11 - 09 - 2020

CREDAI Bengal Daily News Update | 11.09.20

India’s realty sector growth hinges on COVID-19 containment

”These are dynamic times but there are positive signs aplenty. Since May, each month has

been better than the previous month for our industry. Growth prospects look brighter for

the remaining months of 2020 and 2021,” said Ramesh Nair CEO & Country Head, India,

JLL.

The rebooting of the real estate sector across assets classes will depend on India’s ability to

survive or contain the spread of Covid-19 pandemic in the country.

According to industry experts at the CII Realty & Infrastructure Conclave 2020, the real estate

sector is seeing silver lining and expects 2021 to witness broader recovery across assets classes.

”These are dynamic times but there are positive signs aplenty. Since May, each month has been

better than the previous month for our industry. Growth prospects look brighter for the

remaining months of 2020 and 2021,” said Ramesh Nair CEO & Country Head, India, JLL.

Post the opening up of economy retail footfalls have started picking up, office absorption levels

and residential sale conversions have improved and industrial production accelerated. Hotels

have also seen double digits occupancy.

”There will be a combination of core and flex, long term and short term and urban and

suburban. One thing is for sure, the future will be hybrid. Apart from creating a human

experience, landlords and corporates will have to provide a sense of safety and security, ” said

Nair.

According to the experts, there are significant levels of capital available and investors continues

to see real estate as a valuable asset class. ”The longterm fundamental of office space remains

intact and in the last 10 years, office rents in India stayed constant due to rupee depreciation,”

said Kaku Nakhate, President & Country Head, India, Bank of America Merrill Lynch.

While there are certain uncertainties, the worst is behind for the residential sector. ”Residential

sales in the affordable and mid segments are expected to show the fastest turnaround.

Consolidation in the market is likely to further speed up. Post the opening up of the economy

we have seen the best sales in August in the last three years, ” said Abhishek Lodha MD and

CEO Lodha Group.

Real estate has been one of the hardest-hit sectors with buyers deferring purchase, leasing of

office and warehousing slowing down and retail and hospitality segment witnessing all-time

low footfalls over the last six months. ____________________________________________________________________________________________

Newspaper/Online The Economic Times ( online )

Date September 10, 2020

Link https://economictimes.indiatimes.com/industry/services/property-/-cstruction/indias-realty-sector-growth-hinges-on-covid-19-containment/articleshow/78042752.cms

Looking for possession? Approach RERA or NCLT?

The cause of delay or failure to complete a project are numerous. It could be inadequacy of

financial resources, siphoning off funds or either delay in approvals. In NCR, projects which are

70-90% complete are stuck either due to the disappearance or failure of the builder. Some

projects do not even have a foundation. "Projects are stuck because money has been diverted.

There are chances of revival if the buyers are united," says Amarpal, an Insolvency

Professional.

Both RERA and NCLT function differently. Hence, as a homebuyer, before approaching either

you should be well versed with the procedure and related consequences to make the right

decision.

RERA provides a platform to homebuyers where they can complete their project themselves by

forming an association; and under NCLT, an IRP (Insolvency Resolution Professional) is

appointed who facilitates the completion of the project.

How can homebuyers complete stuck projects under RERA?

* Initially, RERA pressurises the builders to complete projects if they are not completed within

the stipulated time period, and post the complaints of homebuyers

* If the project is not viable then RERA can deregister/cancel the registration of the project,

following which it sends a notice to the developer

* RERA adds the builder and his project to the defaulter's list which is shared on the RERA

website

For instance, in Sector 143, Noida, homebuyers of Festival City, Phase-1, have been demanding

possession for two years. There are about 700 commercial buyers in this project.

While buyers have paid 70-90% of the money, the work on the project has not yet completed.

The builder had informed UP-RERA of being unable to complete the project. After which, UP-

RERA cancelled the registration of the project.

Builders can raise 'Objection' within 60 days, which did not happen in this case. Booking in this

Rs 374 crore project started in 2012. The possession was due in 2016. On investigation, RERA

found that buyers' money was used in other projects.

After the cancellation of registration, RERA gave first chance to the buyers' association to

Newspaper/Online The Times of India ( online )

Date September 10, 2020

Link https://content.magicbricks.com/property-news/looking-for-possession-approach-rera-or-nclt/115986.html

complete the project. Like Festival City, many homebuyers' associations are completing

projects in NCR. "Several projects are in the pipeline to get deregistered. In fact 3-4 projects

have already been deregistered. Advertisements are issued, so the buyers’ associations can show

interest and we can consider their proposal. The same is happening in the case of the Festival

City project," said Balvinder Kumar, Member, UP-RERA.

If buyers back out of taking responsibility for completing the project, then other developers will

get the chance to complete the same. If homebuyers are accomplishing the work with their

money, then RERA monitors the same. It is not easy for homebuyers to complete such big

projects. They usually face problems in funding and coordinating with other buyers. According

to RERA, consent from 60% homebuyers is needed to complete a project. If homebuyers fail to

complete a project, then RERA has to do so.

When should home buyers complete their project?

* When almost 85-90% work is complete

* Where one tower or a phase requires completion

* If the project is cash flow positive

* Check the financial health of the project

* Small projects of 200 units

* Disputed projects should be avoided

* Condition of the project

How do buyers get possession through NCLT or court?

Many times, when buyers don't find a solution in the RERA court, they approach NCLT.

However, taking action against builders under the Insolvency and Bankruptcy Code (IBC) is

challenging.

The government has made several amendments and changes in IBC. Earlier, individual

homebuyers could also go to NCLT. Now, homebuyers have to gather 100 or 10% buyers of the

same project, to take action against a builder.

For instance, if a builder launches 1300 units and possession of 400 units is given, then to file a

complaint in NCLT, from these 400 units, only 100 buyers or 10% of the people can form an

association. Under IBC, the complainants also have to be from the same project only then can a

petition be admitted against the builder. Projects like Lotus Panache in NCR are being built

through the IRP after NCLT's decision.

* NCLT was formed in June 2016, to address issues of insolvency and bankruptcy

* According to Section 5(8), IBC has declared home allottees as financial creditors

* Pre-condition of minimum 100 allottees has been imposed under Section 5(8) of IBC

* In case of insolvency of a company, the matter goes to NCLT

* The IRP tries to revive the company within 180 days

* If the company revives within this period, it can start functioning again

* If it does not revive, the company is declared bankrupt

Reverse insolvency is the process when buyers get together and complete their project,

explained Amarpal, an Insolvency Professional. In such cases, the existing builder invests as a

promoter and the project is completed. "Outside bidders can also bid to complete the project and

deliver it. NCLT works on completion of the project and it is the best way to revive it".

It is not an easy task to complete the project on your own, whether under the supervision of

RERA or facilitated by the IRP. But today, homebuyers are opting for these methods and

procedures to get their houses so the burden of paying EMIs and rent at the same time can be

stopped.

______________________________________________________________________

Developers in Gurgaon focus on plots as Covid-19 changes

consumer preference

The Haryana government had announced Deen Dayal Jan Awas Yojna (DDAY) for small

towns in 2016 and, last year, it extended the scheme to include Gurgaon.

Gurgaon’s leading real estate developers with large land banks are focusing on launching gated

colonies of residential plots instead of high-rises in a bid to cater to the shift in consumer

preference in the wake of the coronavirus pandemic.

DLF, Raheja, Alpha Corp and Signature Global are among the builders who have turned to

plotted colonies as, apart from the surge in demand, there is no construction cost involved and

they also avail a tax benefit from the state government.

The Haryana government had announced Deen Dayal Jan Awas Yojna (DDAY) for small towns

in 2016 and, last year, it extended the scheme to include Gurgaon. Under the scheme,

developers applying for licence get tax benefit and waiver on internal and external development

charges.

“At least 10 developers in Gurgaon are coming up with the plotted colonies to avail benefit of

the scheme and most of them have received tremendous response. This was an untouched

market in Gurgaon with most of the developers focusing on luxury segment. The affordable plot

scheme has changed the game and more developers will monetise the land through this as there

is no heavy capital involved and it is less time consuming,” said Anckur Srivasttava, chairman

of real estate advisory GenReal Property Advisers. ..

In high-rises, monetisation tends to be slower as buyers prefer ready-to-move properties, said

industry executives.

“The demand for affordable housing and plots at affordable rates has increased manifold. We

are offering plots in 80-150 metres size and since developers can now construct four floors and

sell them independently, we are selling floors too at some places,” said Pradeep Aggarwal,

chairman, Signature Global Group.

Raheja Developers has delivered two projects under the DDAY scheme and has applied for

more licences.

“There is a lot of demand and it is also easy to monetise. The plot starts as low as Rs 18.7 lakh

with the size ranging between 68 and 144 square yards. This makes the product very affordable

for homebuyers,” said Nayan Raheja, executive director, Rakheja developers.

Newspaper/Online The Economic Times ( online )

Date September 10, 2020

Link https://economictimes.indiatimes.com/industry/services/property-/-cstruction/developers-in-gurgaon-focus-on-plots-as-covid-19-changes-consumer-preference/articleshow/78022210.cms

DLF, the country's largest developer, had told investors during the last quarter earnings call

about its plan to monetise plots under the scheme of the Haryana govt.

“The difference being that in the last few months, there have been certain policy interventions

by the Haryana government which have made the monetisation of these pieces slightly more

friendly. And that’s what we are trying to leverage,” said Ashok Tyagi, whole-time director,

DLF NSE 1.76 %. “We believe we have the right land bank to be able to launch these projects.”

Under the DDAY scheme, the state plans to promote high-density plotted colonies across

Haryana and has made it mandatory that all the projects be completed within a period of seven

years from the date the licence is granted.

Alpha Corp, which has projects in Karnal and Meerut, said that its Alpha International City,

Karnal (AICK) in Haryana will offer small plots in gated society to avail benefit of the

government’s scheme. “The township is designed to cater to the needs of its residents, both

basic and aspirational, scaled to a global level. We will now launch small affordable plots and

with rapid rail connecting the township with Delhi, we expect a lot of NCR (National Capital

Region) residents to invest,” said Santosh Agarwal CFO, Alpha Corp.

____________________________________________________________________________________

South Delhi civic body to charge upto Rs 2 lakh for installing lift at

CGHS, DDA flats

The charges will range from Rs 1-2 lakh depending upon the category mentioned in the

classification for calculating property tax.

South Delhi Municipal Corporation (SDMC) may soon start levying development charges at

the time of granting permission to DDA flats and cooperative group housing societies for

installing lifts. A proposal in this regard was passed in the standing committee meeting on

Tuesday.

The charges will range from Rs 1-2 lakh depending upon the category mentioned in the

classification for calculating property tax. At present, only Rs 5,000 is being charged as

processing fees at the time of submission of an application.

Lifts are installed in common areas, which are maintained by civic bodies.

"Lifts require frequent maintenance and hence, the charges will be applicable. Other cities like

Mumbai, Pune and Ahmedabad take a number of charges, including development cess, FSI

cess, fungible FSI and development charges, while sanctioning the building layout plan. The

cash-strapped south corporation needs funds for maintaining common services and areas,"

stated the proposal.

_____________________________________________________________

Newspaper/Online ET Realty ( online )

Date September 10, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/south-delhi-civic-body-to-charge-upto-rs-2-lakh-for-installing-lift-at-cghs-dda-flats/78035790

DTCP set to map illegal colonies in Gurugram

“This will not only keep the menace of encroachments in check, but also help in better

coordination with other departments and police,” said DTCP director KM Pandurang

The department of town and country planning has decided to mark areas where illegal colonies

had come up in the past in the new district map. It is also designing a software to prepare a

database of areas where the administration has conducted demolition drives.

The move, officials said, would help keep a check on encroachments. “This will not only keep

the menace of encroachments in check, but also help in better coordination with other

departments and police,” said DTCP director KM Pandurang

District town planner RS Batth, who has been given the charge of preparing the district map,

said, “We have already started working on the map. It will have areas with a larger

concentration of illegal colonies and areas where we have undertaken demolition drives.”

Over the past few months, the enforcement team of the DTCP has carried out 55 demolition

drives. Around 200 illegal clusters that had encroached on 750 acres have been razed. The area

included 250 buildings, 25 farm houses and over 300 under-construction structures.

Officials said since DTCP could not carry out any demolition drive for two months of the

lockdown, illegal clusters mushroomed in several parts of the city. The areas where such

colonies had come up included Suncity, DLF Phases 1, 2 and 3, Pataudi, Farukkhnagar,

Bilaspur, Binola, Badshapur, Bhondsi and sectors 34, 69, 70, 72.

Apart from this, the department is also devising ways to keep records of illegal colonies. “As of

now, there are no proper records of illegal colonies in Gurgaon and those we have demolished

in the past. In the absence of records, the department often faces difficulty in taking action

against developers who construct illegal structures again. A software is being designed, which

will also bring in transparency to the system,” said Batth.

The officer also said that once the software was developed, key processes such as notices,

action taken reports and other details would be available online. “All details of demolition

drives and illegal colonies will be uploaded online so that it becomes easy to identify the area

when drives are carried out in the future. The details related to court proceedings and stays will

also be available online,” Batth said.

________________________________________________________________

Newspaper/Online ET Realty ( online )

Date September 11, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/dtcp-set-to-map-illegal-colonies-in-gurugram/78052153

EOW arrests person for constructing flats on government land in

Delhi

A case was registered in 2011 on the complaint of the then principal secretary-cum-

divisional commissioner, GNCT, New Delhi, the police said.

A 56-year-old man wanted for his alleged involvement in a conspiracy to facilitate the sale and

encroachment of government land nine years ago has been arrested by the Economic Offences

Wing of the Delhi Police, officials said on Thursday. The accused, Diler Singh, is a resident

of Chhattarpur village, they said.

A case was registered in 2011 on the complaint of the then principal secretary-cum-divisional

commissioner, GNCT, New Delhi, the police said.

According to the complainant, an unauthorised apartment block, Neelakanth Apartment, was

constructed on evacuee property bearing no. 152 to 154, Chhattarpur village and flats were sold

to general public, they said.

The apartment has been built on government land (Compensation Pool Property) bearing plot

no. 152 to 154, and private land bearing plot number 151 and 108 in Chhattarpur village, they

said.

"During investigation, it emerged that the accused person got executed the sale documents of

two plots number 151 and 108 in Chhattarpur village from Diler Singh and his brother Kulwant

Singh," Joint Commissioner of Police (EOW) O P Mishra said in a statement.

"Plot No. 151 was owned by Pritam Kaur and plot no. 108 was owned by Bola Singh, father of

Diler Singh and Kulwant Singh. Diler Singh is the nephew of Pritam Kaur and real brother of

Kulwant Singh residing at plot No.150," he said.

Using the forged General Power of Attorney, Diler Singh sold plot no. 151 to Rajesh Dhir and

further transferred it to builders without any demarcation of the properties, Mishra said.

Taking the benefit of non-demarcation, the builders occupied the adjacent plots no. 152-154

illegally and constructed the apartment. Later, they sold the flats to general public, the officer

said.

Newspaper/Online ET Realty ( online )

Date September 11, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/eow-arrests-person-for-constructing-flats-on-government-land-in-delhi/78052274

Two other accused persons, Jagbir Singh and Ganesh Kumar, who sold the flats and executed

sale documents in favour of buyers, have already been arrested in the case, he added.

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