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Buying
1. What should a purchaser keep in mind while purchasing a residential flat?
Some important points to keep in mind while buying the flat:
  • Locality – Proximity to workplace, educational institutions, hospitals, shopping areas, entertainment centres, transportation, pollution levels.
  • Quoted area of the flat i.e. Carpet, Built Up Area and super Built Up Area
  • Car parking space
  • Quality of construction
  • Reputation of the builder or seller
  • Sufficient water and electric supply, other utilities
  • Cost components: price, stamp duty, registration charges, transfer fees, maintenance charges, any other payments
  • Appreciation of the property for resale and rental.
  • Any other distinguishing features or advantages of the property
2.What is meant by Carpet Area, Built-Up Area & Super Built-Up Area?
  • Carpet Area is the area enclosed within the walls, actual area to lay the carpet. This area does not include the thickness of the inner walls. It is the actual used area of an apartment/office unit/showroom etc.
  • Built up Area is the carpet area plus the thickness of outer walls and the balcony.
  • Super Built Up Area is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc. This term is therefore only applicable in the case of multi-dwelling units.
3.How can knowing the Carpet Area, Built-Up Area & Super Built-Up Area of a flat help me in purchasing a flat?
This break up is extremely essential as builders can place anywhere from 65% to 85% per cent of the super built area as carpet area. That means, if the price is quoted as 1,000 sq ft super built up area, the carpet area could be anywhere from just 650 sq ft to 850 sq ft. If this break up is not mentioned in the agreement, demand that the vendor/ builder mention it in the sale deed.
4.Should I inspect a property before buying it?
Yes. It is important to inspect the property, probably this is the largest single investment you will ever make. You should know all the details of the property and need for any major repairs / modifications before you buy. You can crosscheck the commitment made by builder and actual implementation. A close inspection points out the positive aspects of the property, as well as the maintenance that will be necessary to keep it in good shape. After the inspection, you will have a much clearer understanding of the property you are about to purchase. Few important points to check while inspecting…
    • Plumbing systems, drainage, water faucets and sanitary fittings.
    • Electrical systems, circuit breakers, wires, capacity of the electric meter, functioning of light fittings
    • Roof, walls, ceilings, floors, paint work.
    • Foundation, basement and visible structures.
    • Doors and windows, latches, locks.
    • Structural stability of the building.
5.Checklist for buying residential or commercial property.
      • Identify the property you wish to purchase
      • Crosscheck of current market rates of property in the vicinity and last known transactions, current market trends.
      • Formulate commercial terms.
      • Distinguish between negotiable and fixed terms and conditions of the contract, eg. Price, payment schedule, time of completion etc.
      • Avail of services of Propmart for legal opinion, valuation or property related matters.
      • Check for clear titles of the property. Ask for photocopies of the all deeds of title related to the property to be purchased. Examine the deeds to establish the ownership of the property by seller, preferably through an advocate. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale. Previous encumbrances and loans, if any on the property must be cleared before completion of purchase of the property.
      • Finalise commercial terms of purchase of the property. Ascertain transfer fees, stamp duty and registration charges to be paid on purchase of the property.
      • Ascertain outgoings to be for the property i.e. property tax, water and electricity charges, society charges, maintenance charges.
      • Request Vendor to obtain, if applicable, consent, permission, sanction, no objection certificate of various authorities such as the (a) society (b) the income tax authority (c) Municipal Corporation (d) the competent authority under the Urban Land Ceiling and Regulation Act (e) any other authority.
      • If you are looking for loan for property purchase, contact financial institutions and ask for a pre approval letter, many options are available for loans. Propmart can also assist you for loan requirement.
      • Permanent Account Number of Vendor and Purchaser under Income Tax laws Payment of stamp duty on the formal agreement or document for transfer of the property, signing by both the Vendor and Purchaser and registration.
      • After payment of the entire sale price, take over legal possession of the property and check the receipt of original documents from the Vendor of the property.
      • Make sure that property holder’s name is changed in all related records, e.g. society, Electricity Company, municipal corporation, Index II etc.
Selling
1.When is a sale of immovable property concluded?
The sale of immovable property is concluded on payment of the entire consideration amount, registration of the document of sale and handing actual possession of the property to the purchaser.
2.Is it compulsory to register documents for the sale of property?
Yes. Documents for sale/transfer of any immovable property of the value exceeding INR 100/- are to be compulsorily registered in the jurisdictional office of the Registrar of Sub Assurances.
3.Does one have to pay any amount for registration of the sale/transfer documents?
Yes. Registration of sale/transfer documents will involve payment of registration fee, as prescribed in the Registration Rules and as applicable in the States in India, where the Property is situated.
4.Are there any formalities to be completed or forms to be filed on execution of the Sale Deed or document of transfer?
Yes. The formalities and forms may vary from State to State depending on where the property is situated. Every State has its set forms under the Registration Rules that are required to be filled and filed along with and at the time of Registration of Sale Deed/Transfer Deed. Under the provisions of the Income Tax Act and Rules for a transaction of sale, it is now compulsory for the Purchaser and Seller to give their Permanent Account Number and in the event of either the Seller and/ or the Purchaser would be required to fill Form 60 of the Income-Tax Rules. In case of either the Purchaser or the Seller being a Non-Resident Indian, not assessed to tax in India, such a Party would be required to file Form 60 of the Income-Tax Rules.
5.I want to sell my property, which are the documents a prospective buyer need from me?
A buyer may ask for photocopies of original sale deed, tax paid receipts, encumbrance certificate.
Renting
1.What should a lessee or occupant keep in mind while purchasing a flat or office?
Some of the factors a lessee or occupant must keep in mind while rent a flat or office is:
      • Locality i.e. transport, schools, hospitals, market, business district, entertainment centres, hotels, restaurants, pollution levels
      • Quoted area of the flat i.e. Carpet, Built Up Area and super Built Up Area
      • Car parking space
      • State of the premises, quality of construction, fixtures and fittings in the premises
      • Reputation of the Lessor
      • Sufficient water and electric supply, other utilities
      • Cost components: rent, stamp duty, registration charges, transfer fees, monthly outgoings and society charges, costs of utilities.
      • Any other distinguishing features or advantages of the property
2.On what basis is the rent charged ?
Rent for a premises can be charged either on floor area or lumpsum charge for the premises. Usually office or shop premises are charged rent on floor area.
3.What are non-occupancy charges?
Non occupancy charges are levied by the society when the flat owner himself does not reside in the flat but rents it out to a third party.
4.What are types of documents to be signed for renting an office or a shop?
Documents generally prevalent for renting offices or shops can be a lease, leave and licence agreement, business centre agreement or conducting rights agreement.
5.What are the types of documents to be signed for renting residential premises?
Documents generally prevalent for renting residential premises can be a lease, leave and licence agreement, paying guest or caretaker agreement.
Home Loans
1.Can I repay the loan ahead of schedule?
Yes, you can repay a loan ahead of schedule. Some HFCs charge a pre-payment penalty.
2.On what basis is the amount of the home loan decided? or on what basis a capacity of a person to repay the loan is evaluated ?
The amount of the loan for each individual depends on the following factors:-
      • An Indian resident or NRI
      • The income of the family applying for the loan.
      • Above 21 years of the age at the commencement of the loan.
      • Below 65 years when loan matures.
      • Number of dependants.
      • Qualifications.
      • Assets and liabilities.
      • Either salaried or self employed
3.What are the types of loans available depending on the interest charged?
Most Housing Finance Companies offer the fixed rate as well as the adjustable rate (Variable – Floating rate) home loan to customers ·Fixed rate: where the rate of interest charged by the HFC on the loan is constant over the tenure of the loan. ·Variable rate :Commonly known as Floating Rate, where the rate of interest charged by the HFC on the loan keeps changing with respect to the rates in the market over the tenure of the loan.
4.What is the difference between monthly rest and annual rest?
  • Monthly rest: the interest is calculated on the outstanding principal loan at the beginning of every month.
  • Annual rest: the interest is calculated on the outstanding principal loan at the beginning of every year.
5.What is the security required against the home loan?
The main security for a home loan is the first mortgage of the property to be financed, normally by way of deposit of title deeds and /or such other collateral security as may be necessary. In addition interim security may be required, if the property is under construction. The documents of title will be kept in the safe custody of the HFC until repayment of the loan.
NRI
1.Who is a Non-Resident Indian (NRI)?
An NRI is a Person Resident Outside India who is a citizen of India or a Person of Indian origin. A Person resident outside India is a person who has gone out of India or who stays outside India, in either case – For or on taking up employment outside India, or – For carrying on outside India a business or vocation, or – For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period.
2.Do non-resident Indian citizen require permission of Reserve Bank to acquire residential/ commercial property in India?
No. An Indian citizen resident outside India does not require any permission to acquire any immovable property in India other than agricultural/ plantation property or a farmhouse.
3.Where can permission be taken for acquisition of agricultural land/plantation property / farmhouse by any person resident outside India or foreign nationals of Indian origin?
All requests for acquisition of agricultural land/plantation property / farmhouse by any person resident outside India or foreign nationals may be made to The Chief General Manager, Reserve Bank of India, Central Office, Exchange Control Department, Foreign Investment Division (III), Mumbai 400 001.
4.Do non-resident Indian citizen require permission of Reserve Bank to acquire residential/ commercial property in India?
No. An Indian citizen resident outside India does not require any permission to acquire any immovable property in India other than agricultural/ plantation property or a farmhouse.
5.Who is a Person of Indian Origin?
A person of Indian origin is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who: – At any time, held Indian passport; – Who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).”
Legal
1.I live in an apartment constituted under the Apartment Ownership Act, 1963 What happens in case of destruction or damage to the common property?
If, within sixty days of the date of damage or destruction to all or part of the property, it is not determined by the Association of Apartments Owners to repair, reconstruct or rebuild, then and in that event,- a) the property shall be deemed to be owned in common by the apartment owners; b) the undivided interest in the property owned in common which shall appertain to each apartment owner shall be the percentage of the undivided interest previously owned by such owner in the common areas and facilities; c) any encumbrances affecting any of the apartments shall be deemed to be transferred in accordance with the existing priority to the percentage of the undivided interest of the apartment owner in the property as provided therein; d) the property shall be subject to an action for partition at the suit of any apartment owner, in which event the net proceeds of the sale together with the net proceeds of the insurance on the property, if any, shall be considered as one fund and shall be divided among all apartment owners in percentage equal to the percentage of undivided interest owned by each owner in the property after first paying out, all the respective shares of the apartment owners to the extent sufficient for the purpose and all charges on the undivided interest in the property owned by each apartment owner. Courtesy: www.legalpundits.com
2.What particulars must 'Deeds of Apartments' under the Apartment Ownership Act contain ?
Deeds of Apartments must contain the following particulars, namely: a) Description of the land as provided by Section 11 of the Act or the post office address of the property, including in either case the liber, page and date of executing the Declaration, the date and serial number of its registration under the Registration Act, 1908 and the date and other reference, if any of its filing with the competent authority. b) The apartment number of the apartment in the Declaration and any other data necessary for its proper identification. c) Statement of the use for which the apartment is intended and restrictions on its use, if any. d) The percentage of undivided interest appertaining to the apartment in the common areas and facilities. e) Any further details which the parties to the deed may deem desirable to set forth consistent with the Declaration and this Act. A true copy of every Deed of Apartment shall be filed in the office of the competent authority. Courtesy: www.legalpundits.com
3.A house is a house, by whatever name you call it. How is an apartment under the Maharashtra Apartment Ownership Act the any different from a flat under the Maharashtra ownership Flats Act, 1963?
Under The Maharashtra Ownership Flats Act, 1963, the land and the building including, flats/ premises or apartments are conveyed to and owned by a Co- operative Society or a Limited Company, both of which are persons or incorporated bodies in Law. An association of Apartment owners under the Act is an incorporated body. Further, under the Maharashtra Ownership of Flats Act, the legal title to the land or building vests in the society or company as the case may be and the flat or premise holders have a right to occupy and use to use their respective flats/ premises as shareholders and members of the Society or company but no independent or exclusive ownership of any portion of the land or building. In case of an apartment under the Act, each Apartment owner is entitled to the exclusive ownership and possession of his Apartment and an undivided interest in the common areas and facilities in the percentage specified in the Declaration. An apartment is a part of the property intended for any type of independent use, including one or more rooms or enclosed spaces located on one or more floors( or part or parts thereof) in a building,( intended to be used for residence, office, practice of any practice of any profession, or for carrying on any occupation, trade or business or for any type of independent use) and with a direct exit to a public street, road or highway or to a common area leading to such street, road or highway. Courtesy: www.legalpundits.com
4.What is the purpose of collecting amounts towards Sinking Fund in Co-operative Housing Society? What should be the contribution from members towards Sinking Fund? When can the amount collected for Sinking Fund be spent by the society?
The purpose of collecting Sinking Fund is to accumulate and keep sufficient funds with the society so that the property of the Society i.e. building can be reconstructed in future. The contribution to Sinking Fund is a statutory obligation. Sinking Fund has to be contributed as decided by the General Body of the Society. It should be at least @1/4 per cent per annum on the cost of the each flat excluding the cost of the Land. On the resolution passed at the meeting of the General Body of the Society and with the prior permission of the Registering Authority, the Sinking Fund may be used by the Society for reconstruction of its building/s or for carrying out such structural additions or alterations to the building/s as in the opinion of the Society’s Architect is required for carrying out such heavy repairs as may be certified by the Architect. However permission is not usually granted by the Registrar to withdraw amounts from the sinking fund.
5.What is the object of the tax levied under Maharahstra Tax on Buildings (with Larger Residential Premises) (Re-enacted) Act 1979? Why was it re-enacted? When is such a tax payable?
The object of the Maharashtra Tax on Buildings (with Larger Residential Premises) Act 1979 is to levy a tax so that there is a check on extravagant use of available living space, particularly residential accommodation. This tax is a source of revenue for the State Government. Initially there was a separate Act i.e. Maharashtra Tax on Residential Premises Act, 1974. In a case filed in the Bombay High Court i.e. Miscellaneous Petition No. 214 of 1978 Rajab Mahal Co-operative Housing Society Ltd. v/s State of Maharashtra & Others it was held that the Maharashtra Tax on Residential Premises Act, 1974 providing uniform rate of tax for premises situated in any corporation area was in contravention of Article 14 of the Constitution of India and therefore the said Act was null and void. Therefore, a situation had arisen whereby the State Government would lose revenue of lakhs of rupees and substantial amounts earlier collected under 1974 Act might have had to be refunded. Therefore to maintain continuity and with a view to not refund the tax collected earlier, a new Act which was free from the defects pointed out by the Bombay High Court in the abovementioned Judgement was re-enacted. It may be emphasized that the new Act was specifically drafted in such a way that recovery would be made since 1st April, 1974 though the re-enacted Act came into existence from 1979. The tax is payable in Corporation areas of the State of Maharashtra excluding Greater Bombay @ 10% of the Rateable value of Residential Premises, if the rateable value exceeds Rs.1,500/- (Rupees One thousand five hundred only) and the floor area is of more than 150 sq.metres. If the property is in Greater Bombay the tax is payable @ 10% of the Rateable Value of Residential Premises if the rateable value of the premises exceeds Rs.1,500/- (Rupees One thousand five hundred only) and the floor area of the premises is of more than 125 sq.metres Courtesy: www.legalpundits.com
Tax
1.Are any concessions available under the income tax laws with regard to profit on sale of residential property?
Concession is available by way of exemption from income tax on capital gains arising on transfer of a residential property. The exemptions are provided in Sections 54 and 54EC of the Income-tax Act (the Act). The exemption is available on re-investment of the capital gains in specified assets by the assessee.
2.Who is entitled to such concessions?
The exemption under Section 54 of the Act is available to an assessee who is either an individual or a Hindu Undivided Family (HUF). The exemption under Section 54EC is available to any assessee.
3.Is there a minimum holding period for such property before transfer to be eligible for the concessions?
The residential property should be a long-term capital asset i.e. it should be held by the assessee for a period of 36 months, prior to the date of the transfer.
4.What is the nature of assets in which the sale proceeds should be re-invested by the assessee to avail the exemption?
Under the provisions of Section 54 of the Act, the capital gains should be re-invested in the construction or purchase of another residential property. Under the provisions of Section 54EC of the Act, the capital gains should be re-invested in ‘long-term specified asset’. For the purpose of this provision, long-term specified asset means any bond redeemable after 3 years, issued on or after 1 April 2000, by National Bank for Agriculture and Rural Development or by National Highways Authority of India.
5.Is there any time limit for such investments to be made?
Under the provisions of Section 54 of the Act, the assessee should, within a period of one year before or 2 years after the date on which the transfer took place, have purchased or within a period of 3 years, after the date of transfer, constructed a residential house. Under the provisions of Section 54EC of the Act, the assessee should invest the capital gains in the specified capital asset, within a period of 6 months, after the date of such a such transfer.
Vaastu
1.What is Vaastu Shastra?
Vaastu Shastra is the Vedic system of Architecture & Design. Vaastu Vidyaa is one of the sixty-four identified ancient Indian Arts. Vaastu Shastra was given by the sages for betterment and welfare of society. It is believed that affliction of Vaastu creates sorrows and disappointments. Vaastu Shastra i.e. science or “shastra” of structures, tells us how to build a house or office for greater happiness and prosperity. Houses, villages, towns and cities should be designed according to the principles of Vaastu.
2.What are the basic principles of Vaastu Shastra?
The basic principles of Vaastu are Vaastu Purush Mandala i.e. a man lying with his head-pointing North-East, in a grid of 64 squares dedicated to different Gods. It is believed that the world comprises of five basic and essential elements known as SPACE, AIR, FIRE, WATER & EARTH.
3.What would constitute an ideal plot?
  • Square Plot : is the best shape of a plot in which all four sides are straight and equal in length and it has equal angle of 90 degree at all four corners.
  • Rectangular Plot: having its length not more that double the breadth (length and breadth not more that 1:2) is a very good plot. A rectangular plot has four straight sides and equal angles of 90 degree at all corners with opposite sides of equal length.
4.How does one determined direction of the plot?
Direction of a plot can be determined by any of the two modern simple methods by using a compass, the device for finding direction which has a freely moving needle which always points to the magnetic North. Make two lines crossing each other dividing a paper in four equal parts at 90-degree angle. Place a compass on paper in the middle of your plot and align it with two lines in the North and the South of the needle of the compass. Extend these lines on the plot and mark it to have exact direction.
5.What should be the proportion of the dimensions of a house?
The proportion between length and breadth should be 1:1 but it should not exceed 1:2 ratio. The size of length, breadth of a house, affect the fortune of the person who lives in it.
Fengshui
1.What is Feng Shui?
Feng Shui is the ancient Chinise practise of understanding the vital energy known as “chi” . In its traditional form, Feng shui is a discipline with guidelines that are compatible with many techniques of architectural planning. It deals with analysing and influencing the interaction between people, buildings and the environment in order to enhance the quality of life.
2.What are the basic principles of Feng Shui?
The basic principles of Feng Shui are :
    • Yin and Yang
    • Five Elements : METAL, WOOD, WATER, FIRE and EARTH
    • East/West Compass Directions
    • Solar System
    • Environment
Feng Shui is based upon a set of theories and complex calculations derived from the Yi Jing. This includes an in-depth understanding and application of the theories of Yin and Yang, along with the balancing of the Five Elements and taking into account the physical relationship between the natural environment and the magnetic field. It recommends that you build structures, whether residential or commercial, so as to have a positive atmosphere inside. The ownership of premises is not so important, whoever occupies and stays in the building is the recipient of the positive or negative effect.
3.What is the role of the five basic elements?
The Ancient Chinese believe that the five basic elements constitute every compound of the universe and the circle of life is linked with these five elements. Therefore, it is important to have a correct ratio of all the five elements in your life. Every element can bring disadvantage or advantage to your life. The shortage of any one element can and will bring disturbance in your life. Feng Shui can be applied to analyze the energy (Qi) of a city, state, country or even the world.
4.How is a Feng Shui reading done?
A Feng Shui practitioner using a Lo-pan (compass) determines the energy characteristics of a building and its resultant effects on the building’s occupants. Calculations are done according to the basic principles, then remedies are prescribed where necessary in order to balance the energy so it will have a positive effect. The best time to have a Feng Shui consultation is when you want to :
      • Move into a new home or office
      • Buy, remodel or sell a home or business office
      • Increase your prosperity
      • Boost your health
      • Improve your relationships
5.What is Bagua According to Fengshui?
The ‘Bagua’ is an energy map of the movement of energy or “chi” with flexible templates divided into nine parts according to which a plan of your property, land, house, apartment, or even a room could be designed. It is a symbolism that helps in developing positive and intuitive relation with the home you live in.
Registration/Stamp Duty
1.Which documents must be compulsory registered?
The following documents are required to be registered compulsorily under the Indian Registration Act, 1908: (a)Instrument of gift of immovable property; (b)Other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property. (c)Non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of creation, declaration, assignment, limitation or extinction of any such right, title or interest; (d)Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent. But the State Government may publish an order in official gazette exempting any district or a part of a district or a lease that does not exceed the term of five years and the annual rent of which does no exceed Rs. 50/- . (e)Non-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property. (f)Authorities to adopt a son that is not conferred by a will.
2.How much is the Registration Fees on sale of immovable property?
The registration fee in case of sale of immovable property is 1% of the market value or Rs 30,000, whichever is lower. There could be some additional charges for scanning of documents were the office of the Sub Registrar has been computerised.
3.What are the pre-requisites for a document for sale of a flat or shop or office to be registered in Maharashtra?
The following are the pre-requisites for registration of a document for sale in Maharashtra:-
      • Duly completed, stamped and signed instrument printed on single side only.
      • Receipts for payment of Stamp Duty and Registration Fees.
      • Property Register Card
      • Commencement Certificate issued by the Municipal Corporation for premises in a building under construction and Occupation Certificate for a completed building.
      • Property Tax Bill in case of depreciation in market value for old buildings.
4.When and where should a document be registered?
Every document which is required to be registered under the Registration Act, except a Will, should be presented at the office of the Sub Registrar of Assurances for the registration within the prescribed time of four months from the date of its execution. A document is registered with a sub-registrar of a district in which the immovable property is located.
5.Can a document be registered after a lapse of four months?
Yes. A Deed of Confirmation with the original document attached is signed and registered.