Indira Awas Yojana is a popular rural housing scheme for weaker sections. Taking note of the increase in the cost of construction, I propose to raise the unit cost under this scheme to Rs.45,000 in the plain areas and to Rs.48,500 in the hilly areas. For the year 2010-11, the allocation for this scheme is being increased to Rs.10,000 crore.

Urban Development and Housing

82. "Swarna Jayanti Shahari Rozgar Yojana" designed to provide employment opportunities in urban areas, has been strengthened with focus on community participation, skill development and self employment support structures. For the year 2010-11, I propose to increase the allocation for urban development by more than 75 per cent from Rs.3,060 crore to Rs.5,400 crore. In addition, the allocation for Housing and Urban Poverty Alleviation is also being raised from Rs.850 crore to Rs.1,000 crore in 2010-11.

83. While presenting the Union Budget for the year 2009-10, I had announced a Scheme of one per cent interest subvention on housing loans up to Rs.10 lakhs where the cost of the house does not exceed Rs.20 lakhs. I propose to extend this Scheme up to March 31, 2011. Accordingly, I propose to provide a sum of Rs.700 crore for this Scheme for the year 2010-11.

84. The Rajiv Awas Yojana (RAY) for slum dwellers and urban poor was announced last year to extend support to States that are willing to provide property rights to slum dwellers. This scheme is now ready to take off. I propose to allocate Rs.1,270 crore for 2010-11 as compared to Rs.150 crore last year. This marks an increase of over 700 per cent. The Government's efforts in the implementation of RAY would be to encourage the States to create a slum free India at the earliest.

Direct Taxes:

1) 133. To provide one time interim relief to the housing and real estate sector which was impacted by the global recession, I propose to allow pending projects to be completed within a period of five years instead of four years for claiming a deduction on their profits. I also propose to relax the norms for built-up area of shops and other commercial establishments in housing projects to enable basic facilities for their residents.
Full text of Pranab Mukherjee's Budget 2010-11 speech

Union Budget 2010-11: Direct Tax Code (DTC) to come from April 1, 2011

2010-02-26T13:58:00.001+05:30

Finance minister Pranab Mukherjee on Friday said the uniform Direct Tax Code (DTC) will come into effect from April 1 next year.

"We have already begun wide discussions before implementing the uniform Direct Tax Code by April 1, 2011. We are involving people and other stake holders on its design," said the finance minister while presenting the General Budget for 2010-11 in the Lok Sabha.

The new code seeks to replace the 50-year-old Income Tax Act - that has seen as many as 4,500 amendments since it was enacted in 1961 - to reflect the needs of an emerging economy.

The DTC has been criticized widely including from various political parties who feel that the measure has failed to come up to the aspirations of modern India.

To read more, please, visit ibn live

Union Budget 2010-11: revised tax slabs

2010-02-26T13:32:00.002+05:30

The finance minister proposed the following slabs for individual tax payers:

There will be no tax for income upto Rs 1.6 lakh. This was the same earlier.

For income between 1.6 lakh - 5 lakh, the tax liability will be 10%. The older slab was 1.6 - 3 lakh.

For income between 5 lakh - 8 lakh, the tax liability will be 20%. Earlier 20% tax was deducted on Rs 3-5 lakh income.

Individuals with income of above Rs 8 lakh will have tax liability of 30%. Earlier 30% was deducted on income of Rs 5 lakh and above.

The government would allow a deduction of up to Rs 20,000 for investments in long-term infrastructure bonds. The deduction would be in addition to Rs 100,000 allowed under Section 80C of India's Income Tax Act.

To read more, please, visit The Economic Times

The real woes of investing in realty

2010-02-26T08:48:00.002+05:30

And surprisingly, real estate investment doesn’t seem to carry any of negative attributes associated other assets such as equities (risky and unfaithful) and banks and post-office deposits (poor real returns).

The scramble to secure a pie of the lucrative real estate market has turned into frenzy ever since the government announced a tax-break on housing loans opening floodgates to the private sector investment in real estate projects. It’s not uncommon to find individuals owning three or even four residential properties. But this over reliance on real estate as financial planning tool can turn out to be a liability in old age. Consider this, post retirement, an individual needs an income stream that is regular, fairly predictable, can rise with the increase in inflation and most importantly easy to administer.

For all, its advertised virtues, real estate fails on the most of the above criteria. As mentioned above, a house is most often the largest investment for any individual, but it is seldom the biggest source of income/cash flows for a retiree.

This is because post-tax yields (i.e. rents adjusted for municipal taxes, income tax on rental income and maintenance costs) are pitifully low in India.

To read more, please, visit ET Slide Shows

Ravi Karandeekar's Pune Real Estate Investment Blog

How to Recover Money Lost in Proposed N A Plots

Ponzi Schemes in Pune:

Grahak Margadarshan Kendra (Free Consumer Guidance Center) Akhil Bhartiya Grahak Panchayat Pune

Related Stories:

Feel free to call me:

What is Possession Letter, Occupation Certificate and Completion Certificate?

Which Are Required for IT Exemption?

Related Stories:

Feel free to call me:

Pre-launch offers are illegal

Pre-launch offer is bluffing & cheating:

Related Story:

"Or We Will Cancel Your Booking!"

High Property Prices - Why does Government give a free hand?

Tax Cow:

Stamp Duty, Registration Charges, VAT & Service Tax:

Animal Farm:

Related Stories:

Feel free to call me:

Subscribe for Free!

An Agreement to be a Slave of a Builder

Die for a Politician & Live for a Builder:

Real Estate Regulation Bill:

Related Stories:

Feel free to call me:

Subscribe for Free!

An Agreement of Your Flat - It's not a "Sale Agreement", Baby!

An agreement of your flat is a 'sugar teat'...keep on sucking till you get possession, baby!

Help! Wanted SuperNanny!!:

"Agreement to Sell" & "Agreement to Sale"

Fantasy & Reality:

Related Stories:

Feel free to call me:

Subscribe for Free!

Central Railway to lay sub-urban rail links to Daund, Mulshi and Lonavala?

Related Stories:

Feel free to call me:

Subscribe for Free!

Why do we borrow at high interest rates and offer interest free funds to builders?

Itna Kyun Sote Hai Hum?

Related Stories:

Feel free to call me:

Subscribe for Free!

Pune builders recover the cost of construction and get ready to increase the property prices!

Pune property buyers help builders to increase the rates!

Realty prices may go up in Pune:

Related Stories:

Feel free to call me:

Subscribe for Free!

Buy a ready possession flat until there is no real estate regulator!

Don't become a victim of unscrupulous builders:

Related Stories:

Feel free to call me:

Subscribe for Free!

Real estate, most preferred investment option: survey

Investing in gold, National Saving Certificates and fixed deposits - "Out of Fashion"!

Feel free to call me:

Subscribe for Free!

RBI's stance on home loans to increase borrowers' woes

Feel free to call me:

Subscribe for Free!

New realty funds - not suitable for all!

Feel free to call me:

Subscribe for Free!

Banks will now lend only 80% of property price

Feel free to call me:

Subscribe for Free!

Loan against property

Are personal loans the only option for urgent cash requirements?

Feel free to call me:

Subscribe for Free!

Don't book a flat if there is no commencement certificate (CC) and consider only the carpet area and not the built-up, super built-up or saleable area!

Maharashtra Chamber of Housing Industry (MCHI) wants to end "unethical practices"!

Feel free to call me:

Subscribe for Free!

Floor rise and Fire-wise - lessons from the massive fire at Mutha Chambers 2 on Senapati Bapat Road Pune

"What if the lift is out of order?"

Mrs. and Mr. Kumar, Stupidly Optimistic and Foolishly Romantic Pune Property Buyers!

Mrs. & Mr. Kumar, be wise, fire-wise!

Grahak Margadarshan Kendra
(Free Consumer Guidance Center)
Akhil Bhartiya Grahak Panchayat Pune