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Team iPropUnited

Team iPropUnited
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Geo-Tagging Becomes Mandatory for Property Tax Exemption in Delhi: MCD

In a significant move, the Municipal Corporation of Delhi (MCD) has declared the mandatory geo-tagging of all properties for availing property tax exemption. Failure to comply by January 31 will result in the forfeiture of a 10% rebate on lump sum advance tax payments in the upcoming financial year, warns an official statement.

DELHI: The MCD is urging property owners to promptly complete the geo-tagging process, emphasizing that once a property has been geo-tagged by MCD officers, there is no need for further action. Additionally, property owners not registered with the MCD property tax portal are advised to register, generate UPIC, and geo-tag their properties to avoid potential tax recovery measures and prosecution.

Geo-tagging facilitates location-wise identification of individual properties, enhancing service delivery to citizens by the MCD. This involves assigning unique Latitude-Longitude coordinates to properties on a GIS map, providing a precise location.

To streamline this process, the MCD has introduced a mobile app, Unified Mobile App (UMA), available for download on the Play Store or through the website. Property owners can use the app to log in, select the UPIC for Geo-tagging, and follow step-by-step instructions. The MCD has also incorporated a feature allowing property owners without UPIC numbers to generate them and proceed with the geo-tagging process.

Property owners can submit geotags and photos through the app, contributing to a comprehensive location database. The MCD emphasizes the importance of timely compliance and adherence to the geo-tagging requirement to ensure a smooth and efficient property tax exemption process in Delhi.

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MahaRERA Introduces Groundbreaking Quality Assurance Framework for Real Estate Projects

The Maharashtra Real Estate Regulatory Authority (MahaRERA) is set to revolutionize the real estate industry by implementing an unprecedented framework for quality assurance, inspired by Singapore’s Building and Construction Authority (BCA). This pioneering initiative aims to ensure impeccable construction quality and defect-free apartments for homebuyers, marking the first such framework introduced by any real estate regulatory authority in India.

The innovative mechanism will empower homebuyers, including those without technical expertise, to evaluate a project’s quality and make informed decisions. MahaRERA’s proposal includes third-party inspections at three crucial stages of construction, focusing on advanced phases, pre-handover, and issue verification. Emphasizing technical strength in empanelment criteria, financial considerations will align with market forces.

Initially, the framework will be advisory and optional for projects, with MahaRERA establishing an approved list of third-party quality inspection agencies through a transparent tendering process. Ajoy Mehta, Chairman of MahaRERA, emphasized that this system aims to address defects before possession, reducing the need for post-possession redressal by developers over a five-year period.

The regulator envisions this initiative as a transformative step that will ultimately benefit homebuyers and enhance the real estate sector’s credibility. The proposed framework is open for public discussion, with a consultation paper available for comments until December 31.

MahaRERA’s proactive approach extends beyond quality assurance, as it recently finalized criteria for a unique grading system, the MahaRERA Grading Matrix, for housing projects in the state. This grading, a first-of-its-kind in the country, will make it easier for homebuyers to select projects based on their quality and reliability.

Housing projects registered after January 2023 will be eligible for the grading system, which will be announced biannually starting April 2024. MahaRERA plans to grade both projects and promoters, with details from October 1 to March 2024 considered for the inaugural ratings. This comprehensive approach reflects MahaRERA’s commitment to proactively shape a transparent and reliable real estate ecosystem in India.

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Delhi Mayor Declares No Property Tax for Rural Homes

The mayor clarified that while property tax will be exempted for rural residential areas, it will continue to be collected as usual from all designated commercial areas within the civic body.

NEW DELHI: In a significant move, Mayor Shelly Oberoi declared that the Municipal Corporation of Delhi (MCD) will no longer collect property tax from rural residential areas in the capital. The decision comes as a response to the longstanding grievances of residents who faced challenges during the 15 years of BJP’s administration in MCD.

Addressing the media at a press conference on Saturday, Mayor Shelly Oberoi stated, “MCD will not collect property tax from any rural residential areas in Delhi from now on. During the 15 years of BJP’s administration in MCD, people were greatly troubled by notices for property tax being sent.” The decision, according to Oberoi, was made following discussions with the heads of Delhi’s rural areas and a high-level meeting with property tax department officials.

The mayor clarified that while property tax will be exempted for rural residential areas, it will continue to be collected as usual from all designated commercial areas within the civic body. The move aims to provide relief to the residents of Delhi’s rural regions.

However, Delhi BJP president Virendra Sachdeva claimed that continuous protests and pressure from BJP workers forced MCD to withdraw lakhs of notices issued to villagers. Sachdeva alleged that the withdrawal was prompted by the fear of public backlash in the upcoming 2024 elections. The BJP president further asserted that AAP’s attempt to levy property tax on rural areas was thwarted by the strong opposition of BJP councillors.

During the press conference, Deputy Mayor Aaley Mohammad Iqbal affirmed that property tax would not be collected from all 70 constituencies in Delhi containing rural areas, including both Lal Dora and extended Lal Dora regions. Chaudhary Surendra Solanki, the head of 360 MCD villages, expressed satisfaction that the concerns of villagers were heard and highlighted that individuals engaged in small-scale employment in villages would be exempted from property tax.

The decision is seen as a significant relief for residents of Delhi’s rural areas, and discussions around property tax policies are expected to continue as both AAP and BJP engage in the ongoing political discourse.

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China Signals Strong Support for Property Sector, Country Garden Shares Surge 17%

In a significant turn of events for China’s beleaguered property sector, Country Garden, a major player in the industry, experienced a notable surge of over 17 percent in its shares on Thursday. The surge follows emerging signals from Chinese officials indicating forthcoming concrete support for the troubled property market.

SHANGHAI: Country Garden, one of the largest entities in China’s property industry, had accumulated substantial debts, estimated at 1.36 trillion yuan ($191 billion) in June. The company finds itself entangled in a broader sectoral crisis, joining the ranks of other debt-laden developers, such as Evergrande, which have either defaulted or are at the brink, causing concerns about potential repercussions on the broader economy.

According to reports from Bloomberg News on Wednesday, Country Garden, listed in Hong Kong, is purportedly on a draft list of 50 developers eligible for additional financial support, as revealed by sources familiar with the matter. This list, compiled by regulators, encompasses both private and state-owned developers and serves as a guideline for banks contemplating various mechanisms to support these companies.

In response to these developments, Sino-Ocean Group, another company reportedly on the list, experienced a surge of more than 30 percent in Hong Kong. Other developers, including China Evergrande (up almost six percent) and Kaisa Group (up more than seven percent), also witnessed positive market movements.

As the debt crisis in the property sector continues to escalate, authorities are on high alert, fearing its impact on buyer confidence, housing prices, and the potential spillover into other sectors within an already sluggish economy. Construction and real estate contribute to approximately a quarter of China’s gross domestic product.

In a clear indication of the government’s commitment to supporting the sector, China’s parliament released a report on Wednesday, urging banks to play a more substantial role in aiding the industry. The document, arising from a meeting last month with the head of the People’s Bank of China, calls for increased support for developers to ensure the “guaranteed delivery of buildings.”

Acknowledging the potential risks and challenges, the report also emphasizes the need for financial institutions to “support the reasonable financing needs of real estate companies, reduce the risk of credit defaults, and alleviate the fears of residents purchasing long-term housing.” This move is seen as part of a broader strategy to stabilize the property market and mitigate the broader economic fallout.

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SEBI Board Set to Address Regulation of Realty Platforms and Overhaul ‘Delisting’ Rules

MUMBAI: The Securities and Exchange Board of India (Sebi) is poised to discuss proposals concerning the regulation of investment platforms offering fractional ownership of real estate assets and potential changes to delisting rules during its meeting on November 25, according to sources with direct knowledge of the matter. The capital markets regulator is considering allowing companies to go private at a fixed price.

The move to establish rules for investment platforms providing fractional ownership of real estate assets is prompted by the increasing demand for such products in recent times. Sebi has noted a proliferation of web-based platforms offering these products over the past 2-3 years, allowing investors to bet on properties like buildings, office spaces, shopping centers, and conference facilities.

The introduction of fractional ownership of real estate assets is envisioned as MSM REITs (micro, small, and medium real estate investment trusts), with fractional ownership platforms (FOPs) enabling a group of individuals to pool funds and collectively acquire real estate. These platforms facilitate investment in pre-leased real estate, providing investors with rental yield and the opportunity to participate in potential value appreciation. Returns are distributed to investors after deducting management fees and other charges, with a minimum investment expected to range between ₹10 lakh to 25 lakh.

“Fractional ownership in rental income generating assets is emerging as a very attractive investment opportunity for retail investors. The annuity and capital appreciation of such assets make them a worthy addition to a healthy investment portfolio,” remarked Anuj Puri, Chairman of Anarock Property Consultants.

Popular domestic Fractional Ownership Platforms include Prop Share, Hbits, Strataprop, Asset Monk, and Myre Capital. The largest FOP, managing assets worth ₹960 crore, was highlighted by Sebi in a discussion paper. Internationally, such FOPs have existed since 2015, with US-based Fundrise overseeing assets worth $7 billion for over 3.8 lakh investors.

Sebi has observed the issuance of unlisted securities, representing a fractional investment in specific real estate, to investors. The regulator is concerned about the dependency on Fractional Ownership Platforms for exit options, valuations, liquidity, and transparency, deeming it unfavorable for investors’ long-term interests.

“Such regulation ensures that checks and balances are in place and investor interests are protected. It also discourages fly-by-night operators and expands the industry by improving the availability of capital for quality assets,” commented Puri of Anarock

The Sebi board will also delve into a proposal to allow companies to delist with a fixed price. Currently, companies seeking to delist follow the reverse book-building mechanism, where public shareholders offer prices for buyback and delisting. Sebi believes this process allows operators to corner shares, making it difficult for companies to go private. The fixed price option would apply only to companies with frequently traded shares.

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NCLT orders insolvency proceedings against Fort Projects

The NCLT appointed Kannan Tiruvengadam as the interim resolution professional for the Corporate Insolvency Resolution Process (CIRP) of Fort Projects.

KOLKATA: Last week, the Kolkata bench of the National Company Law Tribunal (NCLT) issued a directive for insolvency proceedings against Fort Projects (P) Ltd in response to a complaint lodged by Emami Realty, a prominent entity within the Emami Group. Fort Projects, a key player in the city’s real estate sector and part of the Fort Group, has 15-16 significant projects in south Kolkata, including notable ventures such as Fort Knox.

The NCLT appointed Kannan Tiruvengadam as the interim resolution professional for the Corporate Insolvency Resolution Process (CIRP) of Fort Projects. Emami Realty, the financial creditor in this case, cited a total default amounting to Rs 91 crore, with the principal being Rs 82 crore and the remaining over Rs 9 crore as interest.

The genesis of the insolvency proceedings can be traced back to a loan agreement in February 2016. Fort Projects, in collaboration with Gagan Dealcom Private Limited and 70 other co-owners/corporate guarantors, sought a financial accommodation/loan of Rs 70 crore from Emami Realty for various developmental projects. The agreement stipulated that the interest rate would be determined by the chairman of the Emami Group of Companies, and the decision would be final and binding on the borrowers. The repayment, as per the agreement, was to be completed within 9 months from the date of execution, inclusive of interest.

The NCLT order, issued under section 7 of the Insolvency & Bankruptcy Code, 2016, states, “The application filed by Emami Realty Limited (financial creditor) is hereby admitted for initiating the Corporate Insolvency Resolution Process in respect of Fort Projects Private Limited (corporate debtor).” This legal action marks a significant development in the financial landscape of Fort Projects and its associated ventures.

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Yamuna Authority Launches OTS Scheme to Facilitate Rs 4,400 Crore Dues Payment

NOIDA: The Yamuna Authority has introduced a beneficial one-time settlement (OTS) scheme aimed at assisting beneficiaries of EWS, LIG, MIG, residential plots, and 7% of Abadi plots in clearing their outstanding dues. The OTS initiative is expected to benefit approximately 10,000 individuals, collectively owing around Rs 4,439 crore to the Authority.

This scheme received approval during a board meeting on June 26 and is scheduled to be implemented from August 1 to August 31, providing a one-month window for eligible allottees to avail themselves of its benefits.

As per the scheme’s provisions, defaulting allottees will be charged simple interest, equivalent to the interest rate applicable at the time of property allotment, and the prevailing interest rates at the Authority. However, no penal interest will be imposed on the allottees’ installments, while other liabilities will remain unchanged.

Eligible allottees who have filed complaints with UP-Rera or any court will be able to participate in the scheme only after withdrawing their cases. The application process for the OTS scheme will be conducted online through the Authority’s portal, which will offer a dedicated link for this purpose.

To ensure a seamless experience for applicants, a joint help desk and call center will be established by the system and property department. The calculation of dues will involve adding the default amount to the original premium dues, with only penal interest being waived.

The OTS scheme is expected to provide significant relief to the beneficiaries, allowing them to settle their dues and regularize their property ownership without the burden of additional penal interest.

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Real Estate Economist Declares End of Housing Recession as Pending Home Sales Show Improvement

Recent data from the National Association of Realtors (NAR) has led a top real estate economist to declare that the housing recession in the US is officially over. According to NAR’s chief economist, Lawrence Yun, the recovery is yet to take place, but the housing sector’s downturn has come to an end. The increase in pending home sales for June, rising by 0.3%, suggests a positive shift in the market.

Yun explained that the presence of multiple offers on properties indicates strong housing demand, which is currently being hindered by a lack of supply. However, he also pointed out that homebuilders are responding to the rising demand by increasing production and hiring workers.

The Pending Home Sales Index, which is based on contract signings, saw a slight boost to 76.8, though it remains 15.6% lower compared to the same period last year. For reference, a rating of 100 corresponds to the contract activity seen in 2001.

As the year progresses, the NAR anticipates that the 30-year fixed-rate mortgage will climb to 6.4%, and then slightly drop to 6.0% in 2024. The current near-7% mortgage rates have discouraged some existing homeowners from moving, and they have also deterred potential homebuyers.

Experts from Moody’s echoed this sentiment, stating in a separate July note that higher rates will continue to impact homebuyers for the foreseeable future, as central banks are likely to maintain tight monetary policies.

Looking ahead, Yun predicts that unemployment will rise to 3.7% by the end of 2023 and then further increase to 4.1% next year.

Nevertheless, Yun also expressed hope that with consumer price inflation stabilizing and mortgage rates reaching their peak, a meaningful decline in rates could trigger a surge in homebuyer activity later this year and into the next.

However, despite some fluctuations in home prices, the tight housing inventory has limited improvements in affordability. While data from Case-Shiller indicates that home prices in June experienced their most significant annual drop since 2012, they have still seen steady climbs for four consecutive months. All 20 major metro markets reported monthly price gains for the third consecutive month.

The new housing data was released a day after the Federal Reserve announced a 25 basis-point rate hike, bringing the federal funds rate to a range of 5.25%-5.5%. The market largely expects this to be the final rate adjustment for the year before the Federal Reserve potentially eases its monetary policy in 2024.

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Property Owners and Agents in Pune are mandated to Furnish Tenant Information to Police

In response to recent security concerns, the Kondhwa police station in Pune has taken a strict stance on tenant registration, notifying property owners and real estate agents that it is now mandatory to furnish tenant information to the police. Failure to comply with this requirement will result in legal action.

This decision comes after an incident involving two suspects, Imran Khan and Mohammed Yunus Saki, who were arrested on July 18 for stealing a two-wheeler. The subsequent investigation revealed that the duo had been on the National Investigation Agency’s ‘most wanted’ list and had connections to Sufa, an ISIS-inspired outfit in Ratlam, Madhya Pradesh.

The owner of the Kondhwa apartment where the suspects resided failed to complete the necessary formalities of providing tenant information on the police portal and to the local police station, prompting authorities to take action.

Officials from the Kondhwa police station held a meeting with real estate agents and property owners to emphasize the rule mandating the submission of tenant details on the tenant registration portal of the Pune police, along with physical copies to the police station. The required documents include photocopies of the tenants’ identity and address proofs, along with the rent agreement.

To ensure widespread awareness, banners have been displayed in residential societies, reminding members to comply with these formalities when renting their spaces to new tenants. The Pune police commissioner’s executive orders clearly state that providing details of tenants, including their permanent address, photos, and address proof, is essential. Non-compliance may lead to action under Indian Penal Code Section 188, which addresses disobedience to orders promulgated by a public servant.

Residential cooperative societies’ office bearers have also been notified to ensure these formalities are fulfilled for new tenants. Additionally, citizens are encouraged to approach the police station if they encounter real estate agents or landlords charging exorbitant safety deposits.

This new measure seeks to enhance security and ensure a safer living environment for residents by facilitating better tracking and monitoring of tenants in the region.

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Supertech Chairman R K Arora’s Bail Plea Dismissed by Delhi’s Patiala House Court

New Delhi: In a recent development, the Patiala House Court in Delhi rejected the bail plea of Supertech Chairman R K Arora. The decision was made after he had been sent to 14 days of judicial custody on July 10, 2023, following his arrest by the Enforcement Directorate (ED) in connection with a money laundering case.

The dismissal of the bail plea was carried out by Special Judge Shailender Malik, who carefully considered the submissions made by both the accused and the prosecuting agency before reaching a verdict.

Arora had sought bail on the grounds that the actions of the Enforcement Directorate were beyond its jurisdiction and in violation of the law, rendering them illegal and void abinitio. He argued that since there was no “proceed of crime” in the instant case due to the absence of a final report in the “scheduled offense,” there could not be any money laundering. Therefore, he maintained that his arrest was unlawful and arbitrary.

The defense contended that the alleged diversion of funds for the purchase of land parcels by M/S Supertech Limited was within the company’s intended purpose and not an act of siphoning or diversion.

Furthermore, it was argued that Arora had appeared before authorities on twelve previous occasions since 2021, and with the investigation complete, the arresting officer had no right to make an arrest based on pretended investigations, which are prohibited by law. The defense claimed that there was no substantial evidence to establish the applicant’s guilt in the violations of Section 3 of the Prevention of Money Laundering Act (PMLA), and the chances of a conviction were remote.

Additionally, it was pointed out that the respondent ED had not provided Arora with a copy of the grounds for his arrest, further substantiating the claim that the arrest and detention were illegal and void abinitio.

The ED had previously apprised the court that 26 FIRs were registered against Supertech Limited and its group companies, alleging criminal conspiracy, breach of trust, cheating, and other offenses. The agency claimed that these companies had cheated around 670 home buyers for a sum of Rs. 164 crores, diverting the collected amount to other group companies for the purchase of properties of significantly lower value.

The agency further alleged that the accused had acquired properties and made illegal gains arising from the proceeds of crime through involvement in criminal activities related to scheduled offenses. The court found a prima facie case for offenses punishable under Section 3 and Section 4 of the PML Act.

Arora’s defense lawyer, RK Handoo, had opposed the bail plea, arguing that his client’s arrest was illegal and no grounds for arrest had been provided. Handoo also highlighted that the investigation had already been completed, making the arrest unnecessary.

Moreover, the defense lawyer asserted that the Enforcement Directorate did not have the authority to take custody of the applicant/accused since they were not police officers under the law.

In light of these arguments, the court decided to dismiss the bail plea, paving the way for further legal proceedings in the case.

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