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How new real estate bill could reshape the realty ecosystem? 6/20/2013                   1) Project Registration When the Real Estate (Regulation and Development) Bill 2013 comes into effect, all projects will have to be registered with a real estate regulatory authority. Promoters will have to disclose details about the project (name, type, plans, partnership companies, names of persons involved with construction etc). Will have to specify what kind of area is for sale (based on standardised markers). All brokers and agents will have to be registered with the regulator before they can practise. Builder will have to provide a list of agents who will represent each project. Once the project is registered, all details will have to be put on the website and updated every quarter. This includes disclosing the extent of project completion. What This Means A) Buyers can take informed decisions. "Today, it s impossible to compare properties because square footage, amenities, floor-space index consumed and even delivery schedules are different for different builders," says Pranay Vakil of Praron Consulting. "Standardising this will allow consumers to make apples-toapples comparisons." B) Which standards to follow? "The Bureau of Indian Standards has laid down standards for the construction industry, and clearly defined things like carpet area, plinth area or how to calculate the difference between the balcony and room area," says consumer rights advocate Anand Patwardhan. "If the bill brings in a new set of definitions, it will create a conflict." C) Do away with middlemen: When all the details are on the website, housing rights activists feel there is no need for brokers and agents; buyers can get in touch with promoters directly. Also, if the regulatory authority is going to insist on brokers being registered with it, to what extent will it be liable for their actions? Activists say this is not clear. D) "Having access to the relevant information will help de-risk lending," says VK Sharma, MD and CEO of LIC HousingBSE -4.06 % Finance. At the moment, buying a house is like groping in the dark, he adds. "Even with the most trusted builder, you don t know what you will get. This kind of transparency will boost buyer confidence."

Big Apple Braces For Basement Real-Estate Boom 6/19/2013                   In the wake of Superstorm Sandy, New York City has begun a massive infrastructure relocation. “Sandy revealed that if you have critical infrastructure in the basement anywhere in the City, you’re exposed,” said John Bartlick, the Director of Energy Services at the NYU Langone Medical Center. All of that infrastructure buried beneath the five boroughs of New York City is headed for higher ground. Whether it ends up on the roof or gets stuffed into “closets” on the ground floor will likely vary from building to building. The looming (and in some cases already underway) infrastructure relocation is likely to cost a heap of money. It has also raised concerns about revenue loss as a result of displacing tenant space with transformers, circuit panels and other electrical components. The potential downside of this relocation has attracted considerable attention. While those adverse impacts may be true, virtually no ink has been spilled on the potential upside. As I see it, the long-term upside may prove to be more beneficial than the short-term downside.

Real Estate Bill: Centre and states may collude on parallel laws cost 6/18/2013                   There are some differences between the Central Bill and laws proposed or already present in various states with regard to housing. Maharashtra uses built up area in its Ready Reckoner, while the central Bill uses carpet area. In addition, states will have to foot the bill for setting up and running the regulatory authority and appellate tribunal under the proposed Act The Real Estate (Regulation and Development) Bill (Realty Bill) recently passed by the Union cabinet fails to provide clarity on several issues that the state governments are expected to implement. The conflict is not limited to Central and state laws, but also reaches to the basic definition of area under sale. For instance, the Ready Reckoner of the Maharashtra government uses built-up area for referring area under sale, while the Realty Bill talks about carpet area. Carpet area is the area enclosed within the walls, while built up area covers carpet area plus walls and the balcony. (As per the Bill, ‘carpet area’ means the net usable floor area of an immovable property, excluding the area covered by the walls.) Pranay Vakil, founder chairman of Praron Consultancy and former chairman of Knight Frank India, while speaking at a Moneylife Foundation seminar said there would be some issues (for the Realty Bill) like jurisdiction, registration and control of developers with multi-state operations besides conflict between central and state laws. In his words, the Realty Bill, which is a huge step forward in terms of consumer protection, would need some ‘debugging’. There are areas of conflict between the central and state laws that also need to be debugged. Last year, both houses of the state legislature passed the Maharashtra Housing (Regulation and Development) Bill (MHRDB), which at present is awaiting the presidential nod. According to media reports, Sachin Ahir, (minister of state for housing), Maharashtra, and few other states too have objected to the Realty Bill due to difference in conditions and development control regulations for different cities. “We do not know in what form the Realty Bill will be imposed on states, whether it will be a nodal law or a law that will supersede what the state government has proposed. We will decide what next once we get information from the Centre, once we get the minutes of the Cabinet meeting,” Ahir had said. While the MHRDB seeks to safeguard interests of home buyers and bring transparency in real estate deals by setting up a housing regulatory authority and a housing appellate tribunal, the central Bill also proposes the same. A press note issued by the Union government states that “Establishment of one or more ‘Real Estate Regulatory Authority’ (RERA) in each state/UT, or one authority for two or more states/ UT, by the appropriate government, with specified functions, powers, and responsibilities to exercise oversight of real estate transactions, to appoint adjudicating officers to settle disputes between parties, and to impose penalty and interest”. While speaking at the Moneylife Foundation seminar, Parimal Shroff, who has over 37 years’ experience in constitutional, corporate, civil and property law, pointed out that the Central Act is “too ambitious”. He said, the functions of RERA includes administrative, advisory, executive, judicial and regulatory and it needs to be rationalised as it can be overburden by solving smallest to largest issues across the country. In addition, the state governments are expected to establish Real Estate Appellate Tribunal (REAT) to hear appeals from the orders or decisions or directions of the authority and the adjudicating officer. The REAT should be headed by a sitting or retired Judge of the high court with one judicial and one administrative or technical member. This is also not practical, especially looking at the dearth of high court judges today. According to Ahir the central Realty Bill was largely based on the housing bill proposed by Maharashtra. He said, the only major difference was the MHRDB sought to equate the appellate tribunal with a civil court, while the central one did not. Instead, the Realty Bill provides same powers to RERA as vested in a civil court while trying a suit. One of the issues that could put brakes on setting up RERA and the REAT is the cost factor. As per the Bill, the state government should set up RERA and tribunals. However, the states would be too reluctant to bear the financial burden on setting up these authorities, unless the Centre provides sufficient funding. The Realty Bill says, “The state government may, after due appropriation made by the state legislature by law in this behalf make to the authority, grants and loans of such sums of money as the state government may think fit for being utilized for the purposes of this Act.”

Ambitious Real Estate Regulatory Bill: The humungous job of monitoring 30000 crore sq ft of construction planned 6/14/2013                   The Real Estate (Regulation and Development) Bill, 2013, approved by the Union Cabinet aims to protect the interest of consumers, to promote fair play in real estate transactions and to ensure timely execution of projects. While this looks good on paper, the real question is who is going to collect the humungous data required to bring to record 30,000 square feet of construction that is planned across India? While speaking at a seminar organised by Moneylife Foundation on decoding the Bill, Pranay Vakil, noted property expert and former chairman of Knight Frank India, admitted that the registration of properties of about 30,000 crore sq ft across the country is really going to be a tough task. The Bill demands greater disclosure from the developers and a higher level of project accountability to remove the information asymmetries from the property market. There is also mandatory registration of all real estate projects and real estate agents who intended to sell properties, with the Real Estate Regulatory Authority (RERA). For each project, the developer must disclose details of the promoters, project, layout plan, plan of development works, land status, carpet area and number of the apartments booked, status of the statutory approvals and disclosure of pro-forma agreements, names and addresses of the real estate agents, contractors, architect and structural engineer. This is where the real challenge emerges. Monitoring whether all the projects that fall under purview are actually submitting themselves for registration would be a huge task. Even creating and maintaining data would require trained employees. Who will foot the bill of employee cost, infrastructure like computer systems, offices, transportation and communication, especially since the regulators would have to be set up by each state? State Issue That leads to another issue. The quality of information may not be the same across all the states. All the disclosures are supposed to be mandatorily submitted to the RERA. However, it is not the union government, who would set up the RERA but the states. A press note issued by the government states that "Establishment of one or more ‘Real Estate Regulatory Authority’ in each State/UT, or one Authority for two or more States/ UT, by the Appropriate Government, with specified functions, powers, and responsibilities to exercise oversight of real estate transactions, to appoint adjudicating officers to settle disputes between parties, and to impose penalty and interest". Similarly, the state governments are expected to establish Appellate Tribunal to hear appeals from the orders or decisions or directions of the Authority and the adjudicating officer. The Appellate Tribunal should be headed by a sitting or retired Judge of the High Court with one judicial and one administrative or technical member. This is also not practical, especially looking at the dearth of High Court judges today. One of the issues that could put breaks on setting up RERA and the Appellate Tribunal is the cost factor. As per the Bill, the state government should set up RERA and Tribunals. But the states would be too reluctant to bear the financial burden on setting up these authorities, unless the Centre provides sufficient funding. (Remember, the Prize Chits and Money Circulation Schemes (Banning) Act or PCMCS Act, 1978. It is a Central Act, which is expected to be enforced by the states. And except for a few, not many states are interested in this. ) In short, cost, the extent of effectiveness and the implementation at the state-level would emerge as hindrances for the Bill going forward.

100+ Real Estate Leaders to Meet at Paul Writer’s Real Estate Marketing Conference and Awards 6/17/2013                   The Great Indian Marketing Summit - Realty Edition on June 21 at The Leela Palace, Bangalore, will bring together the real estate industry s top leaders and decision-makers to discuss trends, debate ideas, and share knowledge. Event will include the exclusive release of "The Red Book of Real Estate - Presented by IndiaProperty.com”. This is a handbook of the leaders in the real estate industry and carries caselets of award-winning real marketing campaigns. Awards to recognize excellence in marketing will be presented to the winning nominations. Applications from leading organizations are being evaluated by an elite jury panel comprising experts such as Bijou Kurien, President & CE, Lifestyle at Reliance Retail, L K Gupta, CMO, RedBus, K Ramakrishnan, President & CMO, Cafe Coffee Day, Prof Abraham Koshy, IIM Ahmedabad, Amit Gossain, EVP - Marketing & Business Development, JCB India and Akshay Mehrotra, CMO, Big Bazaar. Conference highlights include: -- The Red Book of Real Estate — exclusive release of a special report by Paul Writer Research on innovation in real estate marketing -- Insightful outlooks on the use of Digital, the rise of Ingredient Marketing, Building Customer Communities; and more! -- Awards - Recognition across eight categories for India’s top marketing campaigns in the real estate industry

NRIs eye real estate to get bigger bang for weaker buck 6/15/2013                   Hyderabad, June 14: Rupee depreciation has been a matter of concern for most segments. But there is one section, the non-resident Indian community, which is keen to make the most of this development to make investments in the real estate. “The rupee has depreciated nearly 18-20 per cent in the last two years. Enquiries from NRIs have gone up lately as they are keen to make the most of this situation,” Anuj Puri, Chairman and Country Head, Jones Lang Lasalle, said. More value Inputs from markets across the country show that NRIs are keen to invest in real estate now as they see more value for their investments. While they gain due to the low rupee value versus, say, the dollar, property prices have still not reached the peak rates of 2008, making it more attractive to buy now, he explained. In the past five years since the 2008 peak, prices have gone up about 18 per cent in Hyderabad, 74 per cent in Bombay, 46 per cent in Bangalore, 38 per cent in Chennai, 54 per cent in Kolkata and 43 per cent in Pune. The most preferred range of homes is in the Rs 40-60 lakh category. However, there seems to be oversupply in the luxury market in cities such as Mumbai and other metros. During an interaction here, Puri said the regulatory environment is still a matter of concern, hampering investments. The new Bill augurs well but certain provisions need to be tweaked. Referring to global investors, Puri said they view their investments in the long term and do not change course due to currency fluctuations. They invest in a country like India as they get returns of up to 12 per cent, as against 8 per cent back home. REFORMS Alastair Hughes, Chief Executive Officer, Asia Pacific, JLL, said: “India’s ability to attract investments depends on the pace of reforms. There have been some initiatives in terms about bringing about an enactment and also a regulator, but these need to be addressed at a faster pace.” “Investors prefer predictable outcomes. They do not like hurdles. That is when they invest. This predictability is missing in India. They are wary of investments. It is not fair to compare China and India, both are different, each with some great attributes,” Hughes said.

Joint investments helping boost real estate deal sizes 6/12/2013                   Mumbai: Financial services companies are striking larger deals with realty developers than in recent years by getting group firms to invest in or lend to them jointly. Last week, India Infoline Ltd (IIFL) entered into a deal to invest Rs.350 crore in Wadhwa Group’s slum redevelopment project in Chembur, Mumbai. Three IIFL entities—its non-banking financial company (NBFC), its first real estate sector fund and another fund it recently raised—collaborated to put in most of this money. It raised the balance from other wealthy individual clients. In May, two IIFL group firms—the real estate fund and the new fund—invested Rs.110 crore in a residential project in Ghaziabad being developed by Shipra Group. Such joint deals involving group firms enable not only larger but also more lucrative transactions, said Balaji Raghavan, chief executive of the IIFL real estate fund. “Such arrangements also give an opportunity to the clients to participate,” he said. Large transactions provide much relief for real estate firms, coming after years of them having to be satisfied with small investments or loans while they struggled for capital in a sluggish economy. Many developers are looking to raise money to pare debt, buy land or finance the construction of their projects. For the financial services companies, joint deals serve to limit the lending exposure of their group companies, but analysts say this will work well only when there’s good synergy between these entities. Private equity (PE) funds have become more conservative and cautious while lending to or investing in real estate firms, by restricting deal sizes and spreading their risk by doing more transactions. These funds are also striking more debt financing deals with fixed returns, rather than investing in equity. NBFCs, on the other hand, have only gained in importance in lending to developers and become a preferred channel of borrowing capital. Earlier this year, two Kotak group companies put in Rs.170 crore together to back Runwal Group’s acquisition of 150 acres in Dombivali, suburban Mumbai. Kotak Mahindra Bank Ltd’s NBFC provided Rs.100 crore of debt and Kotak Realty Fund struck a Rs.70-crore deal. While these were treated as individual deals, the group firms had collaborated for the transaction. “Kotak hasn’t done similar deals in real estate in the past, but it is certainly possible that it would do them going forward,” said a company executive, who didn’t want to be named. Such joint deals will be the trend as individual financial firms don’t want to take on much exposure to India’s volatile realty sector, said T.R. Srinivas, managing director, O3 Capital. “Clients (of these financial firms) would also get some comfort if they see that the firms themselves have put in their own money. The combined fee income would also be far higher in such transactions,” said Srinivas. A Bangalore-based realty firm is in the process of arranging capital from two group firms of a Mumbai-based financial services company. The developer had initially approached the NBFC for a Rs.150 crore debt, but since the lender didn’t want to write a big cheque, it brought in a group entity for the balance capital requirement, said an executive with the developer, declining to be identified. “From the investee point of view, it doesn’t matter whether the money has come in from a single or two sources as long as there is synergy among them,” the executive said. Such joint transactions also expand the lending portfolio of investors, particularly when they have the same skill-set to understand the credit risk, said Ambar Maheshwari, managing director-corporate finance, Jones Lang LaSalle India, a property advisory. “So while some of the lending will happen from their own books, some of them will underwrite a portion and downsell it to clients,” he said.

Builders Association of India hopes Real Estate Bill is passed in monsoon session 6/11/2013                   MUMBAI: Builders Association of India (BAI) today said it has welcomed Centre s move to clear the Real Estate (Regulation and Development) Bill and hoped that the same would be passed in the Parliement s monsoon session. "We welcome the Bill and hope that it will be passed by the Parliament in the forthcoming monsoon session, and thereafter respective states would also pass the bill in their respective assemblies," BAI General Secratery Anand Gupta said in a statement here. "BAI has represented to the Central and state governments to regulate the real estate industry, which in its stupendous growth, has been attracting several players with dubious records. "It is because of easier entry into this industry, which does not have any control such as registration and regulations, these fly-by-night operators have brought bad name to the real estate industry. Today any one can become a developer," he further said. Gupta added that the Bill must fix up registration and prequalification criteria for any one to register as real estate developer. "Importantly the responsibilities of the various stake holders like developer, local self governments, state government and the Centre should be very clearly defined and all should abide by a predefined time-bound programme for the completion of project." Long time-frame to complete projects due to various hindrances like Government approval process, project finance and title issues have been the biggest problems faced by the real estate industry in India today. Launching a housing project normally needs more than 55 approvals from various departments of local self government as well as the state and central governments, which takes minimum 15 to 24 months for compliances, he said.

Realtors welcome real estate regulatory bill 6/13/2013                       NEW DELHI: Hailing the Cabinet’s approval of real estate regulatory bill, realtors’ body NAREDCO has said the proposed law will bring transparency in the sector, while helping home buyers in redressal of their grievances. The Cabinet has approved the Real Estate (Regulation and Development) Bill. It provides for setting up a regulator for the realty sector and having provisions like a jail term of up to three years for developers who make offences like putting up misleading advertisements about projects repeatedly. “It is a welcome step. We had been waiting for the same since long as it would bring buyers at ease along with transparency and respect to the sector,” National Real Estate Development Council (NAREDCO) President Naveen Raheja said in a statement. The proposed law will protect the interest of all stakeholders and also help check unscrupulous players in the sector, he added. “This now would help to establish a regulatory authority for enforcing fair practice and accountability norms and fast track dispute resolution mechanism in real estate transactions,” Raheja said. Commenting on the bill, global realty consultant CBRE South Asia Chairman & MD Anshuman Magazine said: “Real estate regulator bill should have been more balanced (while) taking view of challenges faced by developers and consumer grievances.” “While consumers need protection, for real estate development to happen more efficiently, and in a transparent manner, administrative reforms are required urgently,” he added.-PTI

Industry welcomes Real Estate Bill 6/8/2013                   The Central Cabinet has approved the long-pending Real Estate Bill that seeks to regulate the hitherto unregulated housing sector in India. If enacted, it is expected to bring considerable relief to ordinary buyers and investors. “By imposing strict regulations on promoters, the Bill ensures that construction is not only completed in a timely manner but that the buyer gets the specifications promised,” said Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India. The Bill talks of an appellate tribunal for quick dispute resolutions, besides restricting developers from making misleading advertisements, and insists that all approvals are in place before they market the project. “It will help institutionalise the sector, giving it the fillip to move to a new phase of growth. Hopefully, it will be a step towards industry status for the sector,” said Sanjay Dutt, Executive, MD-South Asia, Cushman & Wakefield. “With the safety features proposed in the Bill, the RBI’s negative perception of lending to housing projects will be dispelled and developers will find it easier to access formal funding, thereby not have to rely on sales to fund the construction of the projects,” he added. Real estate brokers have been brought into the ambit of the Bill and their registration is mandatory. Welcoming the Cabinet approval, Credai’s National President C. Shekar Reddy said that from the industry perspective, it is important that the bill maintains equilibrium between developers and end-users. “Certain provisions must be amended, otherwise it will result in substantial increase in cost to home buyers.” Meanwhile, Credai chairman Lalit Kumar Jain said that the Bill seeks to whip only errant developers and expressed fear that it could encourage corruption instead of curtailing a social menace. RICS, the body for standards in land, property and construction, said the Bill could be termed a‘housing regulation bill’ rather than a ‘real estate regulation bill’ because it applies only to the primary residential market, and not the secondary or commercial markets. “The stipulation of ‘carpet area’ as the only measurement unit will limit fraudulent practices arising from use of measurement units such as saleable area, super built-up area etc,” said a RICS statement. T. Chitty Babu, CCEO, Akshaya, said that the Bill would “help construct a clean, clear, principled and balanced real estate system to reduce the burden on customers as well as developers.” Pointing to the fact that the Bill was buyer-centric, Ganesh Vasudevan, CEO, IndiaProperty.com, said that it “won’t be accepted in totality by real estate developers.” As of now, the Bill has received Cabinet s approval only. Now it remains to be seen whether the government chooses to introduce it by passing an Ordinance, or whether it goes before Parliament for a discussion before it is put to vote in both houses. After that it goes for the Persident s signature. Only then will the new measures be finally set in place.

Real estate bill makes buyer the king 6/9/2013                   BANGALORE: With the Union Cabinet approving the Real Estate (Regulation and Development) Bill, the country s highly unregulated and unorganized real estate sector moves a step closer towards greater transparency and compliance. The Bill, which looks at just the residential market, seeks to create a central regulatory authority and various state levels authorities for the real estate market in a bid to protect buyer interests by providing a uniform regulatory framework. The Bill seeks to prevent developers from putting out misleading advertisements; ensure that they don t market projects unless necessary approvals are in place; and direct developers to declare a time frame for developing projects. The Bill also seeks to impose monetary penalties on the developer for project delays, with repeat offences liable for a jail term.Developers are also re quired to keep 70% of the monies realized from sales in to an escrow account towards construction costs, which cannot be diverted to other use. Often it is found that money received for one project is used for other projects, thus delaying the first project. "While the Bill may not impact the large developers, it will definitely raise the fiduciary disciplinary bar for the small and mid-level developers catering to 30% of India s housing sector demand," said Shrinivas Rao, CEO-Asia Pacific of Vestian, a global consultancy company. The Bill defines the sale of property by carpet area and not super-built up area or any other terminology. The carpet area is normally defined as the actual net usable floor area of a residential unit. Super built-up area is the built-up area (carpet area and wall breadth) in addition to the proportionate area of common areas, such as the lobby, lift shaft, stairs, club, etc. Rao explains, "Say you are buying a 3-BHK unit with a super built up area of 1,500 sqft. The developer gives you the plans with all the dimensions, but in most cases the buyer is clueless about the carpet area or actual usable area. "Hence, with this safeguard, buyers would get to know upfront what amount of livable space they are buying." However, RICS, a leading professional body for qualifications and standards in land, property and construction, said that the concern is of the actual definition and measurement standards for carpet area , which still haven t been clearly defined. Since the definition mentioned in policies and laws tend to be subjective, carpet area is interpreted and calculated differently. "This problem is not unique to India as it exists in many parts of the world," said RICS. The Bill is to be tabled in the monsoon session of Parliament. But developers are already upping the chorus for a simultaneous Bill on project approvals. "The fear is that the Real Estate Bill will add another layer of bureaucracy in an industry which is heavily burdened by multiple approvals from different agencies which increases the project completion cycle and adds to project costs," said Suraj Asrani, COO, Cornerstone Properties. Across the country developers experience inordinate delays and difficulty in obtaining project approvals from multi-headed government agencies. These delays range from 8 months to 18 months on an average. "These issues do not find any resolution in the Bill," said Asrani. Asit Koticha, chief investor at Pashmina Developers, said that the government should simultaneously look at setting up a single-window clearance system to streamline the approval process. "This would ensure timely delivery without project cost escalations and help in strengthening the customerdeveloper relationship," said Koticha.

Real Estate Bill: How home buyers stand to gain and lose 6/10/2013                   Last week, the Union Cabinet approved the draft Real Estate (Regulation and Development) Bill 2013 that allows for the creation of a regulator in the real estate sector. Once passed by Parliament and subsequently adopted by each state, it will allow for the creation of a real estate regulator in each state (realty being a state subject). While the Bill applies to residential properties, commercial real estate has been kept out of its purview. Let us examine the pros and cons of the draft Bill in its latest avatar. HOW YOU STAND TO GAIN Stress on timeliness and adherence to specifications: Once the Bill gets enacted, it will provide considerable relief to the buyer who faces innumerable difficulties and at times even gets duped by developers and brokers. Anuj Puri, chairman and country head, Jones Lang LaSalle India, points to two specific aspects of the Bill that will benefit buyers. "By imposing strict regulations on the promoter, the Bill looks to ensure that construction is completed on time, and on completion the buyer gets a property that matches the promised specifications," he says. Mandatory disclosure of project details: The Bill will make it mandatory for developers to disclose details, including minor ones, about their projects on the company website. Says Niranjan Hiranandani, managing director of Hiranandani group of companies: "The details will include specifications, such as the layout plan, carpet area of each dwelling unit, number of units in the project, the amenities being provided, and the approvals received for the project from various authorities. Such disclosures will make it difficult for developers to make ad hoc changes to their project plans at a later stage of development." Developers will also have to specify the carpet area of each apartment. Selling on the basis of the ambiguous super area will no longer be permitted. Periodic updates on the stage of development that the project has reached will also become mandatory. Separate accounts for each project: The Bill also makes it mandatory for developers to maintain separate bank accounts with scheduled commercial banks for each of their projects. At least 70% of the corpus raised for the project from buyers (at intervals) will have to be deposited within 15 days of realisation in the account. Developers will have to channelise the money to meet the costs of that particular project. Diversion of funds from one project to another will not be permitted.

Cabinet gives nod to real estate bill 6/5/2013                   NEW DELHI: A Bill providing for setting up a regulator for the real estate sector and having provisions like a jail term of up to three years for developers who make offences like putting up misleading advertisements about projects repeatedly was approved by the government today. The Real Estate (Regulation and Development) Bill, approved by the cabinet, seeks to provide a uniform regulatory environment to the sector. It also intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities. Builders and developers who become repeat offenders may even face a jail term of up to three years. The Bill makes it mandatory for builders to clarify the carpet area of the flat. This would be made uniform for the entire country. This rule would make the concept of super area - which is often used to mislead owners - virtually non-existent. The Bill has provisions under which all relevant clearances for real estate projects would have to be submitted to the regulator and also displayed on a website before starting the construction, sources said. The proposed legislation has tough provisions to deter builders from putting out misleading advertisements related to the projects carrying photographs of the actual site. Failure to do so for the first time would attract penalty which may be up to 10 per cent of the project cost and a repeat offence could land the developer in jail.

Real estate sector set to be customer friendly 6/7/2013                   Transparency, uniform regulatory environment, interests of consumers protected and speedy adjudication of disputes. These, among others, are the features that go into the making of the Real Estate (Regulation and Development) Bill 2013 cleared by the union government this week and promise to streamline a hitherto unregulated sector. Describing the bill as the government’s reiteration of the commitment to make real estate development transparent and consumer friendly, Ajay Maken, Union Minister of Housing & Urban Poverty Alleviation had said the real estate and housing sector was at largely unregulated and opaque at present, with consumers often unable to procure complete information, or enforce accountability against builders and developers in the absence of effective regulation. The bill has provisions dealing with registration of projects and agents with the Real Estate Regulatory Authority, functions and duties of promoters, functions and duties of real estate agents, rights and duties of allottees, establishment of Real Estate Regulatory Authority, establishment of Central Advisory Council, establishment of Real Estate Appellate Tribunal, offences and penalties, Finance, Accounts, Audits and Reports etc. Key aspect One key aspect of the bill happens to be the initiative at introduction of the concept of using only ‘carpet area’ for sale which has till now been ambiguously sold as super area, super built up area etc. It also aims to ensure consumer protection, by making it mandatory for promoters to register all projects, prior to sale, and only after having received all approvals from development/municipal authorities, thereby protecting buyer investments. It makes mandatory upon the promoters to deposit 70 per cent or such lesser per cent as notified by the government to cover the construction cost of the project of funds in a separate bank account to ensure timely completion and prevent fund diversion. A mandatory public disclosure norms for all registered projects has been put in place which would include details of the promoters, project, layout plan, plan of development works, land status, carpet area and number of the apartments booked, status of the statutory approvals and disclosure of agreements, names and addresses of the real estate agents, contractors, architect and structural engineer. Maintaining accounts Real estate agents are also expected to adhere to certain guidelines which include not facilitating the sale of immovable property which are not registered with the Authority and maintain books of accounts, records and documents among others. The bill empowers the Authority to give directions for specific performance powers to impose penalty for non-registration of projects including imprisonment for continuous violation up to three years and impose penalty in case of other contraventions. Keywords: The Real Estate (Regulation and Development) Bill 2013, Real Estate Regulatory Authority, Ajay Maken, Housing & Urban Poverty Alleviation Minister, real estate sector, housing sector

New real estate bill to help curb malpractices: Maken 6/6/2013                   New Delhi: The real estate regulation bill approved by the union cabinet will promote fair-play in real estate transactions and introduce penal provisions for developers who do not stick to norms, Housing and Urban Poverty Alleviation Minister Ajay Maken said Wednesday. The bill, cleared by the cabinet on Tuesday, would be introduced in the monsoon session of parliament (July-August), Maken said, adding: "The bill aims at protecting the interests of consumers." Maken told reporters here that the bill provides for a uniform regulatory environment and will help protect consumer interests and help in speedy adjudication of disputes. The new real estate development authority will have the power to impose penalties for non-registration of projects, including imprisonment of up to three years for continuous violation and impose penalties in case of other contraventions. Reiterating the government s commitment to make real estate development transparent and consumer friendly, the minister expressed the hope that the proposed legislation would ensure greater accountability towards consumers and significantly reduce frauds and delays. The bill is also expected to promote regulated and orderly growth through efficiency, professionalism and standardisation. It seeks to ensure consumer protection without adding another stage in the procedure for sanctions. It contains elaborate provisions dealing with registration of real estate projects and registration of real estate agents with the real estate regulatory authority. The bill will bring about standardization in the sector leading to healthy and orderly growth of the industry through introduction of definitions such as apartment , common areas , carpet area , advertisement , real estate project and prospectus . It will introduce the concept of using only carpet area for sale as against the present super area and super built-up area and help curb unfair trade practices. The bill makes it mandatory for promoters to deposit in a separate bank account at least 70 percent of the funds, or such percentage as decided by the regulatory authority in consultation with the appropriate government, to cover a project s construction cost.

Cautious buyers rock realty boat 6/1/2013                   Jalandhar — the heart of Doaba region and a vibrant city of Punjab, used to be a preferred place for investment in the real estate sector. But, in the past couple of years, the realty sector in Jalandhar has been passing through a bad phase. Now, even the sale purchase activity of residential and commercial property is on the decline. According to a majority of the real estate agents the drought in the realty sector has been there for the past over two years now and a large number of properties were not finding any buyers.

Real estate BSFI retail and auto dominate Delhi OOH 6/3/2013                   An interesting tracking system put in place by Proof of Performance (POP) has revealed that real estate, BSFI, retail and auto dominated Delhi outdoor media during the first fortnight of May 2013. Hoardings, public utilities and unipoles were the highly used media formats during this period. Proof of Performance Data Services provides an innovative solution that allows organisations to plan, monitor and analyse their outdoor campaigns across the prime markets. Out of the outdoor media sites that POP monitored in Delhi, real estate and allied industries category was the most active sector that advertised during this duration. About 23 per cent of the tracked sites were dominated with real estate and allied industries sector. This was followed by Banking, Financial Services and Insurance (BSFI) which used eight per cent of outdoor media formats. Interestingly, retail sector was also seen heavily in the prime locations of Delhi. FMCG accounted to four per cent of the advertising. Educational advertisements, automobile and ancillaries, consumer durables, and media and entertainment contributed to three per cent each. Healthcare was two percent and hospitality was one per cent. Real estate is known to use the outdoor medium to its optimum in its marketing communication plan. According to POPDS, the top brands of real estate and allied industries were Premia Projects, Supertech Group, Gaursons India, Prateek Group, DLF, TDI, GALAXY, Paras Buildtech, Vardhmans and Sunworld. BSFI was another sector that saw some consistency in Delhi during the tracked period. Punjab National Bank, SBI, LIC, Oriental Bank of Commerce, Ing Vysya Bank, Uco Bank, Bank of Baroda, Yes Bank, South Indian Bank and Vijaya Bank were the most active brands in the Delhi outdoor landscape. PC Jeweller, Meena Bazaar, Shreem Jeweler, Pure Gold Jewellers, Adidas, Azva Jewellery, Zoya Jewellery, PK Diamond, Tanishq and Big Bazaar were the top 10 retail brands advertised on outdoor during this period. Currently the auto sector is aggressive with various new launches in the two-wheeler, four-wheeler and luxury categories and is likely to boost campaign initiatives. This reflected in the way the sector invested on outdoor too. The top 10 automobile and ancillaries brands were Honda Four Wheelers, Hero Motocorp, Hyundai, Volkswagen, Mahindra Motors, Honda Bikes, Sikka Hyundai, Audi, Bajaj and Indian Oil. Panasonic, Tata Sky, Daikin, Voltas, Blue Star, Su-Kam Inverter Batteries, Dish TV, Samsung, Luminous and Hotstar were the top 10 consumer durables brands that made extensive outdoor impressions during the tracked period.

Real estate regulator bill may come in cabinet tomorrow 6/4/2013                   A bill to set up a regulator for real estate is likely to be taken up in the Cabinet tomorrow. The bill has already seen a number of deferments in the Cabinet. The key features of the bill are that builders should register all projects with the state regulatory authority, need to commit and adhere to the completion time frame announced etc. The bill might also make it a punishable crime for builders to come out with misleading advertisements. Besides, it may make it compulsory for property brokers to obtain a license to conduct business. The legislation was once returned by the Cabinet after objections were raised by some senior ministers. There is a possibility that this time, the bill may be referred to a group of ministers if differences persist, those in know of the development said. The bill is likely to clearly define carpet area , and private developers will not be allowed to sell houses or flats on the basis of ambiguous super area . After the bill is enacted, builders will be able to sell property only after getting all necessary clearances. This may address a major concern of buyers about builders not giving exact picture of land acquisition. The bill may also prohibit developers from collecting any money from buyers before completing all necessary permits to start construction on the project. The bill may also say that builders wouldn t be allowed to use pictures of housing projects in foreign countries to lure buyers while advertising a project. They will have to use pictures reflecting the actual project which will be delivered to home buyers. The developers will have to maintain a separate bank account for a particular project and will not be allowed to divert the money for other projects. The Real Estate (Regulation and Development) Bill, which seeks to provide a uniform regulatory environment to the sector, was opposed by some private developers. According to provisions of the bill, the regulator will act only if there is complaint of any deviation from the project details disclosed by a developer on the regulator s website. Meanwhile, the Cabinet is also likely to consider 7th round of wage negotiations for employees of Central public sector units.

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