Purchase of Land - Legal Checklists

Published by Propertybytes Team December 29th, 2005 in Legal Eagle.

Owning a house is an important thing in ones life. However, one needs to be careful while
buying a property to avoid falling into legal hassles. Before buying a land, a number of
checks need to be done to confirm that the land has a clear and marketable title. The legal
status of the land is one of the first issues that should be addressed before confirming a
property.
Title deeds
The first step is to see the title deed of the land, which you are going to buy.
* Confirm whether the land is in the name of the seller and that the full right to sell the land
lies with only him and no other person.
* It is better to get the original deed examined by a lawyer. This is to check details like
whether the seller has permitted any entry/access to others through this land and whether any
other fact has been suppressed/left undisclosed by the owner of the land.
* Along with the title deed, you can also demand to see the previous deeds of the land
available with the seller.
* In some cases, more than one person may own the land. So before registering, check if
there is more than one owner, and if there is, get release certificate from the other people
involved.
Conveyance Deed or Sale Deed
A sale agreement is a document by which the title of property is conveyed by the seller to the
purchaser. Here, conveyance is the act of transferring ownership of the property from a seller
to the buyer. This document will help you ascertain whether the property, which you are
buying, is on land belonging to the society/ builder/development authority in which the
property is located.
Tax receipt and bills
Property taxes, which are due to the government or municipality, are a first charge on the
property and, therefore, enquiries must next be made in government and municipal offices to
ascertain whether all taxes have been paid up to date.
* Inspect whether the latest tax paid receipts have been paid.
* Enquire with various departments of the municipality to ascertain whether any notices or
requisitions relating to the property are outstanding.
* If you are buying a house along with the property, then the house tax receipt should also be
checked.
* Also ensure that the electricity and water bills are up-to-date and if there any is balance
payment to be made, ensure that it is made by the seller.
Encumbrance Certificate

Before buying any land or house, it is important to confirm that the land does not have any
legal dues.
* Obtain a certificate called encumbrance from the sub registrar office where the deed has
been registered, stating that the said land does not have any legal dues and complaints.
* You can check the encumbrance certificate for the past thirteen years or could demand
verify the 30 years encumbrance certificate.
Pledged land
Some people may have taken loan from the bank by pledging their land.
* Ensure that the seller has paid back all the amounts due.
* Ask for a release certificate from the bank, which is necessary to release all the debts over
the land legally.
Measuring the land
It is advisable to measure the land before registering the land in your name. Take the help of
a recognized surveyor to ensure that the measurements of the plot and its borders are
accurate. You could also take the survey sketch of the land from the survey department and
compare for accuracy.
Purchasing land from NRI landowners
A person staying abroad can also sell his land in India by giving a Power of Attorney to a
third person authorizing him the right to sell the land on his behalf. In such cases, the power
of attorney should be witnessed and duly signed by an officer in the Indian embassy in his
province.
Power Of Attorney
Power of Attorney is the power given to an agent by the principal to execute several acts and
deeds for and on behalf of the principal. Stamp duty payable depends on the nature of power
given.
When power is given in respect of a number of acts in a number of transactions it is called
General Power of Attorney. It is always advisable to hold a registered GPA while registering
an immovable property in order to give better title to the property.
When power is given in respect of a particular act pertaining to one transaction it is called
Special Power of Attorney.
Agreement
Once all the matters, financial/otherwise are settled between the parties, it is better to give an
advance and write an agreement. This ensures that the owner does not change his word
regarding the cost as well as make a sale to someone else who offers more money.

* The agreement should be written in Rs.50 stamp paper.

* The agreement should state the actual cost, the advance amount, the time span within which
the actual sale should take place and how to proceed in case of any default from either
parties, to cover the loss.
* The agreement can be prepared by a lawyer and should be signed by both the parties and
two witnesses.
* After signing the agreement if one of the parties
makes a default, the other party can take legal action against him.
Stamp Duty
It is tax, similar to sales tax and income tax collected by the Government, and must be paid in
full and on time.
* A stamp duty paid is considered a legal document
and such gets evidentiary value and is admitted as evidence
in courts.
* Stamp duty is a State subject and hence would vary from state to state.
* When an agreement is to be stamped, it needs to be unsigned and undated one may execute
the agreement only after the Stamp Office affixes stamps on the agreement.
Registration
Registration is the process of recording a copy of a document, transferring the title in
immovable property to the office of the Registrar. It acts as proof that a transaction has taken
place.
* A draft should be prepared before actually writing the document in stamp paper.
Registration is done after the parties execute the document.
* The agreement should be registered with the Sub-Registrar of Assurance under the
provisions of the Indian Registration Act, 1908 within four months from the date of execution
of the document.
* Make sure all the details mentioned are accurate.
* Original title deed, Previous deeds, Property/House Tax receipts, etc plus two witnesses are
needed for registering the property.
* The expenses involved during registration include Stamp Duty, registration fees, Document
writers/ lawyers fees etc.
* Make sure that the deed is registered within the time limit mentioned in the agreement.
* Stamp duty should be paid prior to the Registration.
Changing the title in Village office
The whole legal procedure of buying the property will be complete only if the new owners
name is added in the village office records. An application can be made along with the copy
of the registered deed to the Village office to get this done. Purchase of property is a lifetime
investment. A lot of care is needed from the beginning- right from site seeing till the
registration of the land. Ensure that the documents of title are scrutinised for marketability
with due care by an experienced advocate.

Buying Home/Land - Legal documents

Owning a house is an important thing in ones life. However, one needs to be careful while
buying land/house to avoid falling into legal hassles. A lot of care is needed from
the beginning- right from site seeing till the registration of the land. The legal status of the
land is one of the first issues that you should address before confirming a property. Don't
give any advance before getting confirmation about the legal status of the property.
Before buying a land, a number of checks needs to be done to confirm that the land has a
clear and marketable title. The first thing is to find out the tenure, legal right of the holder of
the land in government records. The tenure or possession right could be freehold, leasehold or
may be held under a government grant or 'sanad'. Freehold land is always most preferable.
The seller should provide all the necessary documents to the buyer.
Title deeds
The first step is to see the title deed of the land which you are going to buy. Confirm whether
the land is in the name of the seller and that the full right to sell the land lies with only him
and no other person. Don't be satisfied with the Xerox copy of the title deed. Insist on seeing
the Original Deed. Sometimes the seller may have taken a loan by pledging the original deed.
It also needs checking whether the seller has permitted any entry/access to others through this
land and whether any other fact has been suppressed/left undisclosed by the owner of the
land. It is better to get the original deed examined by a lawyer. Along with the title deed, the
buyer can also demand to see the previous deeds of the land available with the seller.
Tax receipt and bills
Property taxes which are due to the government or municipality are a first charge on the
property and, therefore, enquiries must next be made in government and municipal offices to
ascertain whether all taxes have been paid up to date. The owner should also possess the
latest tax paid receipts, which you may inspect. Enquiries should also be made in various
departments of the municipality to ascertain whether any notices or requisitions relating to
the property have been issued and are outstanding and not yet complied with.
While inspecting the property tax receipt, it can be noted that there are two columns in the tax
receipt. Make sure that the name entered in the owner's column is correct. The second
column will be for the name of the one who paid the tax. Sometime the owner may not have
the tax receipt with him, in such cases, contact the village office with the survey no. of the
land and confirm the original owner of the land. If you are buying a house along with the
property, then the house tax receipt should also be checked. Also ensure that the electricity
and water bills are up-to-date and if there any is balance payment to be made, ensure that it is
made by the seller.
Encumbrance Certificate
Before buying any land or house, it is important to confirm that the land does not have any
legal dues. It is available as a certificate called encumbrance from the sub registrar office
where the deed has been registered, stating that the said land does not have any legal dues and

complaints. The encumbrance certificate for the past thirteen years should be taken or for
more clarification, you could demand 30 years encumbrance certificate to be checked. If you
still have anymore doubts, you can take a Possession Certificate of the ownership of the
particular land, which is available from the village office.
Pledged land
Some people may have taken loan from the bank by pledging their land. Ensure that the seller
has paid back all the amounts due. Don't get satisfied with the receipt of the payment made. A
release certificate from the bank is necessary to release all the debts over the land
legally. You could buy a land without the release certificate. But if you want to take a loan in
future, the release certificate is a must.
Measuring the land
It is advisable to measure the land before registering the land in your name. Ensure that the
measurements of the plot and its borders are accurate. You can do this with the help of a
recognized surveyor. This will avoid a lots of problems in the future. You could also take the
Survey Sketch of the land from the Survey Department and compare for accuracy.
More than one owner
In some cases, the land will be owned by more than one people. So before registering, check
if there is more than one owner, and if there is, get release certificate from the other people
involved.
Buying land from NRI land owners
A person staying abroad can also sell his land in India by giving a Power of Attorney to a
third person authorising him the right to sell the land on his behalf. But in such cases, the
power of attorney should be witnessed and duly signed by an officer in the Indian embassy in
his province. There is no legal support for Power of attorney signed by a notary public.
Agreement
Once all the matters, financial/otherwise are settled between the parties, it is better to give an
advance and write an agreement. This ensures that the owner does not change his word
regarding the cost as well as make a sale to someone else who offers more money. The
agreement should be written in 50 Rs stamp paper. The agreement should state the actual
cost, the advance amount, the time span within which the actual sale should take place and
how to proceed in case of any default from either parties, to cover the loss. The agreement
can be prepared by a lawyer and should be signed by both the parties and two witnesses.
After signing the agreement if one of the parties make a default, the other party can take legal
action against him.
Registration
The land can be registered in a sub registrar office, after preparing the title deed including all
the relevant information. You could get the title deed written by a government licensed
Document writer. Even lawyers can prepare the deed, but the document can only be computer

printed or typed, not handwritten. Handwritten documents can be prepared by only those who
hold the scribe license.
A draft should be prepared before actually writing the document in stamp paper. Make sure
all the details mentioned are accurate. If there is incorrectness in the document after
registering, a secondary document with the correct details has to be registered and depending
on the incorrectness, the registration expenses will be repeated.
Make sure that the deed is registered within the time limit mentioned in the agreement.
Original title deed, Previous deeds, Property/House Tax receipts, Torence Plan (optional) etc
plus two witnesses are needed for registering the property. Torence plan is a detailed plan of
the property prepared by a licensed Surveyor which will have accurate details of the
measurements including width, length, borders etc. This plan is needed only in some specific
areas. For land costing more than five lakhs, the seller should submit either his Pan card or
Form Number 16 during registration.
The expenses involved during registration include Stamp Duty, registration fees, Document
writers/ lawyers fees etc. The stamp duty will depend on the cost of the property and varies
from Municipality to Corporation to Panchayat. In Panchayat the stamp duty will be 4% of
the cost of the land whereas in Municipality it is 5% and in Corporation 6%. Two percentage
will be charged as the registration fees. Document writers fees also depend on the cost of the
property and varies with individuals. There is a percentage prescribed by the government as
Document writers fee and they cannot charge more than the prescribed limit.
After registration, the registered document will be received after 2-3 weeks, from the registrar
office.
Changing the title in Village office:
The whole legal procedure of buying the property will be complete only if the new owners
name is added in the village office records. An application can be made along with the copy
of the registered deed to the Village office to get this done.

Common Sense Basic Things To Check About Property

1) Check for rate of property currently going on in that location by asking few people/agents
etc so that you will not land up putting up more money in the deal.
2) Check if the home you purchasing has well maintained society registered properly so that
most of the legal matters are taken care and you are at lower risk of being cheated.
3) Check both Original documents and also previous sale docs (if any) before giving token
money for the deal.
4) Check if that property can get Loan from banks, if not why ?
5) If property is very old (Example: 10 to 12 years) you can benefit and save money during
paying stamp duty payment to be given. So pull out assessment letter for Municipal
Corporation for same.
6) Check if the space area for Carpet, built up OR super built up.
7) Check if it CIDCO approved, or alternately if property is old then proper CC, Plan Copy
and saat bara utara (7-12 utara) documents there with seller.
8) Check if all previous dues has been paid like (electric bill, yearly municipal charges for
property, society charges) etc.
9) Ask your advocate to calculate required Stamp Duty and Registration Fees with advocate
fees and be ready.
10) Property clearance note and no Objection certificate (NOC) from society is must before
you register any property.
11) Do not try saving Stamp Duty charges as during litigation in most cases you cannot fight
legally with it.
12) Its always a good idea to meet the society secretary of the property (flat) you purchasing.
This will help you know some legal society pendings, share certificate related, maintenance
related and NOC related to the seller.
13) Check the important documents before you give the token amount for purchasing that
property, some of the documents are Society NOC, Name of electricity bill and Property tax
receipt ( Known as Gharpatti in Hindi), Name of the maintenance receipt, All the previous
sequence of purchase/sell of that property agreement, Full plan copy (floor plan) of that
building and the wing you planning the purchase, Check if the legal government stamps are
seen clearly on same.
14) Most important : Spend on the 100 rupees stamp paper and get the signature, left thumb
print with photo attached on the seller before giving the token amount and make the terms
very clear on registration date and what if for some reasons the deals gets cancelled.

15) Check if the property was already mortgaged before and if the things are already cleared
and settled with the final note of settlement. One best way is to check for all the sequence of
original documents of the flat you purchasing.
16) If you are the first time buyer of say this is your first property to be purchased, keep some
extra cash handy as you might need it to miscellaneous expenses like post registration,
society charges to be paid extra to builder and some renovations etc.
17) Dont rush for a property deal, Neither wait too long. If you find a deal interesting yet in
low cost, find the valid reasons behind same. Common reasons are family dispute, urgent
need of money for which the owner of flat sells at low cost, Or some litigations ?.
18) If you find the deal proper and have checked every aspects, Next is to do all money
transactions in written on 100 or 500 rupees government stamp papers. Add a photo of seller,
with signature and left thumb print across photo with all terms conditions with DATE
written.
19) Hey how about a short video of your conversation ? Seems going far off ha ? Yet this can
be real handy proof in case of any problems in money transactions of that property. Signature
can be invalid, But a photo with left thumb impression or a video cannot be faked.
Things to ask to Builder before buying property
Ask if builder has Title clear papers for property on which flats are built. Easy way is to
ask for IOD (Intimation Of Disapproval) and CC (Commencement Certificate) which makes
it clear that the property you are purchasing is built on undisputed land and is BMC
approved.
Ask if he is ready to give Completion Certificate which is required during registration and
stamp duty process and also during resale in some cases. This Certificate if and important
proof of BMC clearance on building permissions.
Adding to above point, check if the property has OC (Occupancy Certificate) with builder,
If not what are the reasons. Common reasons being the FSI of that property used in some
other constructions. Property without OC faces bank loan problem for common man.
Ask if any well known banks are tied up with builder, If banks and financial institutes like
HDFC, ICICI BANK, GIC etc are already tied up with builder it is a good sign of saving
yourself from non well known and fraud builders.
Always take the first step by asking for sample flat and building plan, This will give you
the look and feel of flat and the amenities and quality of tiles and other items used in kitchen
and bathroom etc. Also ask and see the floor plan that gives the idea about surrounding and
spacing.
Ask for, if any additional charges above the charges they show to you like any legal fees,
parking fees etc which sometimes is not said in first meetings.

Ask when is the project getting completed and which month is the handover of property ?
How will they Charge till then because this will attract PRE-EMI (A kind of interest charged
for part payment of the loan borrowed from bank) this is an extra charge and not same as
EMI. Get dates in written and terms if builder not able to give on time.
Ask the builder about the Carpet area and Total super built up area and what will be
written in Agreement. Also check the height and directions of the flat.
Ask what all utilities and facilities are in built provided upon sale like Fans, Furniture in
kitchen, Home UPS/Inverter etc.
At many far suburb locations of Mumbai like Nalasopara & Virar, some / many properties
dont have OC and instead get something called Collector Passing certificate. This kind of
properties are not entertained by leading banks, yet some small co-operative banks do
sanction loans. Still, its a risky real estate deal.
Note : If you find this list helpful and handy, Kindly add a comment below with any further
points that can help others save had earned money, before going for a wrong property deal.

Buying a Plot Things to remember

September 7th, 2010 Posted in Real Estate
Invest-ment in plot is one of the difficult invest-ment deci-sions for any investor. The rea-son
why it is con-sid-ered as difficult owing to the amount of invest-ment required. Apart from
huge money invest-ment, owning a plot has an emotional aspect. Hence you should be very
care-ful and cau-tious before you purchase a plot.
Before you buy a plot, check these Whether the plot is non-agricultural(N/A) and has a clear title.
Check whether the seller has a right over the property.
Verify whether the lay-out has been approved by the City Development Corporation and
the local body. (Copy of approved layout can be obtained from the City Develop-ment
Corporation CMDA for a nominal fee)
Verify whether the plan has been pre-pared according to the development control rules.
Check whether the details of approved plan have been dis-played at the site.
Ensure that plan-ning permission and building approval has been obtained from City
Devel-op-ment Corporation from the local body concerned.
It is always advisable to hire a lawyer to verify all the above points before you purchase a
plot. But if you are taking a bank loan for buy-ing plot, in that case the bank always does a
due dili-gence and verification before grant-ing a loan. This is always a better option as the
verification done by a bank is very robust and reliable. You can still go ahead and verify the
documents with a lawyer for your own confirmation.

LEGAL REVIEW FOR PROPERTY PURCHASE TRANSACTIONS

When buying a new Property, legal due diligence is essential to avoid getting entangled in
legal issues later. Here are some of the precautions you can take before finalising a property
deal.
Check the title of the propertyThe title of the property forms the foundation of any contract. According to the Indian
Contract Act, no seller can pass on to the purchaser a better title than what he already
possesses. Therefore, the title of the seller must be clear and free from any encumbrance.
Before you buy a property, verify the title of the seller. A search of the records at the subregistrars office may be carried out for documents that may affect the property and may have
been registered .The report will show the recorded owner of title of the property and changes
in the title of the property. If the land is an agriculture land than khata of that land or Kisan
Bahi can be requested from the seller.
Khata is basically a supporting document of title. It is the entry of the present owner in the
municipal records. The absence of khata in the name of a current owner can be rectified at
any time by applying for khata transfer. Khata has become important because it is required
for loans, title opinions, electricity meter name change, registration, etc. Khata is changed
after a sale deed is executed or after a property is inherited through a will, gift, partition, etc.
Sale by holder of power of attorneyIf the sale documents are being executed by a person holding power of attorney on behalf of
the owner, the said power of attorney should be scrutinised closely. The person must not only
possess the power to sell property, the power of attorney should also be validly executed
before the appropriate authority. An agreement holder (as explained above) who also has a
power of attorney to sell the land and/or building is normally a developer. Alternatively, a
person may have paid the entire consideration to the owner and holds on to the property for
some time to sell it at a later date for a profit. The sale will be effected by the power of
attorney holder on behalf of the owner. Such power of attorney must be properly stamped and
registered. It should also not be revoked.
Check the original documents- Always inspect the original documents of the seller and read
all the documents carefully before signing them.
Place a public notice- A public notice may be placed in newspapers calling for claims in
respect of the property being purchased. Claims can come even afterwards, public notice
helps in proving that you purchased the property bona fide and in good faith
Inspect the plans:
If the building is under construction, then inspect the plans to check whether they have been
sanctioned by the concerned authority.
Payment of stamp duty: Always verify documents of title to check payment of stamp duty. If
the ownership of Property has changed hands more than once, examine all the documents for
payment of stamp duty by the predecessors.

If the property belongs to a minor:

In case where the property is owned by a minor, prior approval of the court is required to
enable the minors father/natural guardian to sell the property. In the absence of such
permission, the sale could be voidable at the option of the minor on attaining majority.
Check the minimum tenure of land if taken on lease:
If the flat that is being purchased is in a building built on a land which is given on lease, lease
rent would have to be paid for the land by the flat owners. If the lease is to expire shortly, it is
possible that the lease rent may increase substantially. Hence, the terms of the lease must be
verified before buying the flat.
Other precautions:
Check the occupation certificate: Occupation certificate should be inspected to ensure that the
building has been built legally, especially in case of new buildings.
Check the carpet area:You can verify the carpet area by taking actual measurement of the
property if the same is ready.
Search for records: A search of the records at the sub-registrars office may be carried out for
documents that may affect the property and may have been registered.
NOC of the society: It is advisable to obtain a no dues certificate and no encumbrance
certificate from the society (if the property is in the society) to ensure that all dues are paid
and no mortgage is registered with the society in respect of the property being purchased. In
case the property is in a society, check that all the society forms are duly filled and signed.

Planning to invest in land? Here's a checklist

ET Bureau Jul 6, 2012, 08.34AM IST
Anuj Puri Chairman & Country Head, Jones Lang LaSalle India
Investing in land
Identifying a piece of land that is in close or reasonable proximity to future market drivers is
the first important step in investing in land.

Depending on which city one has chosen, it is possible to identify the future location of
scheduled infrastructure projects, educational institutions, hotels /resorts, townships,
residential and business complexes. Inquire into the legal status of the land and establish if it
is for sale.
Locate the owners and make a purchase proposal. For maximum future returns, its important
to make one's investment while entry costs are low.
Location is equally important if one wishes to buy land to use in a retail venture or a
manufacturing unit, since such ventures are dependent on the immediate access to a customer
catchment and manpower sources.
Things to keep in mind while buying land
The piece of land may be under litigation or may be earmarked for a government project. It
may be categorised as forest land or can be in a coastal regulation zone.
It may also lack basic facilities such as water and power supply, or fall in a politically or
socially challenged sector. It may also be in a zone notorious for encroachment.
Any or a combination of these factors can subtract from or nullify its investment potential.
All negative possibilities should be covered before the purchase.
One should also consider the total cost of acquiring the property, whether the space the land
provides is adequate, what other businesses are active around the site, transport options,
shopping etc. and the history of the site.
Documents to be checked in land purchase
1) The title deed (a legal document proving a person's right to the property).
2) The encumbrance certificate (which proves that the land is not under some sort of legal
dispute).
3) The release certificate (in case the land was previously pledged to someone else).
4) The surveyor's report (to establish its exact dimensions ).

5) If the owner is an NRI, the power of attorney that gives his representative the legal rights
to act on the NRI's behalf.
Profitability
Profitability depends entirely on one's choice of the location, the entry level (cost of the
property) and one's holding capacity.
The market in most known growth sectors will improve within 2-3 years, so the holding
period should be at least that long.
Depending on the location and its current and future market dynamics, it may be feasible to
shorten or extend this period for optimum profitability.
In a growth sector with new market drivers coming in, a plot of sufficient dimensions makes
a lot of sense since it has equal potential for developers from the residential, retail, office and
hospitality sectors.
As an area attains more or more market drivers and begins to saturate, plots increase in value
manifold and can be sold in a seller's, not a buyer's market.
Best locations for buying land in the current scenario
Every metro and tier II city has its growth corridors. In terms of residential land, one should
consider areas beyond the currently favored residential zones (such as the suburbs or far
suburbs ) that are scheduled for residential development in the future.
The NCR region is a good bet, owing to a lot of future industrial and commercial growth.
However, the necessary holding period would be a minimum of 5-7 years.
In Mumbai, where affordable housing is now the new mantra, developers are on the lookout
for land to establish no-nonsense residential projects, so suburbs such Vasai, Virar, Kalyan,
Dombivli and Panvel make a lot of sense.
Tourist spots such as Goa, Dehradun, Nainital, Mussoorie as well as religious places such, as
Haridwar, are suitable for long-term investments.
Land prices
Land prices in many locations will come down as developers who have been holding on to it
for future development release it to the market in order to generate funds for completion of
their ongoing projects, or to ease their debt burden. Demand will also sink as the lack of
liquidity among potential buyers makes itself felt.

Get the documents checked before buy a land

Posted on Jun 4, 2012 3:18PM by KR Iyer
With housing and gold prices hitting the roof and other options like investment in stocks and
commodities may be risky due to external and internal economic factors, the next possible
option one has with little capital is buying a land.
Investment on land has always been the practice for Indians since time immemorial as it
gives assured returns and security for future. If one wants to invest land for investment
purpose, one can buy it on the city outskirts which have high growth potential. With little
investment ranging between Rs 5 lakh to Rs 10 lakh, a land size of 1200-2400 sq ft can be
purchased depending upon the proximity to citys central business district. Plots can also be
bought between Rs 1 lakh to Rs 3 lakh under panchayat limits.With so much illegal land
transactions being reported across various cities, one should exercise extreme caution before
buying a land. Land promoters must provide to the prospective buyers a complete set of legal
documents, which include certificate from a competent advocate, sale deed, encumbrance
certificate for more than 30 years, parent deeds, patta and chitta etc.
One should be careful to check the veracity of documents pertaining to power of attorney. Its
better to engage a lawyer to check the set of documents provided by the land promoter and
get the approval in writing. Its better to pay Rs 2000-Rs 3000 to him rather than regretting
later for buying a disputed property.
Also, one should be careful about the promises given by the promoters on free registration,
patta and other free gifts like gold coins, maintenance for three-five years or planting trees
etc. If the promoter gives all these in writing, its good as most of them prefer not to give it in
writing and prefer oral promises. It is also prudent to get the details of those who already
purchased land from the promoter.
I am working in Singapore and have my home in Bangalore. I recently purchased a land on
Bangalore-Mysore highway. Though the developer got the documents certified by his lawyer,
I preferred to check with my advocate too. After getting the written clearance from him, I
paid the full money and got the land registered on my name. As there are a lot of fly-by-night
developers/promoters are there, it is essential to check each and every document before
buying a land/house. However, the risk is comparatively less in buying a flat from reputed
builders, said Sivaprakasam, director of a leading construction magazine based in Singapore.
Giving a cautious note about the power documents, Ramesh, a flat/land developer in South
Chennai said, We have seen many cases where the power has been changed frequently
among family members. Buyer may not be sure that the power he holds is the final version or
not. This is tricky and one has to go as per the reputation of the seller as this legal document
can be changed and registered as many number of times.
But all said and done, investment in plot is less risky and gives moderate returns. I bought
two pieces of land measuring 1200 sq ft each in Redhills area in south east Chennai ten years
ago for Rs 15000 each. I recently sold both the land for Rs 22 lakh. I will invest half the
amount on land again and other portion will be utilized for my daughters marriage, says
Venkat, who works with a private company in Chennai.

Even if one has to pay a little more, it is better to go with the reputed land promoters rather
than new in the field. Also, one should get complete set of documents by paying an advance
(refundable) and show it to a competent legal authority for legal clearance.
List of documents to be verified

Recent sale deed

Parent documents
Encumbrance certificate for a minimum of 32 years
Copy of patta and chitta
Gift deed of road allocation to the local panchayat or concerned authority
Land approval certificate from panchayat or CMDA
Legal certificate from a lawyer provided by the developer
Copy of Power (if any)

Home Buying FAQs

Buying a home is one of the single most important decisions that a person makes. And
therefore, it is important to know pertinent details and processes that are involved before,
during and after a home purchase. In addition to buying, selling tips, some equally important
guidelines that can help you with the various legal, tax and other technicalities for buying a
home in India.
Some important guidelines for Buying a Home
Making the decision to buy a home, identifying the desired location and property is just the
first and most simple step in your home buying journey. The real efforts start after this point.
Let's find out more about the key aspects that need to be covered during a home purchase.
What are the important documents to be checked before buying a home/property?
Once you have zeroed in on the home of your choice it is necessary to check up on some
important documents closely before proceeding further. Carry out a thorough search and
check out the approved layout plan, the building plan, ownership documents, etc. It is
advisable to get professional legal help to help you verify the validity of the documents.
What precautions need to be taken while buying an under construction flat?
Opting to buy an under construction flat has its advantages as you obviously pay less than for
a ready possession one. But be vigilant and ask the builder to furnish all the relevant papers
and permissions to ascertain the genuineness of the project.

Approved plan of the building along with the number of floors; make sure that the
floor where you have booked your flat has been approved.
Check if the land on which the builder is building is his or he has undertaken an
agreement with a landlord. If so, check that the title of land ownership is free and
clear.
Check the building byelaws as applicable in the area to make sure that there are no
violations of front setback, side setbacks, height, etc.
Check specifications given in the agreement to sell to ascertain whether the builder is
providing the same as promised.
Conduct a thorough background check of the builder and his reputation.
Ensure that NOCs for
Ensure that urban land ceiling NOC (if applicable) as well as NOCs from the
electricity, water and lift authorities has been obtained.

What exactly is built up area, super built up area, and carpet area and what is the difference
between them?

Carpet Area is the area of the flat which does not include the area of the walls.
Built up Area includes the area of the walls
Super Built up Area is generally applicable in multi storied units and includes the
built up area along with the area under common spaces such as the lobby, lifts, stairs,
etc.

Now this is a crucial point to be covered before deciding to buy the flat. Often only the super
built up area is mentioned so that the flat area seems larger than it actually is. It is prudent to
know the exact carpet area to get the true size of your flat.
What is meant by the market value of the property?

Market value means the price at which you can buy a home/property in the open market on
the specified date of execution.
Where can you find the true prevailing market value of the property?
The Sub-Registrar of the area, in whose jurisdiction the property is located, is the person
most apt to for finding the market value of the property.
Who should pay Stamp Duty - the buyer or the seller?
The buyer, as the liability of paying stamp duty is that of the buyer, unless there is an
agreement to the contrary. Section 30, of Bombay Stamp Act, 1958 states the liability for
payment of stamp duty.
Is Stamp Duty payable on the market value of the property or on consideration as stated in
the agreement?
The Stamp Duty is payable on the agreement value of the property or the market value which
ever is higher.
On what legal documents is a stamp duty levied?
Significant legal documents required in property transactions such as Agreement to Sell,
Conveyance Deed, Exchange of property, Gift Deed, Partition Deed, Power of Attorney,
settlement and Deed and Transfer of lease attract Stamp Duty calculated as per the market
value of the property.
Important Legal Documents necessary for property transactions
Owning your own house is more than just a financial decision, it's also an emotional one. So,
don't rush your decisions, be careful, vigilant and get yourself updated on the various
technicalities while conducting your property search, while identifying your choice of a home
and even while finalizing the deal. Importantly make sure that the legal status of the home is
clear and without conflict. This cautiousness will help you avoid a lot of unnecessary legal
hassles in the future. Let us find out more about all the various legal documents necessary for
home buying transactions.
What is a Title Deed?
A title deed is an investigation into the title of the land, over a period of 30 years, to ascertain
whether the property is unencumbered and has a clear and marketable title.

Always insist on checking the original title deed instead of just a photocopy.
Confirm that the seller is indeed the owner of the property.
Ideally you should get the title deed verified from legal experts to be on the safer side.

If the title deed is not clear and marketable, getting finance from recognized financial
institutions will become extremely difficult; get in touch with a financial institution to check
if they would provide a loan for that particular property.
What documents are necessary while buying an under construction home?
While buying an under construction home an allotment letter and development agreement are
the vital documents.

The allotment letter contains details regarding the agreed price, payment and
construction schedule, house plans, delivery date and builder's liability in case of late
completion or problems after possession. It is issued to the buyer upon payment of the
15% of the property value to the developer.

The development agreement is inked between the builder and the landowner and
contains details regarding the terms and conditions on which the landowner has
permitted development of his property.

What documents are necessary while buying a constructed home?

While purchasing an already constructed property it is important to check that the seller has
the title and possession of the property as well as the right to transfer the property.
Also check

That the property adheres to municipal, planning authority requirements

That there are no tenant and that the property is not mortgaged
Whether property tax, society tax, electricity, water bills etc have been paid in full
That you are in possession of original documents of all the necessary documents allotment letter, completion certificate, occupation certificate and all other documents,
given by the original builder

What is Stamp Duty and Sale Deed?

Stamp duty is usually a percentage of the transaction value levied by the state government, on
every registered sale. The agreement to sell clearly states the stamp duty, which is usually
paid by the buyer, and he gets his name registered in the land revenue records. The final sale
deed should be stamped and registered at the appropriate local area office. Both the
developer/seller and the purchaser need to be present at the sub-registrars office, for
registering the agreement.
Home Loan Processing
When you decide to buy a home, the first question that comes to mind is how to finance it?
After all purchasing a house is a major financial consideration. Surely one does not buy a
house by making the entire payment at one go. There are multiple home loan options that are
available to a buyer. Of course, acquiring a home loan is a long process involving many
stages. So let's acquaint with the various steps involved in the home loan procedure.
Formal loan application
The primary step is to fill out a loan application form for the financial institution/bank that
you have chosen to get the loan from. The application form requires basic information
regarding personal, residential, income, professional, educational details. It also includes
details about the house, estimated costs as well as your means of financing the property.
In addition, the banks will require adequate proof in the form of valid documents such as
income proof, address proof, identity proof, bank statements, education qualifications,
property details etc. to support your loan request. The banks ask for such detailed
documentation to basically ascertain your suitability financially and your ability to repay the
loan amount.
Processing fees
All banks that offer home loan facilities charge processing fees which are generally nonrefundable. The fees may vary from bank to bank but it is normally 0.25%-0.5% of the loan

amount applied for. The fees are used by banks to start and maintain the home loan process
including completing the various formalities during the entire period.
Evaluation & verification of the applicant
Upon successful application for a home loan and submitting the processing fees, your
application is evaluated by the bank. During an evaluation the bank will request a personal
meeting with the applicant to ascertain his financial health and repayment capacity.
On through evaluation, the loan application moves to the verification stage where the bank
cross checks all the facts provided by you in the application including a field investigation
process by the bank loan executives for re-checking the facts to confirm their validity.
Repayment verification
The most important part of any home loan process, the verification of the applicant's
repayment capacity is checked thoroughly. The final outcome of your getting a home loan
rests on this stage. If the bank finds that you might be unable to repay the loan they may
reject your application altogether. On the other hand, if the bank, based on their evaluation,
finds that your financial health is sound enough, it may sanction the loan. However,, the loan
may be a conditional sanction or an unconditional sanction based on the bank's evaluation of
your financial strength. If the sanction is conditional, you'll have to fulfill the conditions
imposed before the loan is disbursed.
Offer letter for home loan from the Bank
Your loan processing is on its way. The bank issues an offer letter which contains all the
pertinent details about your home loan including loan amount sanctioned, interest rates
applicable, type of interest - floating or fixed, loan period, repayment mode, as well as all the
terms and conditions associated with a home loan.
If the terms stated by the bank and all the other details are acceptable to you, you send in an
acceptance copy to the bank, which is maintained in their records. If the bank charges any
Administrative fee, it will have to be submitted at this stage.
Property verification
Think you are home free? Not quite... after thoroughly evaluating you, the bank will verify
the property. The reason is that a home loan is a secured loan where the property is used as
collateral. The bank will keep all the original documents related to the property, title, NOC
etc. with them until the loan is repaid. The banks then conduct a legal check of the property to
ensure that it has a clear title. Banks don't lend in cases of disputed properties and unclear
title deeds.
In addition banks also conduct a technical evaluation of the property by sending in qualified
valuators who assess the property on various parameters.
Home loan disbursement
After going through the lengthy period of application, evaluation and verification your loan
request is at last in the final stage. On completion of bank formalities, the registration process
begins. The legal documents are prepared on stamp papers approved by the bank. The
applicant signs the agreement and submits post dated cheques for the agreed term. Once the
agreement is complete the home laon is disbursed as per the agreed mode of disbursal (lump
sum or in stages).

Tax Benefits

Purchasing a home is a big financial decision. Let's find out if there are any tax benefits that
can be availed of against buying a house.
Are there any income tax benefits for property purchase?
If you are getting your house purchase financed via a bank or a financial institution then as
per Section 88 of the income tax you can claim benefit for the principle repayment, interest
on loan is deductible u/s 24 from income from House Property. But these benefits are
available only for residential properties and not for commercial properties.
Should I pay tax if I sell off any residential or commercial property?
Yes, you are liable to pay Capital gains tax on profit arising from sale of a house property.
Can I claim tax exemption on capital gain?
In fact you can. The Income Tax act has made provision u/s 54 & 54A--G of the act whereby
you can claim exemption from tax on capital gains.

NRI Home Buying Guide

With a lot of well settled NRIs looking to have a home or an investment in real estate back in
their country of birth, the volumes of NRI inquiries for home purchases in India have been on
a upswing. Some vital tips for Non Resident Indians for purchasing property in India.
What is the eligibility for Indian Citizens, Foreign Passport Holder or PIO Card Holders for
buying property in India?
Persons of Indian Origin and holding an Indian Passport are entitled to buy any property in
India.
People holding overseas passports, such as British or American, need to apply for a PIO Card
(Person of Indian Origin) at the Indian Embassy or consulate in their country of residence,
before purchasing property in India.
Are any specific government permissions required before buying property in India?
Persons of Indian Origin do not need any approval by the Government of India to buy
immovable properties.
Click here to read about Foreign Exchange Facilities for Residents
Repatriation
Non Resident Indian buying a property through their NRE (Non-resident External) Accounts
can repatriate sale proceeds and rental income to their foreign account after deduction of
Income Tax and Capital Gains on the Sale proceeds as applicable.
Click here to view FEMA notifications
NRE/NRO Accounts
Non Resident Indian need to have an operational NRE and NRO (NRO Non resident
Ordinary Rupee Account) Bank accounts set up. NRE accounts are used for pay outs whereas
the NRO accounts can be used for depositing funds which can be transferred to the NRE for
repatriation as required.
Home Buying Processes for NRIs
If you are an NRI, while conducting property buying transactions for, it is advisable to remit
funds from your bank in your country of residence to the Indian bank where the NRE account
is set up. If you buy the property through the NRE account, then the source of funds is not
required to be disclosed usually to any one as this is your inwards remittance. It is also
advisable to remit a certain percentage of the property amount in your Indian bank account
prior to leaving India, which can be a down payment with the builder or property owner.

Power of Attorney (POA)

Non Resident Indian who come to India once in few years, need to give power f attorney to a
person living in India so that required home buying processes such as registration,
possession, execution of agreement for sale, agreement of leave and license etc, can be taken
care of with ease.
NRI Home Loans
Non Resident Indians (NRIs) can buy property in India with a home loan. Normally they can
get a loan of around 85-90% of the property amount. Personal documents required for the
home loan pre-approval only. Loan disbursement happens only when the property is
purchased.
Documents needed to be submitted by salaried Non Resident Indian for home loans

Loan application form duly filled and signed

Two photographs of both the applicant and the co-applicant with signature on front
and back
Copy of passport - Along with latest visa stamp and date of entry stamp
Proof of residence in India - Electricity bill, Telephone bill, Ration card, Driving
License etc
Copy of credit card - Last six months bank statements of all the NRE / NRO account
in India
Last six months bank statements of bank account held abroad where salary is credited
- Copy of Contract / Employment Certificate Copy of Annual Salary Certificate
specifying the mode of payment (If payment is fully or partly received in cash) Salary
Slips for the immediately past 6 months.

Documents relating to income/ salary need to be attested as true by the employer

Copies of Sanction Letter of Loans availed in India and abroad

Self Declaration of Residential Status
All documents in foreign language to be translated in English.

Things to Know before purchasing a property

Before you buy a flat

Points to be considered before buying a flat:
Check whether the details of approved plan have been displayed at the site.
Check whether the flat has been constructed as per the approved plan.
Check whether the promoter/power of attorney has a right to transfer the undivided shares of
land.
Verify whether the entire undivided shares of land have been transferred by the land
owner/promoter/power of attorney to you.
Check whether the completion certificate issued by the CMDA ( or local Municipality ) has
been obtained after the completion of the building
Below are few of the important things, one should know before planning to purchase a
new property. A handy and simple property purchase checklist one should consider
before taking decisions on buying going for a real estate deal in Mumbai..( some points
are common to other locations )

1) Check for rate of property currently going on in that location by asking few
people/agents etc so that you will not land up putting up more money in the deal.
2) Check if the home you purchasing has well maintained society registered properly
so that most of the legal matters are taken care and you are at lower risk of being
cheated.
3) Check both Original documents and also previous sale docs (if any) before giving
token money for the deal.
4) Check if that property can get Loan from banks, if not why ?
5) If property is very old (Example: 10 to 12 years) you can benefit and save money
during paying stamp duty payment to be given. So pull out assessment letter for
Municipal Corporation for same.
6) Check if the space area for Carpet, built up OR super built up.
7) Check if it CIDCO approved, or alternately if property is old then proper CC, Plan
Copy and saat bara utara (7-12 utara) documents there with seller.
8) Check if all previous dues has been paid like (electric bill, yearly municipal
charges for property, society charges) etc.
9) Ask your advocate to calculate required Stamp Duty and Registration Fees with
advocate fees and be ready.
10) Property clearance note and no Objection certificate (NOC) from society is must
before you register any property.
11) Do not try saving Stamp Duty charges as during litigation in most cases you
cannot fight legally with it.

12) Its always a good idea to meet the society secretary of the property (flat) you
purchasing. This will help you know some legal society pendings, share certificate
related, maintenance related and NOC related to the seller.
13) Check the important documents before you give the token amount for purchasing
that property, some of the documents are Society NOC, Name of electricity bill and
Property tax receipt ( Known as Gharpatti in Hindi), Name of the maintenance
receipt, All the previous sequence of purchase/sell of that property agreement, Full
plan copy (floor plan) of that building and the wing you planning the purchase, Check
if the legal government stamps are seen clearly on same.
14) Most important : Spend on the 100 rupees stamp paper and get the signature, left
thumb print with photo attached on the seller before giving the token amount and
make the terms very clear on registration date and what if for some reasons the deals
gets cancelled.
15) Check if the property was already mortgaged before and if the things are already
cleared and settled with the final note of settlement. One best way is to check for all
the sequence of original documents of the flat you purchasing.
16) If you are the first time buyer of say this is your first property to be purchased,
keep some extra cash handy as you might need it to miscellaneous expenses like post
registration, society charges to be paid extra to builder and some renovations etc.

Things to ask to Builder before buying property

Ask if builder has Title clear papers for property on which flats are built. Easy way is
to ask for IOD (Intimation Of Disapproval) and CC (Commencement Certificate)
which makes it clear that the property you are purchasing is built on undisputed land
and is BMC approved.
Ask if he is ready to give Completion Certificate which is required during registration
and stamp duty process and also during resale in some cases. This Certificate if and
important proof of BMC clearance on building permissions.
Ask if any well known banks are tied up with builder, If banks and financial institutes
like HDFC, ICICI BANK, GIC etc are already tied up with builder it is a good sign of
saving yourself from non well known and fraud builders.
Always take the first step by asking for sample flat and building plan, This will give
you the look and feel of flat and the amenities and quality of tiles and other items used
in kitchen and bathroom etc. Also ask and see the floor plan that gives the idea about
surrounding and spacing.
Ask for, if any additional charges above the charges they show to you like any legal
fees, parking fees etc which sometimes is not said in first meetings.
Ask when is the project getting completed and which month is the handover of
property ? How will they Charge till then because this will attract PRE-EMI (A kind
of interest charged for part payment of the loan borrowed from bank) this is an extra
charge and not same as EMI. Get dates in written and terms if builder not able to give
on time.
Ask the builder about the Carpet area and Total super built up area and what will be
written in Agreement. Also check the height and directions of the flat.
Ask what all utilities and facilities are in built provided upon sale like Fans, Furniture
in kitchen, Home UPS/Inverter etc.

Smart tips to get property documentation right!

Daunted by the paperwork involved in buying a home? Dont let it discourage you, just get it right. In the
end, the trouble you take will only benefit you.

Finding the right home is exciting. Though the process of buying a home can cause heartache, it is
most important that you get the paperwork right.

Identity
You can establish your identity through copies of passports, birth/school leaving certificates, drivers
license or organizational identity/labor cards. You may have to provide a certificate of your educational
qualifications too.

Proof of residence
Copies of a valid resident visa stamped on your passport, utility bills or insurance premium receipts can
provide proof of residence. You will need your employer to certify your designation, length of
employment, passport number and salary slip, along with a copy of your latest work permit. You will
also need three years tax returns and copies of bank statements for the past four months.

Self employed
If self employed, you have to provide a brief introduction to your business or profession and copies of
trade licenses/certificate of incorporation, copies of balance sheets, profit and loss statements for the
past three years and details of current and savings accounts for the past six months.

Proposed buy
The details of your proposed buy are required. These are the builders allotment letter, cash receipts,
construction plans, cost, approved drawing and agreement of sale/sale deed.
Have the deed inspected thoroughly to prevent fraud. Take out homeowners insurance in advance. In
addition, a lenders coverage insurance may be required. Get a completion certificate from the seller as
it tells you that your home conforms to local laws.

Additionally, details of assets and liabilities are required from all applicants. Finally, you may need to
show your PIO card, Power of Attorney to a local representative, guarantor forms along with net worth
and Continuous Discharge certificate.
The paper is as important as the home itself! Dont let this get you down; the thing to remember is that

when the home is finally yours, it will have been worth the effort.

Do you have tips on documentation? How did you keep track of all the paperwork? Are there any
additional documentation requirements for homeowners in your part of the world? Tell us about them!

Beware of land scams in Bangalore

Today, Bangalore is the fastest growing Asian city when it comes to commercial and residential space.
But is the procedure of buying land here above board? Or is there more to it than meets the eye? What
are the factors you should consider before investing in a plot?

Buying land in Bangalore can generate profitable returns in the short and long term as well. Those who
bought plots at throwaway prices a few years ago are earning huge returns today. However there is a
constant concern about the illegal aspects of these deals. Most people are paying property taxes in the
absence of a clear title.
BDAs role
While private layouts are licensed by the Bangalore Development Authority (BDA), plots outside the city
get a sanction from the Bangalore Metropolitan Region Development Authority (BMRDA). The BDA is
required to thoroughly check before sanctioning licenses to private layouts. According to its regulations
49% of the area should be formed sites, 15% reserved for parks and playgrounds, 10% for civic
amenity sites and the rest for roads, drains and other infrastructure facilities.
There have been cases of developers falsely claiming that their lands have BDA approval. Recently a
developer converted a park and play area into a residential locality in Indiranagar, and disappeared
after selling the property. Incidents of bogus land sale are increasing as well. A property in Whitefield
was sold twice. It was an easy con as the land-grabbers produced General Power of Attorney papers
(GPAs) executed by a person who had died 9 years ago.

How do property owners get duped?

Many land owners especially NRIs are falling prey to the land mafia. Since many who invest here are
unable to visit the site, unscrupulous real estate agents take advantage and sell it illegally at a higher
price.

There are also instances where the fraudulent buyer or broker gets hold of copies of your documents
and misuses them later. Some of them even change the value of the transaction.

How to prevent such fraud

There has been a demand for greater transparency in Indian real estate. The Delhi government has
taken the initiative with the introduction of the Land Title Registration System to track property sales.
This coding system enables online property verification and helps in preventing fraud.

The BDA has issued show cause notices to all the unauthorized layouts as per the Karnataka Town
and Country Planning Act. It has also brought out a list of unauthorized layouts to caution prospective
buyers.

In its effort to prevent land scams near the Bangalore international airport site, the Bangalore
International Airport Area Planning Authority has set up a website biaapa.in. This website lists out
approved layouts and proposed land use.

Some key points to remember:

Purchase the property only if the title is clear. Do not go by glossy advertisements. Look at the
proven record of the developer.

Check the mother deed and the sale deed.

Try to get an approved layout plan. This will help in a hassle-free sale of your land in future.

Never sign any document without completely reading and understanding it.

It is always important to have the copies of the original title deed.

Make sure to visit your site occasionally to check on encroachments.

In case your presence is not possible, employ a caretaker.

Acquiring property in India is always fraught with loopholes and possible illegalities. Despite the risks,
NRIs consider it a worthwhile investment. Would you consider buying property in India? Why? If you
have already done so, did you face any difficulties, or was it smooth sailing?

Spotting a Safe House

Tips to buy a house despite land acquisition troubles
Pritam P. Hans and Chandralekha Mukerji Delhi Edition: September 2011

Knowledge is power!
Raj Kumar Pandita, 42, wishes he had more of it. Pandita, like 30,000 others, fell for the
comparatively lower rates being offered by builders in Noida Extension, outside Delhi, and
booked a flat. Months later, he regrets not knowing that the farmers who were made to sell
their land for his project had moved court.
The initial tremor came from the Allahabad High Court, which in May struck down land
acquisition by the Greater Noida Industrial Development Authority (GNIDA), an Uttar
Pradesh government undertaking, in Shahberi village, where his house was to be built.
Pandita, who escaped Kashmir's bloodshed to build a new life in Delhi, fears he may lose his
home again.
Times have seldom been as tough for home buyers. Lenders have increased interest rates a
number of times in recent months. On another front, the land acquisition issue is becoming
too hot to handle.
In Noida Extension, for instance, the court order came at a time the buyers had paid
substantial money to the builders.
EXPERT TIP: How to cut down your home loan burden
The buyers-people like Pandita, AN Singh and Vikas Tyagi-were attracted by the rates. When
flats in the National Capital Region (NCR) were being sold for Rs 3,500-5,000 per square
foot, small- to mid-sized builders in Noida Extension were quoting Rs 1,500-2,000. It was a
dream chance to own a house in the NCR.
Pandita has already paid Rs 20 lakh for a flat priced at Rs 22 lakh. AN Singh, an engineer
with a public sector telecom company, booked a 3BHK flat by taking a loan of Rs 5 lakh
against his provident fund.
The case of Vikas Tyagi, who lives in Rajarhat, a Kolkata suburb, is unique. Tyagi booked
three flats, all as an investment. These included a 3BHK flat and a 2BHK flat for Rs 31 lakh
and Rs 19 lakh, respectively, and a 3BHK flat for Rs 19 lakh. He has taken a loan of Rs 50
lakh to fund his purchase.
Now, the buyers have tough choices to make.
Freehold
A property where the owner has absolute ownership, that is, complete control of the land and the
buildings on it. It is better to buy a property from a seller who has a freehold right.
Leasehold
A property which has been leased for a specific period, mostly 99 years, from an owner with a

freehold right on the property. The lease can be transferred only with the permission of the lessor.
Power of Attorney
It is a legal contract that gives the holder the right to maintain, rent, lease, mortgage or sell a property.
However, the individual holding the power of attorney does not have ownership rights on the
property.
Mutation
It is an entry of the transfer of property title in revenue records of a municipal body. It is only used for
the purpose of paying taxes and, therefore, doesn't provide a legal title to the person.
Sale Deed
It is the main document through which a person transfers his rights on the property to the buyer, who
then acquires absolute ownership. It is also referred to as the conveyance deed.
Title Deed
A document which shows details of ownership, rights, obligations and mortgages on the property.
Ifthere are faults in this document, banks usually refuse to finance the property.
Encumbrance Certificate
An encumbrance certificate is an important document for property transactions. It is also issued for
the purpose of mortgaging a property to avail of a loan. It certifies that the property is not already
mortgaged.

The Supreme Court has asked the builders to either refund the money with an "appropriate interest"
or offer buyers apartments in other projects. It's a tough call.
In case of a refund, the buyer would have paid more interest to the lender than the 'appropriate
interest' he will get. One builder, for instance, has promised to pay 8%, while the home loan rate is
10-12%.
While builders are stalling the refund process saying a clearer picture will soon emerge, GL Sagar,
secretary, Noida Extension Flat Buyers' Welfare Association, says the option of shifting to another
project is not workable. "Property prices in areas such as Gurgaon are higher. So, the builder will
offer projects only in Noida Extension. As more villages are demanding higher compensation, the
fate of all residential projects in Noida Extension is uncertain," he says.
BEYOND THE BROCHURE
What should you look for while buying a property? Generally, buyers focus on the price, area,
number of rooms, location, possession date, etc. There are many other points, such as finances of
the builder and legal clearances to the project, that are equally important.

"The market is going through a tough

time. There is no liquidity, property prices
and interest rates are high, the global
economy is jittery and the domestic
equity market is erratic, making it a
challenging environment for property
developers. In this scenario, it makes
sense to do a financial health-check of
developers and their projects before
investing," says Vineet K Singh, business
head, 99acres.com, a property portal.
Sadly, aspects like the reputation of the
builder, the status of the land title and the
price break-up-which should be key to
arriving at a decision-do not figure on
buyers' checklists. Here, we list some
points and how you, as a buyer, should
look at them.
Builder's Reputation: As a buyer on a
tight budget, who is probably taking a
home loan, properties under construction
are more attractive than the ready-tomove-in ones. They are more affordable
and offer flexible payment options.

WHEN BUYING A READY-TO-MOVE-IN PROPERTY...

A complete legal due diligence has to be done while

buying a ready property.
"Checking legal clearances, payment of municipal,
electricity and water charges, and property credentials
in the local registrar's office is a must, apart from
occupation and completion certificates," says Vineet K
Singh, business head, 99acres.com.
Completion certificate and occupation certificate show
that the property meets local development rules and
are usually the basis on which individual connections
for electricity, water and sewerage are given.
Hence, it is important to verify that these have been
acquired from the authorities. In addition to this, just
as in under-construction properties, check the parent
documents of the land, development approvals,
transfer of development rights to the builder, etc,
before signing the papers.

However, the risks are also higher, as timely project completion will depend on the builder's
resources and efficiency. Therefore, when buying an under-construction property, it is important to
check the developer's delivery record.
Remember that lack of transparency is a good enough reason to delete a project from your short list.
Past performance: "Track record is one of the most important factors to be considered while
finalising a property. A builder with a good reputation and long experience is likely to be a long-term
player and one can expect it to have a professional approach with proper systems and processes in
place," says Ganesh Vasudevan, vice president and business head, Indiaproperty.com, a real estate
website.
Current market prices of a developer's past projects are a good indicator of its standing in
comparison with peers. If you are buying from a new builder, do a more thorough investigation.
Internet makes research easy. Usually, a lot of information is available on blogs, discussion forums
and property websites.

ENSURE A SMOOTH PROPERTY DEAL

1.

How to buy a house safe from land troubles

2.

COLUMN: New land Bill should be balanced

3.

How to cut your home loan burden

4.

Better to go for a joint home loan

5.

Insuring your newly bought flat a must

6.

Invest in realty PE funds to spread risk

7.

Invest in realty stocks after thorough check

8.

Demand for Indian Debt Paper Rising

9.

Invest in serviced appts for higher rental income

10.

'Realty investments help against inflation'

However, this is secondary information.

Since stakes are high when investing in a
property, it is better to do personal
research.
"Enquiries with local brokers and current
customers help," says Singh of
99acres.com.
Financial standing: While the source of
funds and the debt a builder has taken
are important, getting this information is
difficult as most builders are not listed.
"Some builders give these details when
asked, but verification is a difficult task,"
says Vasudevan.
"What one should look for is a company
with strong cash flows as such a company
is likely to execute projects well," says
Singh.
"A buyer should check if the project is
funded by a bank and whether all
approvals are in place," says Mohammed
Aslam, chief operating officer, residential
services, Jones Lang LaSalle India.

Real Estate Rating: Crisil Real Estate Star Ratings (Crest), launched last year, provides key
information about projects in a standardised manner. "This is perhaps the only independent rating
of developers and is very useful," says Vasudevan.
The factors the rating agency looks for are the quality of documentation, construction-related risks,
financial flexibility/viability and the track record of the builder.
"While buyers are interested in additional information and expert opinion, they are constrained by
inadequate information given by the developers, absence of a centralised repository or registry on
projects and lack of objective, credible opinion. Crest guides buyers by giving opinion on the project
they are interested in. The rating indicates the quality of the project," says Akash Deep Jyoti, head,
real estate ratings, Crisil.
CREST also enables buyers to track the progress of the project. "Key project information and
progress photographs are available on our website," he adds.
It is particularly useful for customers who buy a property outside their city of residence. Crisil has so

far rated at least 80 projects in about 20 cities.

This doesn't imply that a project without Crisil rating is a bad choice. If you are interested in such a
project, see table below for Non-rated Projects, to know how you can check a builder's reliability.
BENEFITS OF RATINGS

For investors: Since they give incentives to developers to maintain standards with respect to legal
and construction practices, they are expected to ensure orderly growth of this sector.
For developers: Ratings are expected to help developers mobilise funds for projects and market
them effectively. Also, ratings can be used to present the company in a favourable light to foreign
collaborators as they can help individual and institutional investors frame investment policies.
For lenders: Some banks and term-lending institutions in India use Crisil-Naredco (National Real
Estate Development Council) ratings as cut-off points for limiting exposures. They also use them as
the threshold point for fixing margin requirements, collateral, interest rates and other terms. Source:
Naredco
Checks for Non-rated Projects
In case a developer or a project is not rated, you can adopt the following methods to evaluate the
soundness of the project you plan to invest in:

Start from the developer or project website and collect as much information as possible
Collect market feedback from past customers, brokers and local agents. Check the delivery
record of past projects
Verify the marketability and check for the nil-encumbrance status of the project land
Examine key clauses related to possession date, cancellation, compensation and payment
terms in the draft sales agreement
Go through the balance sheet (if the company is publicly listed) and market news (if
financials not available) to asses the financial viability of the project
Check the credentials of contractors associated with the project
Avoid buying when getting information on the developer and the project is difficult

Legal verifications: It is important that you verify title papers, construction certificate, clearances
from municipal authorities and latest tax receipts. Don't hesitate to ask for copies of all necessary
permissions prior to making a financial commitment.
A clear land title is a must and should be validated. "The buyer should check whether the land on
which the project is coming up has been registered and development rights transferred. A
verification of the last four-five transactions is advised. The time frame can be as long as 50-60
years," says Vasudevan of Indiaproperty.com.

Ideally, even pre-launch bookings should happen after the land is registered. "However, in many
cases, builders announce launches even if approval from municipal authorities is awaited," says
Singh.
You must also ask for the encumbrance certificate in case of old properties. The document lists all
transactions related to a property, be it sale, lease, mortgage, gift, partition or release.
Another good way to confirm that a property is out of legal tangles and has all clearances is to check
if financial institutions are lending for the project. This is because they do the necessary due
diligence before clearing loans.
However, it's not a foolproof system, as was seen is Noida Extension, where a number of large banks
and financial institutions were giving loans.
"It is sensible to get the opinion of a lawyer who specialises in property transactions to check
whether everything is above board," says Vasudevan.
Getting a property registered and maintaining an up-to-date record is a must to prevent fraud and
litigation. The law does not recognise unregistered owners and does not give them any right over
the property.
"Registration of the
undivided share (UDS) of
land, in case you buy an
apartment, is usually done at
the time of down payment
and signing of the
construction agreement with
the builder. In some parts of
the country, the UDS is
transferred to the
cooperative housing society
and not to individual flat
owners. In both cases,
registration of ownership is
important," says Vasudevan.

WHAT IS UDS?

UDS, or Undivided Share, is that part of the land which is associated

to an individual apartment and registered in the name of the
apartments owner(s). This share of land has no specific boundaries
within the total extent of the land on which the apartment is built
and is usually expressed as a percentage of the total land.
Each and every flat in the apartment complex has an associated
UDS. The sum of all UDS is equal to the total land area of the
apartment complex. This ensures that the title of the entire land as
well as the entire building rests with the group of flat owners.
The sale deed transferring the UDS in your favour must be duly
registered before the construction of the flat starts.

Zone of property: In urban

areas, land is regulated
according to zonal classification. Apply to the urban development authority for a zonal certificate to
ensure that the property you plan to purchase is in the residential zone. If the area is listed under
any other category such as commercial or industrial, it is illegal to construct a residential building
there.
Sometimes, agricultural land is converted for non-agricultural use. In such a case, an application is

filed with the tehsildar/deputy commissioner, along with a fee, to get an endorsement order. So, if
the land falls under the converted zone, don't forget to include the endorsement order in your
checklist.
Construction of buildings within 60 metres of highways is not permitted. In coastal areas, one cannot
build within 200 metres of the high-tide zone.
Making the Payment: Besides the price per square foot, which builders flash in advertisements to
tell you how affordable their flat is, there are a number of other costs that can blow up your budget.
When you buy an apartment, you pay for the built-up area. That's a given. But there are costs such
as floor rise charges, infrastructure fee, car park charges, club membership fee and pre-maintenance
charges, too. Therefore, ask for a price
break-up.
PAYMENT OPTIONS

Buying a house is a huge financial commitment. Most

buyers exhaust their entire savings in just paying a
fraction of the total cost of the property. The rest is
generally funded through bank loans. Fortunately,
builders offer different payment options to home
buyers. See which one suits your cash flow.
Down-payment plans: Is the traditional and most
common mode of payment, where one pays 90-95% of
the total cost in 30-90 days from the booking date.
Around 10% comes from the customer's pocket, called
the 'down-payment'. 85% is paid by taking a home
loan and the balance 5% is paid at the time of
possession.
Construction-linked plans: Under these plans, one
pays around 25-30% of the total cost in 90 days from
booking and the balance in instalments as the
construction progresses. This plan is more suitable for
people who want to minimise project development
risks or do not have ready cash in hand.
Time-linked plan: Here, one has to pay a certain predecided proportion of the total cost of the property
according to a calendar that is set by the builder,
irrespective of the stage of construction. This is a nonnegotiable plan. Even if the project gets delayed, the
customers are contractually bound to pay the

Also, there are different payment

schemes which you should know about.
Some builders offer an upfront payment
option at a significant discount or give
incentives such as an additional car
parking and furnishings to lure buyers to
pay more upfront. "There is usually an
early-bird discount at launch which may
be as high as 5-10% of the cost of the
apartment," says Vasudevan. Most large
and reputed builders encourage cheque
transactions and issue appropriate receipts.

instalments, making it a bad payment option.

Flexi-payment plans: This is a hybrid version of downpayment and construction-linked plans. Under this
payment structure, one needs to pay 10% of the
property value at the time of booking and another 10%
within two months of allotment. Up to 70% of the
payment is done in tranches as in a construction-linked
plan and the balance 10% is paid at the time of
possession.

There is also a need to check clauses related to cost escalation and penalty for delayed payments to
avoid trouble.
"If you have to take a loan, opt for a lender which has approved the project and choose the loan
amount and the repayment tenure on the basis of your cash flow and income growth prospects,"
says Vasudevan. Even if the purchase is self-financed, it is good to pay according to the stage of
construction to reduce the risk.
Sample Flats: Developers give wide publicity to 'sample flats.' But how accurate are they in giving a
sense of what your house will be like? "Sample flats are showpiece meant to incite interest and
indicate the 'lifestyle potential' of the unit. They basically serve the purpose of giving the buyer a
sense of space," says Aslam of Jones Lang LaSalle.
Therefore, fixtures in your flat may be different from the ones in the exhibited version. It is a good
idea to seek confirmation from the builder on this with a detailed description of the quality (brands,
models) of materials to be used.
Remember that the builders quote the price of an unfurnished flat. So, if you want any additional
feature that has been shown in the sample flat, you must ask for it. In such a case, an additional
charge will be levied, which will appear in the annexure to the sale agreement.
IGNORANT BUILDERS
What happens when you do everything right but things still do not work out? Let's see what went
wrong in Noida Extension. When the builders were allotted plots, the Allahabad High Court had
ordered status quo on the acquired land.
The builders refuse to accept responsibility. They say the land was allotted by a government body,
which is assumed to have acquired it through legal means and after ensuring clear titles.
The Supreme Court, however, has a different opinion. "It is difficult, if not impossible, to believe that
the builders were not aware of the pending litigation despite the fact that they had successfully

manipulated the change of land use and modification of the development plan in active connivance
with the functionaries of the authority (GNIDA) and the state government," it said.
"(A) note dated 22 October 2009 recorded by the (Uttar Pradesh) Industrial Development
Department shows the officers concerned were in know of the pending writ petitions and with a
view to making infructuous the stay order likely to be passed by the high court the process of issuing
a notification under Section 6(1) read with Section 17(1) was hastened," it said.
RADAR FAILURE
When borrowing from a bank, there appears to be an additional comfort of investing in a property
which has cleared the lender's scrutiny.
Is this true? We cannot be sure. Several affected projects in Noida Extension were pre-approved by
major banks and financing companies for home loans.
How did banks fail to detect the pending litigation and its possible implications? A top executive of a
leading private housing finance company with a large exposure to troubled assets in Noida Extension
compares it with a sovereign default. "The land was sold/leased by the state government. What
more guarantee do you want?" he said, on condition of anonymity.
"Approval to projects on the disputed land was given on the basis of the lease deed executed by the
Noida/Greater Noida Industrial Development Authority with the builders. The ruling rendering land
acquisition by the GNIDA void is an extraordinary development that banks could not have foreseen,"
says Bhaskar Niyogi, chief general manager (real estate, habitat and housing development), State
Bank of India (SBI).
The total exposure of SBI in Greater Noida and Noida Extension is about 0.30% of the total home
loan disbursements in the region. The bank's loans to staff account for 60% of this.
When most banks were lending for buying properties in Noida Extension, why was SBI cautious?
"The NCR market has a good potential, but it is also historically risky because of various unhealthy
practices. In Greater Noida, land was 'leased' to the developers for up to 10 years. The developer
does not get the title till he pays the entire 'premium' it has bid as well as the lease rental. He can
pay in instalments over 9-10 years. Accordingly, it cannot pass on the title to the buyer of the flat till
he clears the GNIDA's dues," says Niyogi.
The lease terms are also onerous. The GNIDA can repossess the land or cancel the lease for a variety
of lapses. If a bank gives a loan, it has to assess the ability of the developer not only to execute the
project but also to pay half-yearly instalments to the GNIDA.
"This assessment is difficult to make in the absence of enough financial information on the builder.
So, SBI has approved very select builders of proven financial strength. Due to this cautious approach,
the bank has practically no exposure to Noida Extension," Niyogi adds.
EXTRA PRECAUTIONS

After committing to finance a large number of flats, the lenders have stopped releasing money for
the approved loans. (Loans are disbursed directly to builders. For construction-linked payment plans,
the amount is disbursed in parts.)
As lenders can finance a maximum 90% of the price of a residential property valued up to Rs 20 lakh
and 80% in case of houses that cost more than Rs 20 lakh, and buyers need to put in the rest before
banks release the full loan amount, a large part of money paid comes from the buyer's own pocket.
Construction-linked payments mean the amount disbursed by banks and financial institutions is far
less than their total commitment (approved loan amount).
BUYERS IN DISTRESS
Buyers hopeful of an amicable solution have their own concerns. Though the builders are not
demanding any payment right now, those who have taken loans are worried they may have to pay
additional interest due to the delays.
"The banks should not charge any interest till the issue is resolved and all EMIs (equated monthly
instalments) should be temporarily stopped," says Rakesh Jain, 35, who has taken a loan to purchase
his first home, a flat in Amrapali Group's La Residentia, in Patwari village.
INVESTMENT OPTIONS
Most stakeholders expect the row to be settled with the GNIDA offering more compensation to the
farmers, who, it appears, do not want their land back.
"If projects in Noida Extension are scrapped, it will result in a public unrest and will have a wide
socio-political impact. The authorities concerned will have to resolve the issue," says the executive
of the housing finance company who preferred anonymity.
Once the issue is resolved, the builders are likely to increase prices for new buyers to make up for
any additional compensation they may have to pay to the farmers.
So, should you invest in Noida and Greater Noida after the land issue is settled?
"If a permanent solution is found, these areas may again become attractive. However, people will
obviously be cautious while buying a property in Noida Extension and Greater Noida. Also, with
prices likely to rise, the demand may be affected to an extent," says Santhosh Kumar, chief executive
officer (business), Jones Lang LaSalle India.
NO PEACE IN SIGHT
Selling land brought a windfall for farmers in the National Capital Region. It also made them feel
cheated when the same land was sold to builders at more than ten times the price they were paid.
The farmers were paid Rs 850 per square metre for their land, which was notified for industrial
development. The land was later sold to the builders for Rs 11,000 per square metre.

The recent court verdicts have resulted in a deluge of demands for more compensation, even from
farmers whose land was acquired decades ago.
Burdened with a large number of such cases, the Allahabad High Court gave the farmers and the
GNIDA time to reach a compromise by 12 August 2011. The large number of farmers' groups made
negotiations difficult.
On 6 August 2011, the GNIDA claimed to have struck a deal with the farmers of Patwari, one of the
affected villages. Hope could not last for even 24 hours as another group claimed the agreement was
a farce as the farmers who had signed the deal were 'bribed' by the GNIDA or had 'vested interests'.
It may take some time before a settlement acceptable to everyone is reached.
WHY THIS TROUBLE?
Land acquisition in India is governed by a law enacted during the British rule. It empowers the
government with 'eminent domain', or the power to acquire private properties, including land, for
'public use' by merely paying compensation. Section 17 of the Land Acquisition Act, 1894, allows the
government to invoke an urgency clause which bars land owners from filing objections.
This clause was used in Noida Extension. The manner in which land was acquired is central to the
legal tussle between the farmers and the GNIDA.
On Shahberi, one of the Noida Extension villages where land was acquired, the Supreme Court ruled
that the urgency clause had been applied without considering the rights of the land owners.
"What the authority (GNIDA) has done in these cases is to initiate the proposal for acquisition of land
for planned industrial development of an area of which land use is distinctly shown in the
development plan as industrial, but the real objective of the entire exercise was to make available
land to the builders by ensuring acquisition otherwise than by agreement so that they may not have
to pay higher price to the land owners and/or their transferees," it said.
NEW LEGISLATION
Amid the controversy over the land acquisition law and the Supreme Court terming it a 'fraud', the
Union government has released the draft of a new land acquisition law.
"If passed by Parliament, the Land Acquisition and Rehabilitation & Resettlement Bill will be a
watershed as it will bring land issues under unified regulatory governance. A national code of
conduct for land acquisition will help developers resolve ambiguity in the manner in which land is
aggregated," says Kaustuv Roy, executive director, India, Cushman & Wakefield, a property
consultancy.
DRAFT LAND ACQUISITION BILL
The draft Land Acquisition and Rehabilitation & Resettlement
Bill, when passed, will replace the archaic Land Acquisition Act,

The new law will increase the

compensation paid to the
affected families manifold. In
case of urban areas, the
compensation for acquired land
will be at least twice the market
value, whereas in rural areas, it
will not be less than six times the
market value.

1894, which was enacted during the British rule.

Key features of the Bill

As even such a high

compensation may fail to satisfy
the farmers, the Bill attempts to
share the benefits of any
subsequent increase in the land's
value with its original owners. If
land is acquired for urbanisation,
as in Noida Extension, 20%
developed land will be offered to
the original owners.
That's not all. If the land is sold
within 10 years of the
acquisition, the original owners
will get 20% of the appreciated
value.
This will make urban
development smooth. It may
also make properties in new
urban pockets more expensive.
The legislation also addresses the
issue of abuse of the land
acquisition law. Once passed by
Parliament, governments will be
able to acquire land only for
public purposes and not for
private use by companies. The
law also forbids change of public
purpose of the land acquired for
private companies.
Considering the protests by
farmers against acquisition of
cultivable land, the Bill prohibits
acquisition of multi-crop
irrigated land by the government.

In case of urban areas, the compensation for acquired

land will be at least twice the market value, whereas in
rural areas, it will not be less than six times the market
value
Both land acquisition and rehabilitation and
resettlement provisions come into play if the
government acquires land for its own use or for private
companies for public purposes
Public purpose of the land acquired for private
companies/industries cannot be changed
Government will not acquire land for private
companies for their own use
Government will not acquire multi-crop irrigated land
for public purposes

Resettlement & Rehabilitation : For land owners as well as

livelihood losers (including landless):

Subsistence allowance at Rs 3,000 per month per

family for 12 months
Monthly annuity of Rs 2,000 per family for 20 years
with adjustments for inflation
Mandatory employment for one member per affected
family orRs 2 lakh if employment is not offered

For land owners

Where land is acquired for urbanisation, 20% of the

developed land will be offered to the land owners in
proportion to their land acquired
Upon every transfer of land within 10 years of the date
of acquisition, 20% of the appreciated value shall be
shared with the original owner whose land has been
acquired
Offer of shares up to 25% of the compensation amount

For livelihood losers

One-time 'resettlement allowance' of Rs 50,000

"The draft land acquisition Bill makes an effort to bring fairness in the process of land acquisition and
outlines an effective resettlement and rehabilitation entitlement to land owners and the displaced

families whose livelihood depends on the acquired land and the scheduled tribes affected by the
process," says Anshul Jain, chief executive officer, DTZ, a real estate consulting firm.
The draft law has a provision for payment of a monthly annuity to the affected families for 20 years.
In addition, one member of the family will have to be offered a job. If this cannot be done for any
reason, the affected family will have to be paid an additional one-time amount of Rs 2 lakh.
Apart from the land Bill, the Union Ministry of Housing and Urban Poverty Alleviation has prepared a
draft Bill for the real estate industry. The Model Real Estate Act, a draft of which is being reviewed
by the Ministry of Law, proposes to establish a regulator for the real estate industry. The regulator's
key function will be to oversee compliance of norms by both developers and property buyers.
"The Bill aims to regulate the country's real estate sector and provide protection to home buyers. It
is expected to bring transparency in real estate transactions. The proposed law has provisions that
protect buyers from unreliable developers, false advertisements, mis-selling of properties and undue
delays in project completion," says DTZ's Jain.
"If implemented, the proposed real estate law can create more transparency at the project level,
with each developer being required to provide the exact status of his project in terms of approvals,
construction progress and material management," says JLL's Kumar.
The proposed law also seeks to establish an appellate authority, providing an alternative redressal
mechanism for buyers. It will also lay down the responsibilities and liabilities of builders.
At present, there is no law to protect buyers from unfair trade practices and one-sided contracts and
payment schedules. Once the new law is implemented, the buyers will no longer be at the mercy of
the developers.
The Land Acquisition Bill, which the government plans to table in Parliament in the monsoon session
(1 August-8 September), is expected to come into force in 5-6 months. The wait for legislation for
the real estate industry will be longer.
By the time the new laws reform the industry, the Noida Extension land acquisition row might have
become history. Agitating farmers would have got higher compensation and the din of trucks,
bulldozers and machinery on disputed land would be making builders and home buyers happy.
A few questions might still remain unanswered. Why did builders fail to take note of the litigation
and court orders on the acquired land? Why did banks detect the irregularity only when it had
turned into a huge problem for thousands of home buyers? Was it the rush to make money from a
scarce resource-land?

The Road to Your New Home

How to reduce interest rate burden when repaying home loan
Pritam P. Hans Delhi Edition: September 2011

Buying a house means spending hours days looking for a suitable property, doing background
checks and finally scouting for the best deal on a home loan (unless you have loads of money
to pay for the house without taking a mortgage).
Comparing home loan interest rates of various lenders is not enough. How do you ensure that
your home loan does not turn out to be too expensive over the duration of the loan?
Interest rates depend on various factors, including availability of money in the market
(liquidity), inflation and monetary policies. If you opt for a floating rate loan, your home loan
instalments will keep changing with fluctuations in interest rates.
In contrast, a fixed-rate loan might mean that your monthly outgo is calculated at a higher
interest rate even when the market is flush with liquidity and funding is cheap. To keep your
total interest outgo at the minimum, you need to know whether it is time to opt for a fixed or
a floating rate loan.
THE RIGHT OPTION
Interest rate for most loans is linked to the lender's base rate, which is decided by the banks
based on the Reserve Bank of India guidelines. As banks review their base rates at least once
in a quarter, your interest rates may go up (or down) based on the call taken by the bank.
MUST READ: How a joint home loan is beneficial
In contrast to floating rates, fixed rates are expected to remain the same for the entire term of
the loan. Fixed rates are generally 0.5-1.5 percentage points higher than the prevailing
floating rates.
Though fixed rate loans are disbursed at a higher rate to compensate for the risk of rate
fluctuations, several banks offer a fixed interest rates only for a specified duration, after
which the loan rate is realigned with the prevailing market rate. For example, fixed housing
loans offered by Punjab National Bank is disbursed at rates higher by a fixed margin as
compared with floating rate of similar duration and remains the same for five years. The
interest rate is revised every five years and the reset rate always remains higher than the
prevalent floating rate by the fixed margin.
"Most banks reserve the right to change even the fixed rate at their discretion under various
conditions and it may not be possible for the clients to verify this," says Vipul Patel, director,
Home Loan Advisors, a mortgage advisory firm.
Advantages, Disadvantages: Fixed rate v/s Floating rate
Click here to Enlarge

Fixed rates provide you protection from rate fluctuations and give you a sense of security and
certainty in terms of your cash flow even when market rates are rising. Generally, fixed loans have
higher exit charges and pre-payment penalties. These may also have more restrictions on partial prepayment.
"Floating loans offer more flexibility in terms of pre-payment, but these also require regular
monitoring for changing interest rate scenario and its impact on your cash flow," adds Patel.
MAKING A CHOICE
The decision to choose floating rate or fixed rate should depend on their difference, various
economic factors and outlook. One important factor that can be easily known is the difference
between floating and fixed rates and the level of interest rates at the time.
"If a person feels that interest rates are high currently and likely to come down, he should opt for a
floating rate," says Renu Sud Karnad, managing director, HDFC.
You should go for a fixed interest rate if the current rates are low. "Interest rates had corrected
sharply from around 14% in 2000 to 7% in 2004 and the difference between fixed and floating rates
was just about 0.5 percentage points at that time. I reckon that was a very good opportunity to take
fixed-rate loans. But not everyone opted for fixed rate as the greed of rates going down further
made a lot of borrowers opt for floating rates," Karnad points out.
You should also factor in your risk appetite while choosing between fixed and floating rates. If you
want stability in terms of cash flow, a fixed loan that remains the same during the entire term might
be a good option. However, you need to ensure that the interest rate is low enough to enter into a
long-term loan contract.
"Depending on your ability to take risks, you should choose between floating and fixed loans or take
a part of the loan on floating rate and the rest on fixed rate," Karnad suggests.
If you are planning to take a loan right now, what should you choose? "In the current scenario, it is
advisable to go in for a floating rate as the upward scope of the rates increasing is about 1
percentage point while the downward scope is estimated at 3-5 percentage points' reduction over
the next couple of years," says Patel. (For the best home loan deals, see Best Loan Buys, Pg 96.)
HDFC's Karnad is also in favour of floating rates. "We may be very close to the high point on interest
rates," she says.
Though fixed rate offers stability and you might be able to lock-in at low rates, it might not always be
the suitable option. "Over a 7-10 years' horizon, generally, the variable rate works well. Hence, it is
advisable to go for a floating rate loan," Patel adds.
Before taking a loan, it might be good idea to consult an expert so that you get the best loan for your
dream home. If interest rates are low and you need a loan for a short term, a fixed rate loan might
be a good choice. For all other scenarios, you better do some quick maths.

Need for a Higher Alert

Why insuring your newly bought apartment is a must
Chandralekha Mukerji Delhi Edition: September 2011

A standard home insurance brochure tells you that the policy will protect the structure of your
house and its contents from perils such as fire, flood and earthquake. In case of loss due to
risks listed in the document, the insurer will pay on the basis of the house's reconstruction
cost. The reinstatement value is calculated on the basis of the built-up area and the
construction cost, generally fixed by the company.
The terms are therefore straight if the house is on your own land. You just have to estimate
the cost of rebuilding ' which should be the sum insured' and the insurance company will pay
accordingly in case of loss.
MUST READ: Insure your house for a safe living
However, if you own an apartment, which is equally exposed to the dangers of getting
partially damaged or completely razed by a natural or man-made calamity, the policy
document may raise some queries in your mind.
Since the policy covers the reconstruction cost, how is the sum insured calculated for a single
flat in a building? Can you buy insurance for such a property at an individual level or do you
have to approach the insurer along with other flat owners? How will the insurer compensate,
since there will be more than one claimant in case of damage to the building? We try to
answer these questions and suggest things to be kept in mind while picking a plan for your
precious abode.
THE COVER
Usually, housing societies get the structure of the building insured. This means you have to
insure only the contents of the house such as jewellery, electronics and furniture. If the
society hasn't insured the building, you can buy a cover individually as well.
The insurance plan for an apartment has the same underwriting principles and sets of
inclusions and exclusions as a policy for an independent house, irrespective of the floor on
which the flat is. There are no additional features either.
"The insurance is done considering the built-up area and the cost of reconstruction," says
Neelesh Garg, executive director, ICICI Lombard General Insurance. If you feel the society's
insurance is inadequate, buy an individual policy as a top-up cover.
"The society not having any insurance or having inadequate cover will in no way prejudice
the claims of an individual flat owner," says Balaji Cuddapah, senior vice president,
commercial lines and risk engineering, Bharti
AXA General Insurance.
When Under Construction...

An insurer can reject your claim if any

commercial activity is being carried out from your
house. But what if the flat is covered under a
common policy taken by the society as a whole
and your neighbour violates the policy terms?
Can this lead to rejection of your claim? The
answer is no. "Such activity by a neighbour will
not affect the claim as long as the flat owner
doesn't breach the contract himself," says Ajay
Bimbhet, MD, Royal Sundaram Alliance
Insurance.
"Even if the insurance has been taken through an
association, each flat owner gets a separate
cover. An insurance contract is concluded based
on declaration by a proposer wherein occupancy
is also declared. So, if your declared occupancy
has not changed, for example from residence to a
shop, the policy will continue and the claim will
not be affected even if your neighbour has
breached the contract," he says.

You cannot buy a cover for an individual

apartment in the course of its construction
since it is part of the entire building structure.
While a building is under construction, it should
ideally be covered under a project insurance
policy taken by the builder.
This would be in place until the construction is
completed as per the approved plan. After the
completion of the project, either individual flat
owners or all of them together, as a society, can
buy the insurance cover.
In case it is a private bungalow or an
independent house which the customer himself
or a builder is constructing, then the owner can
take a cover for the same and change it to a
regular home insurance cover after the
completion of construction.

The only difference between buying a cover for an independent house and an apartment relates to
common areas such as compound walls, staircase, etc.
"The whole apartment, including the common area, can be insured only by the residents' association
on behalf of all flat owners. In such a case, a copy of the policy is given to each flat owner with
details of the sum insured for individual flats. If an owner feels the sum is insufficient, it can be
increased through the association only," says Bimbhet.
If a single flat in a building has been insured the cost of reconstruction of the flat is payable, to the
flat owner, but up to the sum insured. Even if the proposer was the association, there is a provision
to settle the claim with individual flat owners, to the extent of damage to the flat, provided the
association gives a no-objection certificate. However, if the association takes up reconstruction, the
amount will be paid to the association only.
BEFORE YOU BUY
By and large, the covers and premium rates with various insurers are the same. Therefore, shopping
for home insurance is not very difficult. However, there are a few things you should keep in mind.
Adequacy of sum insured: Since sum insured is the basis of compensation, it is important that it
reflects the correct property value. Most people make the mistake of choosing the sum insured
equal to the market value of the house. However, the company pays on a reinstatement basis, which
keeps fluctuating with construction costs.

"On an average, one can take a 10-15% increase in the cost of construction (this differs from city to
city) every year. One can check construction rates from the municipal corporation or real estate
websites. However, arriving at an exact figure is difficult," says Tapan Singhel, CMO, Bajaj Allianz
General Insurance.
A customer can also opt for an escalation clause for increasing the sum insured every year. "The
escalation can be up to 25% of the sum insured," says Karan Chopra, head of retail business, HDFC
ERGO General Insurance.
Tenure of the cover: You can either go for an annual cover or choose a multi-year policy. While the
annual policy will give you the option to revisit the sum insured's adequacy every year, a long-term
policy offers discounts which can be as high as 50%, depending on the tenure.
Service: Though most products look alike, the quality of service may differ. So, it will be wise to
check the claim settlement record of the insurer. A customer-friendly approach to reporting and
handling of claims will be of immense help in the event of a loss.

Join Hands For Greater Access

How taking a joint home loan is beneficial for you
Rahul Oberoi Delhi Edition: September 2011

Joint Loans
Are you planning to take a loan to buy your dream home ? Instead of opting for an individual
loan, you can consider a joint home loan. A joint home loan will not only help you to share
your debt-burden but also allow you to get a higher loan as the income of co-borrowers will
be considered. Did you know that a joint loan can be taken by as many as six co-applicants.
WHO CAN BE A CO-BORROWER?
Joint home loans can be obtained by an applicant along with his/her spouse, parents or own
siblings. "A borrower cannot take a joint home loan with just any person. It is given to
married couples or blood relatives such as parents and children," says Suvrat Saigal, director,
retail banking, Barclays Corporate India.
Some banks allow brothers to take a joint home loan provided they both are co-owners of the
property. A co-owner is a person who has a share in the property and a co-borrower is one
who is liable to pay the loan amount. In some instances, banks insist that co-owners of the
home are also co-borrower in a joint loan.
VK Sharma, director and chief executive officer, LIC Housing Finance says, "If co-applicants
are spouses, co-ownership of property is not mandatory. However, if co-applicants are
parents or siblings, co-ownership of property is compulsory."
MUST READ: Checklist for when applying for loan
Friends, sisters or unmarried partners living together are generally not permitted to apply for
joint home loans. Sejal Patel, financial planner, Bonanza Portfolio says, "Friends, sisters or
unmarried couples can be a co-owner of a property but they cannot be a co-borrower in a
housing loan."
When the spouses are the joint applicants, the term of the loan can be
a maximum of 20 years, subject to the retirement age of the older
applicant. In case the co-applicants are parents and children or siblings,
then the maximum term can be 10 years. Also, if the parents income is
considered for repayment, then the maximum term may be restricted
to the retirement age of the older applicant (in this case that of
parent).

"A borrower cannot take

a joint home loan with
just any person. It is
given to married couples
or blood relatives."
Suvrat Saigal

Director, Retail Banking,

DOCUMENTS REQUIRED
Barclays Corporate India
VK Sharma of LIC Housing Finance explains, in case of of joint
applications, know-your-client (KYC) details such as identity and
address proof of the co-applicants, income proof and proof of co-ownership of the property are
required.

TAXATION bENEFITS
From a taxation point of view, a joint home loan is also beneficial as all co-borrowers can claim tax
deductions under Section 24 of the Income Tax Act against interest repaid and under Section 80C
against principal repaid.
Where two or more persons have taken a joint home loan, every assessee (person paying the
income tax) can enjoy the tax benefits available under the Income-tax Act, 1961 in respect of the
principal and interest paid during a financial year, on proportionate basis.
"The tax benefits that can be claimed would be in proportion of the share that the individuals have
in the loan," says Shilpa Patankar, associate director, KPMG.
In case the property for which the loan has been obtained is self-occupied, then an amount up to Rs
1,50,000 is allowed for deduction on account of interest paid under Section 24. Under Section 80C,
an individual can claim deduction up to Rs 1,00,000 on principal paid.
After ICICI, HDFC offers home loan scheme with fixed rates
"For claiming the deduction against interest payment, the individual should obtain possession of the
property. From an income tax perspective, while the provisions for tax benefits remain the same, the
total benefits available in absolute terms may be higher in a joint loan as compared to an individual
loan," Patankar added.
If a couple jointly apply for a loan for a self-occupied property to be held by them in equal
proportion, then both the spouses would be able to claim deduction on the principal and the
interest repaid separately from their incomes to the extent of their respective share in the house
and the loan.
This would of course, be subject to the overall limits as specified under the act. If the total interest
repayment made by them during the year is Rs 4 lakh and the principal repayment is Rs 7.5 lakh,
then collectively the couple may be able to claim a deduction under section 80C for principal
payment of Rs 2 lakh (Rs 1 lakh each) and under section 24 for interest payment of Rs 3 lakhs (Rs 1.5
lakhs each).
HOW TO REPAY?
The repayment process for joint home loan is similar to that of a regular home loan. The payment,
however, has to be made through one cheque.
Renu Sud Karnad, managing director, HDFC, explains, "Payment can be from a single or joint account
by way of cheques or electronic clearing system (ECS)."
"Another way of repayment could be that the co-borrowers share the number of EMIs between
them such that a specific number of cheques can be issued by one borrower and the balance by the
other," added Suvrat Saigal of Barclays Corporate India.

There is yet another mode of servicing the EMI - one borrower can pay off all the instalments and
thereafter claim refund from the other borrower for his share.
WHAT IF UNDER DISPUTE?
What if one of the co-borrowers refuses to repay the loan? Be warned that the liability to repay the
loan as per schedule is joint and several on the part of each co-borrower, which means each party
would be liable for part of the repayment or up to as much as all of the repayments.
"It does not matter whether the payment is made in the normal course by only one of the joint
borrowers as long as the full EMI is paid as per schedule," says Renu Sud Karnad of HDFC.
In the event of a default, the lender will proceed with the normal recovery process which may
include a legal recourse against all joint borrowers.

Raise a Strong Protective Wall

Getting your house insured is becoming increasingly important
Chandralekha Mukherji

Edition: May 2011

You have installed sophisticated locks, electronic alarms, fire extinguishers, carried out a thorough
police verification of the domestic help and done your best to protect your dwelling. However, we all
know that despite the best security and fire protection measures, the risk of thefts and damages due
to fire can never be completely eliminated. Also, the recurrent earthquakes and tsunami in Japan are
good reminders of how vulnerable and exposed our houses are to natural calamities.
Compared with the measures taken by you to protect your haven, a home insurance policy would
prove to be a much more concrete step in covering such risks. Sadly, apart from a steady demand
from the high networth individuals living in expensive homes where the risks are bigger, the factor
that is driving the sales of home insurance products is it being bundled along with home loans.
"Ideally, every homeowner should buy this product but we see that the demand is mostly restricted
to the urban centres, especially the metros," says S. Narayanan, managing director and chief
executive officer, IFFCO Tokio General Insurance.
"Though, a negative event such as flood or earthquake generates a lot of enquiries, they don't really
have any substantial impact on the sales," adds Karan Chopra, head - retail business, HDFC ERGO
General Insurance. While most people choose the best of dcor and appliances for their home,
there is a perceptible apathy towards home insurance, with very few understanding the need to buy
it.
The cost of securing your home and its contents is as low as Rs 5 per
day for a sum assured of Rs 9 lakh. But this policy will play a vital role to
make good your financial losses in case a disaster strikes. "Yet,
unfortunately, home insurance policies are the least priority for most
and is hardly ever a part of one's financial planning," says Tapan
Singhel, chief marketing officer, Bajaj Allianz General Insurance.

Home insurance policies

consider the cost of
reconstructing your
house and not its market
value.

Think it might be worth picking a cover? Here we list some points to remember when you go
shopping for a home insurance policy.
PROTECTING THE STRUCTURE
The sum assured for a standard home insurance policy which covers your house against perils such
as thefts, floods, fire, earthquakes, malicious damage, etc., has two basic parts. The first part covers
the structure while the second part is to insure its content.

Cost of getting a home

insurance cover of Rs 26
lakh
Keep in mind that
insurance policies cover
your home for its
reconstruction cost and not for its market value. The reinstatement value is calculated on the basis
of the built-up area and the construction rate decided by your insurer. For instance, if the built-up
area of your home is 1,000 sq. ft and the construction rate determined by the insurer is Rs 1,500 per
sq. ft, the sum insured for your home structure will be Rs 15,00,000.
"The idea is to get a cover which will be sufficient to rebuild your house in case any harm comes to
the structure," says Yashish Dahiya, CEO, Policybazaar. com.
Another important factor on which the reinstatement value depends is where the property is
located. "Premium rates are standard. However, the actual sum assured may differ from location to
location due to difference in the cost of construction, informs Sanjay Datta- head customer service,
ICICI Lombard General Insurance.
Therefore, if you live in a seismic or flood prone zone you might have to
pay a higher premium to get the property insured.
Moreover, if you have a basement floor, it might be difficult for you to
get an insurer to cover it. "Sometimes insurers are not willing to include
basements in the purview of the policy as the degree of risk in insuring
a basement is much higher. Also, the maximum cover amount will differ
from one company to the other," says Dahiya.

Those who do not own

the property need not
protect the structure, but
must consider a contents
cover.

INSURING THE VALUABLES

If you live in a housing societyn with insurance cover or have a rented accommodation, you will not
need a policy to protect the structure. However, they must consider buying a home content
insurance cover. The second part of the sum assured of a comprehensive home insurance policy is to
cover its contents. This generally includes valuables such as jewellery, electronic equipments,
furniture etc.
The sum assured for these assets is calculated on the basis of their market valuation. This means, if
there is a loss, the claim will be paid on the value of purchasing a similar new item.
However, 'depreciation' is the word to look out for in this section. "The cost of replacing the lost
item will be settled after deducting appropriate depreciation on the basis of the age of the item,"
informs Dahiya. Also, beware of the several claim limits. "There are sub-limits to the claim one can
make in various sections of the home contents cover segment, though they differ from one insurer
to the other. Jewellery is one item which generally has a sub-limit of approximately 10% of the total

asset cover," says Dahiya. So, if your total content cover is for Rs 1,00,000, in all you can claim is Rs
10,000 for loss of jewellery.
To ensure that you have
enough for paying rent in
case of total loss, opt for
an alternate
accommodation cover.

The exclusion list for this segment is pretty extensive as well.

Important items like cash, stocks or bonds, antique items, collections

and other property documents are never insured by any insurance
company. Also, do not expect to get the claim payment in case the
damage or loss is caused by your domestic help. None of the companies
cover losses where the insured's domestic staff is involved, directly or
indirectly. Moreover, if you are working out of your home, the policy won't cover the section being
used for commercial purposes and you would need a merchant's policy to insure it.
UPGRADE THE COVER
Buying a basic home insurance policy ensures that the building and its contents are protected.
However, if you read the policy wordings carefully, you might feel a need to extend the scope of
coverage beyond the standard protection it gives and fill up the gaps.
The insurance company has fixed the construction rates according to the location of your property.
However, do not forget to revise this value appropriately in case expensive materials like marble or
flooring, wooden work, etc., have been used in your home. This will also apply when you do some
renovation after you have bought the policy.
WHAT'S COVERED

Fire, burglary and theft

Riot, strike and malicious damage
Explosion and implosion
Earthquake, flood, lightning, landslides,
etc.
Missile testing operation and aircraft
damage
Bursting or overflowing water tanks,
apparatus and pipes, leakage from
sprinklers
WHAT'S NOT

Loss or damage by the insured or his

employee
Cash, cards, stock or other documents
Painting, works of art and antiques
Loss or damage to any illegally acquired
property
Loss or damage occurring when the
home remains unoccupied, for a long

Also, remember to extend the cover if your home

is surrounded by a perimeter wall or has a garage.

Include its cost of construction in the sum assured

for the structure. To ensure that you have enough
for rent and other expenses in case of total loss,
opt for the living expenses cover for an additional few hundred rupees.
period (usually 30 days)
Section of the house used for
commercial purposes

"Most of the insurers provide an optional cover for an alternate accommodation cover for a limited
period, which is usually restricted to 30 days," says Dahiya. Some policies also offer riders like the
architect's fee, cost of removing debris, public liability, personal accident, terrorism attacks, etc., by
paying some additional premium. Select these covers only if you need them.
GETTING THE BEST DEAL
The best way to compare and shop for a home insurance cover is to ascertain the types and amounts
of coverage you want and then see what different insurers have to offer. This will help you do an
apple-to-apple comparison of the price quotes.
Opting for a long-term policy of, say, 10 years not only saves you from the hassle of renewing the
policy again and again but can get you a discount on the premium, sometimes as high as 50%.
"Ideally, one can go for a long-tenure cover and avail of discounts. Do ensure that you get your sum
insured increased if the valuation of your property, based on construction rate, increases. Else, it will
become highly inappropriate to be at a lower cover," advises Dahiya.
"Also, home insurance policies cease to exist when the premises are left unoccupied for more than a
specified time period (usually 30 to 60 days). One should choose a plan which offers maximum
protection," he adds.

No penalty on pre-payment of SBI home loans

PTI New Delhi Last Updated: November 25, 2011 | 12:49 IST
Country's largest lender State Bank of India (SBI ) has decided to abolish pre-payment charges on
home loans , giving some succour to borrowers who want to foreclose their accounts.
"We have decided to do away with the pre-payment charges on all kinds of housing loans with
immediate effect," a senior official of the bank said.
The bank has been charging pre-payment penalties only on housing loans with floating interest rates
taken before May 2011, the official said. It has been charging about 2 per cent of the outstanding
amount as penalty if borrowers opted to foreclose their loans.
The decision from the largest lender will prompt other lenders to follow the suit.
The total outstanding home loan of SBI rose to Rs 92,383 crore at the end of September against Rs
86,769 crore in March 2011.
At present, some banks are charging up to 2 per cent as pre-payment penalty on the loan
outstanding, if a borrower settles the full payment before maturity by switching over to another
lender.
No pre-payment fine is charged if borrowers pay using their own funds.
It may be noted that the Reserve Bank has indicated that it would scrap prepayment penalties
charged by banks.

Fraud practices by builders in Bangalore

Posted by pranav_2008 on August 16, 2012

1. Try buying a flat in any premium builder apartment (ready to move in or already given
possession), you will find number of agents who try selling the flat. It is sad that we wont
find a single owner directly who can sell. These flats wont be registered in the owners name
even after 1 year.
I had such kind of experience with Sobha Chrysanthemum.
There are more than 1 ,2 or more agents involved in these scams for selling a single flat along
with the builder.
Once we finalize a flat, The agent will connect to a bigger agent (claiming to be the owner of
the flat). These biggies will take loan from some private banks.
If the deal goes through , These big agents pays around Rs. 150-200 per sq ft to the builder .
So for a 1700 sq ft flat, for supporting such practices , builder gets a token money of 3-4
lakhs easily (the buyer is paying indirectly again)
2. Try negotiating , these small agents tell No flats are available below 80 lakhs in this area,
we cant sell below it. Bloody fellows , who are they to fix the prices. I have the right to
negotiate with the flat owner directly. Take the 1% commission and just leave the scene
3. When these builder launches any project, they have tie ups with these big real estate
fellows, so that they block some of the flats at launch price itself to show ARTIFICIAL
DEMAND. And keep on raising prices as per the number of bookings done. Imagne Sobha
city, Do you think anyone will pay for showing class discrimination inside a project. Initial 4
buildings are low cost, then the high class villas and then super luxury flats. Why should I
pay 1 crore and then live like a low class inside this Sobha City. For outside world yes I
live in Sobha City , but we should have some respect inside the building premises.
Finally the person who needs a accommodation in Bangalore , he usually pays a huge
premium on these flats . Imagine our hard earned money is feeding so many real estate
agents. We work hard , pay off these huge loans and these people enjoy.
Buyers , please dont blindly fall for these people. We are educated enough, think before you
invest in any real estate . Prices wont sky rocket within 6 months in any city. I dont think
now a days anybody is even buying flats . Dont fall for these mal practices.
They will tell that 3-4 people are already eyeing this flat. These are all simply to create a
sense of urgency . Dont fall in these traps.
I have written because I faced such problem, other builders will also be doing the same. Now
a days , in no mood to buy a house in Bangalore. I think housing bubble will burst anytime
soon here, because the end users are very few. We will be paying loan amount for a house
which will become more than 1.2 crore (including the interest rate) and the flat prices wont
increase so much in near future. .Just try to sell , these agents will tell you that prices have
come down to 65-70 lakhs . Try and see.
Pay more than 1 crore for a flat where a basic necessity like Cauvery water is not provided.
Then why to spend so much in a city like Bangalore. Ground water level has reached below
1000 feet, which is not at all potable in most of these areas. Yes , pay for quality construction
but who will fulfill the basic needs ?