Monday, 27 January 2014

A Property Advocate Article Regarding



The increased frequency of earthquakes around the world has brought home the urgency of a planned program for ensuring safety in design and instruction of new buildings and comprehensive need for retrofitting the existing building against collapse during disasters such as earth quakes, cyclones or flooding.

1. At the time of building construction, there may not have been idcquate concern regarding disasters such as earthquakes and hence the building might have been executed withoutfulfilling the requirements if safety measures.

2. In the case of old buildings, deterioration of the material with age their changesin the occupancy category may place the building in a vulnerable category introducing significant structural deficiency.


During an earthquake the ground and the structure shakes violently. This back-and-forth motion can cause a building to fall off its foundation, resulting in major damage to the structure and sometimes even total collapse. Seismic retrofit is not rocket science, and the basic principles are easily understood. One can quickly learn all that is needed to make informed decisions regarding the retrofitting of one's own home. Retrofittingfocuses on strengthening the house-to- foundation connections using specially designed hardware and engineered construction methods. Retrofitting allows a house to withstand much greater earthquake forces with much less structural damage.

Since disasters and the forces generated by them are unpredictable, retrofitting cannot guarantee that a house will receive no damage at all. However, it has been proven that retrofitting greatly reduces the amount of damage a house receives and is highly effective in preventing catastrophic collapse and loss of life. While retrofitting the building is provided with additional strength, stiffness and ductility to ensure acceptable performance during future disasters. Modem building codes have been written so that newer homes usually don't need to be seismically reinforced if they are properly constructed. However, builders sometimes do not understand provisions of the code that are specific to detailing reinforcement and neglect to follow these aspects of the building code. A proper evaluation will reveal if a building needs retrofit, regardless of whether it is new or old. Walls and columns are the most critical elements during disasters. Thousands of structures in metropolitan areas in India need assessment and retrofitting if loss of life is to be minimized during disasters. The concepts of assessment and retrofitting are well known and will enable both life safety and reduction in loss of property damage. The cost of retrofitting will not be prohibitive, because only existing weaknesses in building that are identified during building that are identified during evaluation are rectified during retrofitting.

Architects do not design retro- fits; this is something done by j structural or civil engineers. As in other fields, engineers tend to special ize, so if you choose to work with an engineer, be sure he is one with special training in retrofit design. Contractors, I who have had special training in retrofit engineering principles, can take up installation. Seismic retrofittechnology is continually evolving, and a retrofit contractor needs to understand and follow the most current seismic retrofit standards. It is also important that he teams up with a structural engineer. A retrofit generally costs between 5 percent and 10 per cent of a home's value. For many home owners the one-time cost of a retrofit equals a few years of earthquake insurance. And insurance won't prevent or reduce damage to your home, but retrofitting will.




Friday, 24 January 2014

Article Regarding "Provide public parking place and get extra F.S.I."



Developers in Mumbai can build more if they set aside some space for publi0063 parking. The Maharashtra government has come out with an incentive floor space index (FSI) provision that encourages developers and housing societies to earmark space for a public cause in return of permission to build more.

This would not only free up some privately-ownedplots or surplus space in housing societies for public parking but also have some impact on the property market since the developers will get extra FSI to build more.

In areas where the FSI has been caped at 1 or 1.33, this provision would virtually be a windfall for developers if they can set aside the required space for public parking. Additional FSI is big enough an incentive for developers. In the island city, the maximum permissible FSI, which determines vertical growth of a building in proportion with the plot area will be 4 under the new parking policy proposed by the Government. In suburbsand extended suburbs, the maximum permissible FSI will be 3, according to an amendment made by the state to the section 37(2) of Development Control Rules (DC Rules). The general FSI in the island cityand suburbs is 1.00 and 1.33.

The provision says the minimum area of a plot being offered for public parking should be 1000 sq m in the island city and 2000 sq m in suburbs. The minimum number of motor vehicles publicparking space should not be less than 50 subject to minimum parking space of 700 sq m. The maximum permissible FSI that the policy offers is inclusive of the FSI actually used by the developers or societies. The policy will be implemented by the Brihan Mumbai Municipal Corporation (BMC).

The provision will work like this. Suppose a developer or housing society offers a 20,000 sqm plot for public parking, after that building or society has fulfilled parking requirements of the residents, to the municipal corporation and if the corporation accepts the proposal, the developer or the society concerned will get an additional FSI (depending upon location) over and above the FSI granted earlier. People using the parking space will have to pay charges to the BMC. But the developer or society will not claim any share in this revenue and the only incentive will be extra FSI.

The provision makes a distinction for areas near railway stations, bus depots, metro stations, water jetties, government offices, and prominent places of worship. If the parking space proposed bydevelopers or societies is within 500m distance from any of these places, the permissible additional FSI will be available on 50% of the built of parking area. In other parts of the city and suburbs, this will be 40%. This provision has been included to facilitate public parking around prominent places of worship like Siddhivinayak, Mahalaxmi temple, Haji Ali, Mount Mary church etc.

The provision would not only create parking space around the popular places of worship but also lead to creation of additional housing stock by offering extra FSI. The provision at places of worship also takes into account the security aspect since shortage of parking has always been a security threat.


Defaults on housing loans are said to be on the rise, with individuals facing the brunt of the high interest rate regime. An indicator of this is the fact that of the total security receipts (SRs) of Rs,1,100 crore issued by Asset Reconstruction Company (India) Ltd (ARCIL) to banks between April -September 2008 for acquiring bad loans 20% were from home loan defaults.

Asset Reconstruction Companies (ARCs) expect a further jump in housing loan defaults in the coming quarters if interest rates do not climb down. When an ARCacquires bad debts from a bank, based on a valuation they either pay cash or issue SRs which are held in a trust and redeemed after realization of the assets ARCIL, which is the pioneer in acquiring distressed assets, had acquired these bad loans in question from around 20 banks. While a detail of individual banks is not available, it is learnt that ICICI Bank's portion of the total SRs issued by ARCIL was about 30%. According to ICICI Bank, the total value of delinquent loans sold by the bank to Arcil April 2008 onwards stands at Rs 608 crore for a sale consideration in excess of62% of the gross loan book. However, it is not known what portion of this comprises retail loan defaults.


According to an ICICI Bank spokesman:"Sale of retailNPAs has been one of the many tools adopted by the bank to proactively manage delinquencies in the portfolio. It is a standard activity undertaken in the normal course of business by all international banks. Sometimes the sale is conducted every quarter. Also, this is only a very small portion in the over all delinquency management strategy of the bank."

NPAs have an adverse impact on shareholders' value of banks and financial institutions by eroding margins. ARCs acquiredistressed assets at a discount depending on the credit realization potential of the asset.


An industry expert said that banks would increasingly use ARCs to hive off their distressed retail assets so that they are not required to sully their hands in dealing with bad retail loans. An official from a newly floated ARC said that even though bad retail assets offers a huge opportunity, it requires that right machinery to gain monetary realization from such assets.