ROLE OF PLANNERS IN TOWN PLANNING

(Advocates, Property advocates in Bangalore, Property lawyers in Bangalore)

The goal of city and regional planning is to further the welfare of people and their communities by creating convenient,equitable, healthy,efficient, and attractive environments for present and future generations. Plans are required at different levels of government.Plans can take several shapes, from comprehensive plans to historic preservation plans.Plans are presented to community officials, who review,revise and adopt them for action.

Once the plan is adopted, the planner's job becomes very imperative in the implementation of the plan and in coordinating among many groups.The tools of planning implementation include land use controls and economic development strategies.Through an analytical planning process,planners consider the physical,social and economic aspects of communities and examine the connections between them.Professionally trained planners also analyze issues such as transportation,land use, housing, recreation and open space, natural and cultural resources, community services, population, and economic development based on the established goals.

Planners plan with a highly collaborative process.Through this collaborative process they help to define the community's vision for itself.Planners work with many types of communities-small villages, large cities, sub-urban towns, etc.This vision is created not only from what the community members want, but is based on an understanding of the problems and resources at hand. The planners provide this analysis and help the community to look at the options it has for development and change. Planners must be technically competent and creative and show both hardheaded pragmatism and an ability to envision alternatives to the physical and social environment in which we live.

The planning process typically involves performance of a number of roles. The town planners normally keep in mind the following aspects while formulating their planning strategy:

1. Physical design and the way in which the cities work.
2. Data on present and future trends in population, employment and health.
3. Plans and the process by which they are developed.
4. Techniques for involving a wide range of people in making decisions.
5. Programs of the local, state and federal governments.
6. Legal foundation and techniques for land use regulation.
7. Interaction between the economy, transportation, health and human services, and land use regulation.

Some planners function primarily as technical analysts or researchers, others as designers or program developers, others as agents of social change, and still others as mangers or educators. Some planners will make a career in only one of these roles. 

In short, the following are the functions which the planners do perform invariably:

1. Planners formulate plans and policies to meet the social, economic, and physical needs of communities,and they develop the strategies to make these plans work.
2. Planners develop plans for land use patterns,housing needs,parks and recreation opportunities,highways and transportation systems,economic development, and other aspects of the future.
3. Planners work with the public to develop a vision of the future and to build on that vision.
4. Planners often function as mediators among conflicting community interests. They may also become facilitators in their professional judgment to help to identify the best resolutions to the issues creating conflicts.
5. Planners analyze problems, visualize futures, compare alternatives, and describe implications, in stimulating and thought-provoking ways.

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ASSESSMENT YEAR, PREVIOUS YEAR, PERSON, TYPES OF INCOME

(Advocates, Property advocates in Bangalore, Property lawyers in Bangalore)

Section 2(9) of the Income Tax Act 1961 refers to the assessment year.

ASSESSMENT YEAR:

This is a period of 12 months commencing from 1st April and ending on 31st March 2003. Thus it is spread over to calendar years. The assessment year 2003-2004 means and covers the period from 1st April 2003 to 31st March 2004.The importance of the assessment year is that which law is to be applied for computation of Income; allied procedural matters and the rates to be applied will be as per laws in force as on first day of the relevant assessment year. During the assessment year the income returns filed for the previous year will be assessed by the department.

PREVIOUS YEAR:

Section 2(34) of the Income tax act 1961 defines the previous year. It is a financial year immediately proceeding the assessment year. This covers 12 months spread over two calendar years commencing from 1st April and ending on 31st March.

The previous year for the assessment year 2003-2004 is 2002- 2003, starting from 1st April 2002 and ending on 31st March 2003. But it need not necessarily cover 12 months in case income earned for the first time from any source; but always ends as on 31st March. If one get a salaried job from 1st Oct 2002, the previous year for salary income starts from 1st October 2002 and ends on 31st March 2003.

Often, the assessment year and previous years are confusing. Simply note that your income of this financial year (2003-2004) will be assessed and taxed by the department during next financial year(2004-2005),which is called assessment year.

PERSON:

1. The word person has a wide meaning under income tax act which is defined under section 2(31) it includes:
2. An individual
3. A Hindu undivided family
4. A company
5. A firm
6. An association of person or a body of individuals
7. A local authority
8. Every other artificial judicial person (Trust, deity)

RESIDENTIAL STATUS:

Residential Status determines the scope of taxable income. The status has to be determined as per the procedure prescribed in section 6 of the income tax act. Residential Status is broadly of three types:

1. Resident and Ordinarily resident
2. Resident but not Ordinarily Resident
3. Non-resident.

HEADS OF INCOME:

Income of any kind will be included under anyone of following categories;

1. Salaries
2. Income from House Property
3. Profits and gains from business or profession.
4. Capital gains
5. Income from other sources.

This classification is very important, since an income to be included under a particular head cannot be included under another head. Rents received from house should be included under income from house property but not under income from other sources.

Income from house and capital gains are relevant in case of house property. Section 22-27 deal with income house property and section 45-55A deal with capital gains.

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BURDEN ON FLAT PURCHASERS

(Advocates, Property advocates in Bangalore, Property lawyers in Bangalore)

Blow to Construction of Residential Sector:

Unfortunately the union budget has treated the construction sector badly.The union budget has included the some additional services in the service tax net; like site formation, demolition, and like services of survey of land and making maps, construction of planned residential completes with more than 12 dwelling units developed by the builder.The service tax is 10% with 2% education cess. Thus the effective tax would be 10.20%.

Not a Burden to Builder:

The service tax will be collected by the service provider, that is builder. But he will pass on the tax component to the purchaser of residential units, thus it is the end user who will ultimately suffers.

Apart from passing the service tax component to the purchaser, the builder enjoys certain tax exemptions on full profits earned in developing and building housing projects under section 80-IB of Income Tax Act.The exemptions are allowed subject to certain conditions, such as

1. The project should have a plot area of minimum one acre.
2. Residential unit should have maximum built up area of 1000 sft in Delhi, Mumbai and 1500sqft in other areas.
3. The built up area for commercial and shopping should not exceed 5% or 2000sqft whichever is less.
4. The project should have approved before 31 March 2007 and should be completed within four years from the end of the financial year in which project were approved.

Further minimum plot area requirement of one acre is waived in case of housing projects carried out in accordance with the schemes framed by central or state governments for reconstruction of or redevelopment of existing buildings and notified by the board in this behalf for redevelopment of such dwellings.The exemption is allowed for five years on 100% profits.Thus on compliance of certain conditions builder need not pay any income tax on the profits earned on construction of dwelling units;and passes on the service tax to the purchasers.So levy of service tax on flats is not a burden to the builder who coolly pockets the profits, which are exempted from income tax.

Purchaser will suffer:

The ultimate man who has to bear the entire load is the end user, who at most times might have spent all his life time earnings to have a roof over his head. Not only the service tax, but other decisions of government have exposed the purchaser to higher expenditure.

The Cabinet Committee on Economic Affairs has recently decided to allow 100% foreign direct investment in construction sector;where the minimum area to be developed is 25 acres(10 hectares) in case of serviced housing plots. Already owing to various restrictions on approval of layouts, prohibition on betterment charges in the city/town municipal areas the price of lands have increased by 50% in the last six months around the city.With allowance of 100% FDI in construction sector, the price of the land will further increase around Bangalore.

25% Duties:

In certain cases old structures have to be demolished. The lands have to be surveyed and mapped.The builder starts construction of multi-storied apartment after approval of plan. Many times each of the above activities are done by different agencies and each activity attracts services tax of 10% and education cess of 2%.The budget has proposed to exempt service providers whose gross annual turnover does not exceed 4 lakhs, but this exemption is a pittance for construction sector.Seldom a builder/promoter prefers to construct less than 12 dwelling units. With increase in land price and levy of service tax on construction and related activities, the cost of dwelling units will increase making it not easily affordable by end users.

Apart from actual purchaser price of the flat, the purchaser has to bear 10% towards Stamp Duty and Registration Charges, 4% towards sales tax, and 10.20% towards service tax and expenditure towards Katha, tax assessment etc, thus purchaser has to pay nearly 25% of purchase price towards various taxes, duties and levies. May the middle class may have to forget about owning a flat and settle for a small houses like sardine packs, without any proper facility.

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PLAN WELL FOR A PERFECT HOME

(Advocates, Property advocates in Bangalore, Property lawyers in Bangalore)

To own a shelter is everyone’s ambition. Some may own a home when they are very young,many when they are young, and a few when they are not so young.There are numerous people who do not have their own shelter.They pass their lives in rented premises.Through proper planning anyone can achieve the ambition of owing a comfortable house.The concept of construction is a little complicated one.It is,therefore, necessary to understand the basics of house construction before embarking on your dream project.

Locating the Land:

When you decide that you need a house, you then need to find a good plot of land.Always remember three important points.They are Location, good location and best location.Before deciding on the plot, you have to make a survey of various plots and then select a suitable of your choice.If you do not like the position or shape of a land, do not buy it. If you exert a little more, you will definitely find a suitable piece of land at a convenient location.

Engage Professionals:

It is always advisable to engage professionals to get quality work and its timely completion.Architects, civil engineers, structural engineers,real estate agents, banks, plumbers, electricians and building contractors contribute a lot in shaping your dream house. You have to select the right people to carry out the work.Engaging professionals will be a little bit expensive, but it will ensure that you do not have to face problems in the long run.If you do not wish to spend money on the professional, you may save a portion of the project cost but in the long run you might face problems.

Purchase of Land:

Once you have selected a piece of land and decided to purchase it, your advocate will take care of all the legal aspects of the land as to its title and genuineness, and prepare a document called Agreement to Sell to be entered in to between the purchaser and the seller. Agreement to Sell is a very important document particularly for buying a property.The period between the Agreement to Sell and the Sale Deed is a crucial period for the purchaser. An eminent advocate, who has long experience in property matters, must deal with such important matters.Most importantly you should not follow a ready-made model agreement or sale deed,or engage a real estate agent or a job typist, as some people do.You may save some money but in the long run particularly when you plan to sell the property; chances of facing acute problems cannot be ruled out.

Vaastu Shastra:

The concept of building a house on Vaastu principles has become very popular.Vaastu Shastra is the science of construction.In the present times it has assumed a distorted meaning.People attribute Vaastu to good luck and bad luck.Whether you believe in Vaastu or not, it is advisable to construct the house on Vaastu principles, since an adverse remark on the location of the rooms might psychologically affect the owner if something untoward happens in the future.The main door,pooja room, kitchen, bath room, toilet, storage space, bed rooms, overhead and underground water tanks and septic tanks must be according to Vaastu Shastra, particularly so when you put up the house for sale at a future date.

House Plan:

Making a plan is very important. It is the first step in the entire process before the construction work starts. Once you settle on a budget and spell out exactly what you want, the professionals can take over. The architects will assist you in designing your home, right from the hall, kitchen and bathrooms of the house.The rooms are so designed that they are proportionate to the area available for construction. From the design you can see how each room will look. You may change the plan as many times as you like before making the final drawing.Once the final drawing is prepared it should not be changed.The architect makes the plan with the future in mind.You may do the construction work in stages depending on your budget.If you have money to construct only the ground floor you may do so.You may or may not construct additional floors but it is a must to have a total plan for two or three floors as per the floor area ratio (FAR).Constructing a house without a plan will cause many problems in various stages of construction.Do not take the advice of illiterate ‘maistries’ who do not know the problems that might arise in the future.

Elevation:

While planning the house you have to make certain provisions for exterior elevation and interior decoration and furnishing work.These add value to your house for ever.

Sanction Plan:

Before taking up the construction work the final drawing must be submitted well in advance to the competent authority for approval.The building construction work must be based on the plan sanctioned by the authority.A minor deviation from the sanctioned plan may be done if required.A copy of the sanctioned plan must be handy at the job site for inspection by the competent authority while the job is under execution.

Housing Finance:

Before starting the construction work, you have to mobilize adequate funds for smooth and uninterrupted execution.You have to decide on the budget and raise it from your own sources or from a housing finance institution.Whatever be the estimate you have to provide for an extra ten percent to take care of cost of escalation of building materials and unexpected additional work. If you intend to avail home loan, you will have to approach a finance company well in advance with the sanctioned plan etc., and get the loan sanctioned.

Foundation:

The structural engineer does the foundation drawing.Though foundation work is a little expensive you must not compromise with it.A building rests safely on a strong foundation.It is the base on which you construct additional floors at a future date.

Area:

From the Floor Area Ratio, the plot coverage area must be worked out.Plinth Area is the total area of construction.This includes all the floors as well as the wall thickness.Carpet area is the area inside the constructed building between the walls and the area actually used. Super built area is generally applicable to apartments.This includes the wall thickness, projected area and the common area.

Bath Room:

For bathroom the bolting arrangement must be such that when it is bolted from the inside the door can be opened from the outside by applying a little force in case of an emergency.The bath room must be laid with anti-skid tiles. The fixtures in the bathrooms must be such that they do not interfere with free movement. Also there shall be no projections from the walls.

Woodwork:

Though teak wood is preferred, by using other woods and wood substitutes you can save up to 50% on the wood cost.  If adequate funds are not available for making built-in cupboards, you may make the provisions for putting up at a future date.

Periodic Inspection:

Civil, structural, plumbing, sanitary electrical, carpentry and tiles laying are inter related works which call for proper co-ordination, with periodic inspection and repair.  When the construction work is in progress a representative of yours must be on the job site.The architect, civil engineer, and the structural engineer must do periodic inspection.  This is a must.

Electrical Wiring and Plumbing:

The architect prepares the drawing for electrical, plumbing, sanitary and pipe laying works and pipe laying works and it must be carried out as per the drawing.In case of any deviation it must be incorporated in the drawing.The drawing must be kept safely so that if any leakage or short circuit occurs after some years, the drawing will come in handy to locate the faulty areas.

Painting:

This is the last stage.Painting work is done in five phases.After primer coating is given it is allowed to dry.Thereafter the full putty and then the first coating of painting are given.This work must never be rushed.After the first coat you may perform pooja.Thereafter touch up putty work is done and then the final coating.  Adequate time must be given for the final coating,which makes the interior visually appealing.

Material:

Do not compromise on the material quality. Always use BIS (Bureau of Indian Standards) certified materials.Electrical wiring materials must be of a well-known and reliable brand. Without proper co-ordination timely execution of work is not possible.For each work phase, a timetable must be drawn up and strictly adhered to.When one phase is over, workers for the next stage of work must step in.There shall be no financial constraints at any stage.  If all these are attended to promptly, you can have your dream house without hassles, and peacefully.

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TRUST PROPERTY AND LEGAL IMPLICATIONS

(Advocates, Property advocates in Bangalore, Property lawyers in Bangalore)

Holding of property by a trustee involves various obligations and duties on the parties to a trust deed and these are enumerated in the Indian Trust Act 1882, which regulates the formation,and function of the trusts,powers and duties of trusties in dealing with trust properties.

Parties to a Trust

Trust is an obligation attached to the property thereby indicating how the property is to be used and who are the beneficiaries of the trust Property.It is an agreement between the author of the trust and the trustee i.e. the manager of the trust property and the owner of the trust property.A trust may be formed by any person Competent to contract, or with the permission of the court by a minor or on behalf of minor.A trust consists of more than one person.The person that is the owner of the property,who reposes confidence in another to manage the property is called author of the trust or the settler.

The person who manages the property as per the directions of the author of the trust is a trustee. Both the author of the trust and the trustee are parties to the document called trust deed which defines the objectives and functions of the trust.The institution is called the trust.Apart from the author of the trust and the trustee/s, the party who is entitled to the benefits of the trust is called the beneficiary, who is not a party to the trust deed.The beneficiary has the right to insist that the trust property is to be used for their benefits although they are not a party to the trust deed.Any person capable of holding the property can be trustee but not the Government of India.Likewise a government servant cannot be a trustee of mosque, temple,church or other religious institutions.

Ingredients of a Trust:

The important ingredients of a trust are:

 (1) The objectives must be certain,

 (2) The beneficiaries must be certain and clear and

 (3) Definition of the trust property must be clear and identifiable. 

The trust cannot be created orally and it must be in writing duly signed by the author of the trust. Trusts are of many types. A private trust is a trust where the beneficiaries are the legal heirs of the author, or a group of individual. A public trust is one where the beneficiaries are whole lot of public.The trust may be partly public and partly private.A charitable trust is created for relief, advancement of education, religion and other purposes beneficial to the community at large.

A trust cannot be created for the following purposes

1. Any purpose which is forbidden by law.

2. Any purpose if permitted would defeat the provisions of law.

3. Fraudulent purpose.

4.The trust which involves or implies any injury to the person, property of another.

5.The court regards the purpose as immoral or opposed to the public policy.

Creation of Trust

A trust may be created by way of a document called the Trust Deed. The Trust Deed is compulsorily registerable under section l7(b) of Indian Registration Act 1908.The stamp duty payable on the trust deed is governed by the Indian Stamp Act 1899, and falls within the powers of the State Governments. Hence the stamp duty varies from State to State.The Indian Trust Act,1882, does not apply to public or private religions endowments. Section 18 of Transfer of Property Act 1882 relaxes all restrictions,in case of properties transferred for benefit of public like advancement of knowledge, religion, commerce, health and other allied objectives.A trustee cannot delegate his duties to another, except clerical duties and must have the final control over such delegation.

Bailment and Trust

Often bailment and trust are confused. In bailment, there is delivery of goods from one person to another person for some purpose and on completion of such purpose; the goods have to be returned.In case of trust, the property is transferred in favor of trustee for the benefit of another person. In bailment, the person who received the goods is not the legal owner, but the trustee is a legal owner of the property.

Rights and obligations of Trustee

The duties of the Trustee shall have to be clearly defined; he should comply with the terms of the trust deed, as per the directions of the author of the trust. He has to get acquainted with the property of the trust and take required care about the genuineness and recoverability of the investments of the trust money.The trustee should, protect the title of the trust property, if necessary, by instituting legal proceedings.He should not set up any title adverse to the beneficiary.He has to exercise proper care and be impartial and should prevent wastage and convertany perishable property to permanent or profitable in nature.He has to maintain proper accounts and adopt proper investment strategies.The trustees cannot commit any breach of trust, cannot set off the loss occurred because of breach of trust in one portion of the trust property against profit of another portion of trust property.When a breach of trust is committed by one of the trustees, all the other trustees are liable to the beneficiary for the total loss sustained.The trustees have certain rights, like possession of the trust deed, title deeds of the trust property,reimbursement of expenses, right to settlement of accounts, right to seek the opinion of the court.

Maintenance of Trust Properties

The trustee may lease the trust property for a period not exceeding 21 years without the permission of the court, may sell the property in lots, by public auction, or by a private contract. He may also sell under special conditions and buy and resell. He has powers to make the investment of the trust property, which must be in securities listed in Trust Act. Any investment other than in the listed securities must be with the written consent of the beneficiary.He may apply the property of the minor for maintenance of minor with proper care and discretion.After a person accepts to manage a trust he cannot renounce it except with the permission of the court, or with the consent of all the beneficiaries.

Trust property cannot be used by the trustee for his own benefit, and any benefit derived from out of the trust property must be transferred to the trust. It is to be noted that the trustee cannot purchase the trust property of which he is trustee. Even his agents cannot buy the same.Further, trustee or his agent cannot buy the beneficiaries interest and cannot be a mortgagee, lessee of the trust property without the permission of the court. Similarly co- trustees cannot lend among themselves.

If a trustee wrongfully sells the trust property, the beneficiaries have a right to follow the trust property so long it is traced not withstanding the intermediate ownership except in case of bonfide sale for value without the notice of the trust.

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REVERSE MORTGAGE BY LIC HOUSING FINANCE LIMITED

(Advocates, Property advocates in Bangalore, Property lawyers in Bangalore)

LIC Housing Finance Ltd.,has a scheme called for "Griha Arjan" for Senior Citizens.The objective of the scheme is to provide a source of additional income to the resident Senior Citizens,above 60 years, who own self-acquired and self- occupied house property in India.The purpose of the loan is to supplement their income for any personal expense, house repairs, to pay any existing liability, etc.The borrower can be single or co-borrower with his spouse.The property should be free from encumbrance i.e.the borrower should be having a clear, and marketable title in his name.The residual life of the property should be at least 20 years.

The Reverse Mortgage loan will be secured by way of registered mortgage of the residential property.The term under this scheme is maximum 15 years. The upfront fees will be 1 % of the loan amount.The maximum loan amount shall be restricted to Rs.50lakhs.The minimum loan amount will1 be Rs1.0lakhs. The loan can be availed through monthly payments/lump sum payments/combination of both.The maximum loan balance would be restricted to 90% of the value of property at any point of time during loan tenure. Loan balance would include interest till maturity.The loan amount will depend upon value of property,age of the borrower,rate of interest etc.Initial valuation of the property would be done to determine the loan amount and subsequent revaluations will be done at intervals of 5 years.

The Company shall have the option to revise the periodic / lump sum amount every 5 years.If the borrower does not accept the revised terms, no further payments will be effected by the company.Interest at the rate agreed before the review will continue to accrue on the outstanding amount of loan.The loan shall become due and payable only when the last surviving borrower dies or opts to sell the home, or permanently moves out of the home which is mortgaged. In case the borrower moves out of the residence, he/she will be required to inform LICHFL.The loan shall be liable for foreclosure due to occurrence of the following events:

a)If the borrower(s) has/have not stayed in the property for a continuous period of one year;

b)If the borrower(s) fail(s) to pay property taxes or maintains and repair the residential property or fail(s) to keep the home insured.The LICHFL reserves the right to realize the amount due by bringing the property to sale and utilizing the sale proceeds to meet the outstanding balance of principal and interest;

c)If the borrower(s) declares himself/herself bankrupt;.

d)If the residential property mortgaged is donated or abandoned by the borrower(s);

e)If the borrower(s) effects changes in the residential property that affect the security of the loan.

f)Due to perpetration of fraud or misrepresentation by the borrower(s);

g)If the government under statutory provisions,acquires the residential property for public use;

h)If the government condemns the residential property;

i)If the borrowers do not accept the revised terms on revaluation of the property and interest reset at the end of every 5 years of sanction;

j)If there is any violation of terms and conditions of REVERSE MORTGAGE LOAN.

The settlement of the dues (loan along with accumulated interest) would be either met by sale proceeds of the mortgaged residential property or through repayment by borrower and his legal heir.The borrower(s) or his/her /their legal heirs /estate shall be provided with the first right to settle the loan along with accumulated interest.The balance surplus remaining after settlement of loan along with accumulated interest, through sales proceeds would be passed on to the borrower or his legal heirs.The borrowers will be required to submit Annual Survival Certificates in the month of November every year, which includes clauses regarding marital status and permanent residence of the borrowers.A list of legal heirs will be obtained at the time of sanction of loan and specific instructions of loan and about inheritance of the property and payment of balance amount, if any,from out of the sale proceeds. The borrower will have the option to repay the loan at any time during loan tenure. There will be no prepayment penalty.

The house property will be insured by the borrower at his cost against fire, earthquake and other calamities.The borrower shall ensure that payment of all the taxes, charges etc.LICHFL reserves the right to pay insurance premium, taxes, charges etc by reducing the loan amount to that extent.The borrower shall maintain the property in good condition.

After the documents have been executed and loan transaction finalized, the Senior Citizen shall be given up to 15 days time to cancel the transaction,for any reason what so-ever.If the loan has been disbursed the entire loan amount will need to be paid by the Senior Citizen borrower within this period.

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DETERMINING THE PRICE FOR YOUR PROPERTY

(Advocates, Property advocates in Bangalore, Property lawyers in Bangalore)

Deciding to sell your property is the first step in a real estate transaction. After this, there are certain other factors which require to be considered by you to get the best price for your property.

In the real estate market, as the potential buyers find a large number of similarly placed properties, they do make heavy bargain to get the property at the lowest possible price. In case you quote a fancy price for your property, your property will remain unsold.Therefore, you, as a seller, should set the price for your property at a scientifically arrived at figure keeping in mind the prevailing market conditions for similarly situated properties and other relevant factors.Thus, there is a need for you to know the sources and the method for determining the right price of your property.

The appraising process is time consuming since there are lot of factors to be considered. Since this is a technical job, it is better to engage the services of a licensed/government approved appraiser to do the appraisal of your house in whom the buyer also has confidence.The appraisers may be members of the local Board of Realtors.The fee and other charges to be incurred in obtaining appraisal report would vary and depend upon the value of the property, location, etc.Both the seller and the buyer must be prepared to wait till the appraising process is completed since both the buyer and the vendor would benefit from this. The appraisal report would give details as to how the value shown therein in respect of the property under consideration is arrived at.

Thus, on the basis of appraisal report, the price for the property may be fixed. Since the value shown in the appraisal report is fixed is by an expert in the field, there would be no scope for suspecting the value as shown therein and therefore, marketability of such property is high.

Similarly, you may utilize the services of real estate agents since Competitive Market Analysis [CMA] is carried out by the real estate agents systematically to determine the correct selling price for the property. Real estate agents have access to multiple listing service computers, which they can use to fix your property properly. Since real estate agents do this service for their livelihood, you can rely upon them and be sure that they know of what they are doing and they have the capacity to get the deal finalized satisfactorily. Therefore, seeking the advice of an experienced real estate agent would help you in arriving at the fair selling price for your property.

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UNION GOVERNMENT TO RE-DEVELOP PROPERTIES

(Advocates, Property advocates in Bangalore, Property lawyers in Bangalore)

With the Union government planning to redevelop existing properties prime

locations in the two metros Mumbai and Delhi, the real estate firms here are set to experience another boom.

In partnership with private realty firms, the centre proposes to overcome shortage in office and residential spaces in these metros.It plans to demolish the existing single or two-storey buildings.In commercial and residential areas to build multistorey structures and optimize the use of prime real estate in its possession. Real estate firms will gain from residential flats or commercial space in the redeveloped properties. They may also gain, from annuities, rental payments being considered by the government in lieu of undertaking construction, financing and risks involved with these projects.

The move will address to a great extent the problem of steep property prices in the urban centers.The problems of unaffordable housing prices can be effectively addressed by public-private partnership.With this, the government would be able to add one crore sq ft office space and 61,000 houses or flats in Mumbai. Another 43,000 flats would be made available for the Mumbai police. Similarly, 25 lakh sq ft office space and 34,000 houses would be developed in New Delhi to overcome shortage of residential space for the government officials, ever expanding list of former ministers, members of parliament and retired government personnel. Another 20,000 houses required for the Delhi Police would be constructed on the existing real estate held by the government agencies. The postal department also needs residential space.

The planning panel and ministries of urban development, railways, defense and finance are being consulted on this initiative. The ministries of defense and railways may not be part of the move to redevelop government properties. Though the three services army, air force and navy are in need of residential and office spaces, the ministry will execute its own plans, Excess land in cantonments would be utilized for this purpose.

Once the policy to redevelop the government properties is finalized, a biding process will be put in place to select the partners for the projects. A model concession agreement would set the normal and commercial terms under which the real estate majors will participate in these projects. The government will extend the re-development of its property in Chennai, Bangalore, Hyderabad, Kolkata, Ahmadabad and Pune.

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LOCK-IN-PERIOD CLAUSE TO PREVENT SPECULATION

(Advocates, Property advocates in Bangalore, Property lawyers in Bangalore)

The property developers in the country are to incorporate a new clause known as "lock-in-period" clause in the agreement to sell to prevent speculations in property dealings.

"Lock-in-period" clause means that the buyers cannot sell their properties within a certain period after booking the property or have to pay a penalty if they do so.The lock-in-period are expected to be introduced mostly for mid-income projects, that offer prices 20 to 30 percent below the market price and, therefore, attract more undercutting from bulk discount buyers. Margins on mid income housing projects are 20 to 25 per cent compared with 50 to 70 per cent for premium housing. In the boom years of2006 and 2007,30 to 50 per cent of housing projects were sold on bulk discounts.

Now, companies such as Tata Housing will not issue no-objection certificates to property buyer for the first six months after allotment while DLF Ltd., India's largest listed realtor, would not transfer the title of the property in the name of the buyer for a year after a property is booked. According to the chairman of Omaxe, a Delhi based organization that Omaxe will introduce similar clauses in all their future affordable housing projects. The companies do not want short-term investors to compete with the company later in the market, as the margins in affordable housing are very low. Omaxe is launching 10 mid-income projects this year.

DLF Ltd., claims it is the first developer to introduce the clause for both premium and mid-income projects. According to the Executive Director, the company has decided to discourage speculation in property dealings since the same buyer used to buy five to six flats in their projects and sell them within a month in the open market for premium.Hence, this lock-in-period clause. Several other companies have imposed a steep transfer charge Rs.100 to Rs.1000 a square foot if the first time buyer sells the property within a specified period to prevent speculation in property dealings.

This approach of the developers has attracted criticism from analysts. According to Chairman, Knight Frank India, developers want the best of both worlds.They want to delay registration and charge of transfer fee because once a property is registered it is binding on developers.

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