Property Approvals Documents

If you do not have access to adequate information on legalities of buying a property, the consequence could be a harrowing experience! For instance, if the power of attorney isn’t in the name of the seller, or the legal procedures of the government are not met by the builder, then you might have to bear penalty; it could either be in the form of money or worse, lose the property itself.

Here’s a short guide on almost everything you need to know about legal terms and approvals associated with real estate.

Commencement Certificate

This is a document you need to look for if you wish to invest in an under-construction project. Legally, a builder cannot start construction before receiving the commencement certificate. A commencement certificate is like a permission letter issued to the developer by the local authorities like the municipality after inspecting the plans and engineering of the project submitted by the builder.

Completion Certificate

A completion certificate is a document awarded by the local authorities to the developer. It is a proof that the construction of the property has been completed, taking into account all the legal guidelines and safety norms such as enough space in the compound for an ambulance to turn around and a fire brigade to enter, earthquake resistant technology, etc. Absence of the completion certificate may lead to safety hazards as well as legal matters for the residents in future.

 Occupancy Certificate

OC, which is the acronym for certificate of occupancy, is another document issued by the local authority indicating that the construction of the project is completed in compliance with the laws and safety norms, making it suitable for occupancy. The main purpose of the OC is to state that the building is now in a legally habitable condition.

Clear Land Title

Clear Land Title is the expression used to state that the owner of the respective property owns it free and clear of any creditors. A clear land title is a title without any kind of imposition from creditors or other parties. If a house is on mortgage, for instance, it means nobody has a clear title to it; yet, the mortgage can be released if the mortgage holder is paid a certain amount. So, while selling the house, the seller will demand an amount that satisfies him and the mortgager.

Allotment Letter and Agreement

An agreement is a contract between the buyer and seller to legally record the purchase and sale of the house or property. It is a proof of the transaction that takes place between the two parties in accordance with appropriate laws.

Allotment letter is given by the builder to the buyer in case of an under-construction project. This letter includes details of the flat, all kinds of fees and charges to be paid by the buyer and payment options. Allotment letter is very important if the buyer wants to apply for a loan. The bank finances the property only after submission of the allotment letter.

Meeting legal formalities is very critical to purchasing a property, be it resale or under-construction. Now with a basic know-how of the legal terms and conditions involved in the process, you can confidently make a checklist before finalizing on your dream property!

Indians – 3rd biggest investing community in US realty market

With an $8 billion investment in the US realty market, Indians have become the third biggest international investor community after Canadians and Chinese as per brokerage firm Sotheby’s International Realty.

I think and I believe Indians that live in the US are one of the largest group of millionaires in the America… they are already there and therefore they are investing in real estate,” US-based Sotheby’s International Realty President and CEO Philip A White told PTI.

According to US-based National Association of Realtors data Indians had spent $5.8 billion in fiscal 2014 to purchase real estate in that country. China topped the list of foreign nationals with $22 billion in in realty for the one year period ended March 2014.

The spate of investments in the international real estate market is not only limited to US markets but also to London and Dubai where Indians have invested 1 billion pounds and $2 billion respectively in the first half of 2015.

In August 2014, Sotheby’s International Realty signed an agreement with Indian firm RealPro Infra Pvt Ltd towards establishing its Indian arm under the name North India Sotheby’s International Realty, aimed towards catering the increasing luxury real estate demands of resident and non-resident Indians.
Informing the details about the investments made by the Indian community in the US, North India Sotheby’s International Realty Founder and President Ashwin Chadha said: “After Canadians and Chinese, Indians are third largest international community in US in terms of real estate investment and had invested around $8 billion last year.”

Speaking about their optimistic expectations of the Indian luxury real estate market, White said, “India as a country has huge potential to be the top nation in terms of business for us. It may take few years to get there.

“Indians searching property globally, I think we all know Indians put big premium on real estate as a tangible asset to protect from inflation or number of things so I think they keep on looking at the opportunities,” White added.

Elaborating about their domestic arms operation so far, North India Sotheby’s International Realty Founder and CEO Amit Goyal said they have already tied up with some established players in the sector including Tata Housing, Sobha and Max Group’s Antara Housing.

Indian-Real-Estate

With more than 6, 00,000 units of inventory in India’s top cities, the situation is alarming. One in three houses constructed is unsold, despite builders, agents, online broking houses and now even e-commerce websites trying to allure consumers with lucrative schemes and offers.

Urbanization as a trend has just touched the tip of the iceberg and India has a huge demand for houses. Industry experts anticipate this number at 50 million houses in next 10 years. Strangely, over supply of inventory in the second most populous country in the world is an irony.

Unlike some European countries where the population growth is in the red, India is experiencing a very high rate of population growth and selling of ready houses really should not be a problem. More people are getting more liquid money to invest and a good number of immigrants moving in and out of major cities are some of the factors that drive real estate demand in the country. It is indeed paradoxical that there is supply and there is demand, yet no transactions.

What is driving this ironic situation is a market that is going through a transition – from high-growth expectations of the past to a mature market that will see rational returns.

Builders are still reminiscing on the hay days which were driven by a high growth rate economy where projects used to get sold in a jiffy and give big returns in a short time. Some ambitious developers still working on similar lines; they launch one project, and use the capital from initial sale to start a second project, then use the proceeds from the second project to start a third and then a fourth and sometimes even a fifth. They entwine cash-flows and spread themselves thin. However, they fail to realize that this strategy would not work in a slow economy; projects do not sell as fast, spelling doom on all subsequent projects.

Developers must focus on delivering as delays not only impact returns but also impinge on the investor sentiment in general. On the whole, the market experiences a downward curve and gets caught in the cycle of price stagnation, rising unsold inventory, incomplete projects, resulting in poorer returns on investment.

Builders, in their enthusiasm have gone way outwards than currently supported by the market. Moreover, with inadequate and restricted alternatives of structured financing, they raise funds from small time real estate investors who demand quick and hefty returns. Developers have no option but to artificially inflate the basic cost of the property. The markets have reached a point where these prices have gone beyond the affordability of end consumers. They would however, not reduce the prices as this will break their investor network. Whether the inventory remains unsold or is in the hands of speculative real estate investors, there is a desperate search for end-customers and real users – who remain elusive.

The Indian real estate industry is transitioning from a “pre-launch” to a “build and sell” model like developed markets which are the signs of a maturing industry. From traditionally a seller’s market, real estate in India is now a buyer’s market. Each buyer has lots of similar options to choose from. If buyers start dictating the markets, ask for transparency in the real estate pricing, a paradigm shift is bound to take place. Existing online players will struggle and will be forced to reinvent themselves. We’ll see transaction-oriented models vs simple listing-based models that will bring transparency that consumers so want today.

Crompton Greaves board approves selling Mumbai land for Rs 496 crore

The board of directors, Crompton Greaves, has approved the sale of a portion of the company’s land parcel admeasuring approximately 53,000 square meters situated at Kanjurmarg, Mumbai to Evie Real Estate for an aggregate sum of Rs 496.48 crore. This definitive step has been taken as a part of the company’s continuous asset optimization initiatives.

Crompton Greaves is a pioneer in the management and application of electrical energy along with providing electrical products, systems and services for utilities, power generation, industries, and consumers. The company operates in around 85 countries, with employee strength of more than 15,000.