Prestige Ivy Terraces, Marathahalli-Sarjapur ORR, A Project Riding High on Connectivity!

With traffic situation in the city of Bangalore becoming worse every passing day, staying close to one’s workplace has evolved as a ‘sensible’ option for many. This is exactly why Prestige Ivy Terraces is tickling denizens’ fancies’ in Bangalore.

Strategically located off Marathahalli-Sarjapur Outer Ring Road, the project has five residential towers of G+15 floors. Spreading over 3.6 acres, there are about 315 apartments with just four apartments on each floor. The project offers 2 BHK, 2.5 BHK and 3 BHK configurations. These beautifully laid out residential apartments promises abundant natural light and cross ventilation.

The project entrance welcomes you with a mirror-pool and an ivy-adorned entrance, hence the name Ivy Terraces.

Location

Exact Location of the project on Google Map

From a sleepy area to bustling realty hotspot, the way the Marthahalli-Sarjapur ORR has developed is nothing short of remarkable, thanks to the rapid proliferation of commercial, residential and office spaces. The stretch enjoys proximity to several IT firms along the Marathahalli ORR and adjoining Whitefield-ITPL Corridor.

Prestige Ivy Terraces is right behind Cessna Business Park. Further, proximity to the Bellandur – Outer Ring Road makes accessibility to Cessna Business Park, Vrindavan TechVillage, RMZ Ecospace, Salarpuria Hall Mark, Global Technology Park and Intel Corporate Office quite convenient.

The project also enjoys robust access to key developed markets of Koramangala, HSR Layout, and Whitefield, among other major locations.

Connectivity

• Ivy Terraces enjoy easy access to CBD and the airport (via the signal-free ORR stretch) as well as signal-free access from all the way from Hebbal to Sarjapur.
• Major entertainment hubs of Koramangala (9.6km) and Indiranagar (14km) aren’t far away either. Secondly, the ORR allows the residents to travel to different parts of the city with ease and speed.
• A six-lane railway over-bridge near Marathahalli Junction connects Kundalahalli area and HAL Airport Road. Apart from being surrounded by the thriving IT parks, the locality has emerged as one of the established commercial centres with companies like as Samsung, Schneider Electric, Motorola, and Nokia having their base here.
• The proposed Namma Metro project that is expected to cater to Marathahalli in Phase 3 (connecting vast areas of ORR, linking localities such as Sarjapur Road, Marathahalli and Mahadevapura) will come as a saviour for the residents of this project.

Project Amenities

Artist Impression of the Main Entrance

The project offer amenities for everyone. For fitness freaks, there is a well-quipped gymnasium, jogging track, health club, and a designated room for yoga/aerobics. Sports enthusiasts can avail services of squash court, badminton court, table tennis and billiards. Ivy Terraces does not disappoint on child-friendliness quotient as well. Along with children’s play area, there is an exclusive area for indoor games.

Not to mention, a little ahead of the project entrance is the ‘Recreation Block’ with an exotic Clubhouse decked with the swimming pool, deck and party-area. The construction of clubhouse and swimming pool is already half-way through. Apart from these luxury amenities, the project has all usual facilities including power-backup, security, lift, intercom facility and provisions for rain water harvesting.

A point worth mention here is that all the units in the project are vastu compliant.

A closer look at the project

• As mentioned above, the project scores high due to its prime location. And considering the location, one can expect decent rental yield.
• Social and physical infrastructure around the project is well in place. In fact, the very next building to the project in the New Horizon Gurukul School. VIBGYOR High School and Ekya School are also within the radius of 5km.
• It also enjoys proximity to hospitals like Sakra World Hospital and swift accessibility to Phoenix Mall and VR Mall in Mahadevapura.
• Floor plan of the units is as per the basic Prestige standard. Thus, one can be sure of quality fixtures and amenities.

Floor Plan of a 3BHK unit of 1,586 sq.ft.

• All the units are corner units with no common walls in between, thus protecting privacy of residents.
• The balconies and the living rooms are spacious enough.
• While in all the units there is just one balcony, the developer has given a ledge in all the windows that can be used for keeping pots or any other decoration purpose.
• The project offers units in three configurations, i.e., 2, 2.5 and 3BHK. In each of the BHK-type, there are different sizes available.


• Since its launch in 2013, the project has recorded decent price appreciation. It was launched at Rs 5,100 per sq. ft. and currently the builder is quoting Rs 6,500 per sq. ft., clearly indicating an appreciation of 27 per cent in a span of four and half years.
• The construction of the project is well on time. The developer is expecting to complete it by December 2017.
• The tiling work on the driveway has started.

On the Flipside

• The project’s woes are no different from rest of the city– chaotic traffic snarls.
• The exit to reach the Outer Ring Road (ORR) is narrow. However, one can opt for Panathur Junction route which is wide enough.
• The ratio of land to the apartment units is on the higher side. This implies that common amenities will be shared by more number of users.
• The stretch of ORR-Marathahalli is flooded with residential projects at relatively lower price. Considering this, the price of Ivy Terraces is slightly higher. Which indicates its premium nature.

Conclusion

All in all, location scores over for Ivy Terraces. Considering the locational advantages, it is a good option for both end-users and investors. And with over three decades of experience in the real estate space, Prestige is the only CRISIL DA1 rated Developer in India. Thus, the project boasts of this brand value, which comes with surety of timely completion and quality product. For those who have the budget and are particular about the brand value, it evolves as a good bet.

Why Selling an Old Apartment Makes More Sense in Today’s Market!

Anitha, soon after her marriage in 2007, bought a 3 BHK apartment developed by a B grade builder for Rs. 45 Lakhs. Now with two growing kids and her in-laws moving in with her, her family decided to upgrade to a bigger house. As a result, in 2017, they bought a 4 BHK apartment in another well-developed society.

Now, what best can she do with her old apartment? She’s got a prospective buyer willing to pay Rs. 1 Crore for her property. So, is selling it at this price a good option? Or should she wait for the price to increase further? How about putting it on rent? How about renting it and investing that money in fixed deposits and earning interest out of it? Anitha is in a serious dilemma!

Now, in order to break down this conundrum, let us understand each case.

Case I: Selling the Apartment

Considering the present real estate market, Rs. 1 crore is a decent price that one can get for a decade old property by a B grade builder. This roughly boils down to 12 per cent appreciation y-o-y basis.

Moreover, with unsold inventory piling up and developers willing to negotiate, the market today has completely transformed into a buyer’s market. There are a plethora of options to select from and that too at a competitive price. With the tables turned, buyers are in better position to negotiate, to strike the best deal. Therefore, anchoring to a higher price wouldn’t help the case at all!

Thus, in the current scenario, selling it at this price seems like a good option. Isn’t it?

Case II: Wait for Price to Increase Further

It is often said that in asset market, future outlook is more important than past performance, as it is driven by expectations! Well, with this mindset, one may possibly argue that land is a constantly appreciating asset. Indeed. But one must also understand that the physical structure on land is a depreciating asset.

With age comes the additional expenditure of maintenance and upgrades. Moreover, if a property is left alone, it will just continue to lose/reduce its value.

Age of the property is a very crucial factor that must be given utmost importance. Also, appreciation of an apartment value depends on various factors such as surrounding development, physical infrastructure or with new avenues of job opportunities. And these factors, in most of the cases, are not forever. For instance, Anitha’s apartment is close to Sarjapur Road in Bangalore, an area where multiple new projects are mushrooming at a fast pace. Around the project, there is no scope for further development. IT/ITeS companies are already functional in and around the area. In this backdrop, nothing major is expected to happen that will drastically enhance this particular property’s value.

Further, as mentioned in Case I, the market is flooded with an array of options in the primary segment at a competitive price. Thus, finding a prospective buyer for a decade-old property is not a cakewalk.

And if one still aspires for further appreciation, periodic capital input is the only way out.

Case III: Letting out the Property

This, sort of, evolves as a most convenient way for many. And why won’t it be? After all, who doesn’t like extra monthly income? Well, as they say, there are two sides to every coin. While renting may be great for some, the disadvantages associated with it cannot be side-lined.

Denizens do not have the time and energy to deal with tenants or to resolve issues pertaining to maintenance of a property. Once a tenant vacates, it becomes a task to find another one. Undoubtedly, technology advancements have helped in this field but there are always certain grey areas. Thus, in this case, many tend to take assistance from property management portals that come with an additional cost.

Another important factor is the fluctuations in the rental housing market. While one may anticipate certain amount of rent in five years’ time, there is always the possibility of rental values remaining more or less the same. This, along with additional cost on a property, might result in financial strain.

Case IV: Investing in Fixed Deposits with Rental Income

Gone are the days when fixed deposits were one of the best options to save money due to high interest rates. Macro-economic conditions coupled with increased liquidity due to the surgical strike against black money have resulted in decreasing rates. And with dwindling interest rates, many have now begun to resort to other alternatives such as government schemes that also come with tax benefits. The table below shows the interest that FDs in major banks can fetch.

FD Interest Rates in India

If we were to believe the market experts, interest rates are expected to decline further in the times to come. Moreover, the real interest rate, i.e. the rate of interest that one receives after allowing for inflation, is also depreciating. The only saving grace would be higher real interest rate in the future, for which the possibility as of now looks very bleak.

The Verdict

Out of all the above cases, Case I (selling the apartment) is most likely to be a safer bet for Anitha. The amount received after selling her property is expected to help her in the repayment of the loan that she has availed for her new home. By doing that, she will also save tax on long-term capital gains.

In one doesn’t have a loan to repay, investing in another property or government bonds/infrastructure bonds is a good option to save tax on capital gains. Last but certainly not the least, it is a matter of personal choice.

Got a different opinion? Tell us in the comments box!

West Bangalore: Where Infrastructure Is A Game-Changer!

Mysore Road Station is currently the last stop of Phase 1 Bangalore Metro
West Bangalore is a splendid example of how improved infrastructure can transform a sleepy region into a bustling real estate market. Traditionally, the western region of the city always enjoyed the title of being ‘industrial’ and in fact remained so over the years. However, the game changed with the announcement of the Metro Rail project and the development of the four-lane elevated Tumkur Road. Today, the metro rail is operational and runs from Sampige Road to Nagasandra and from Baiyappanahalli to Mysore Road. And the rest, as they say, is history!

 

Infra-upgrades have opened up several peripheral locations in the west for residential development. And with robust connectivity and infrastructure, several developers are now utilising their land parcels in the region.

Growth along Regions

Interestingly, the realty market in West Bangalore is largely concentrated along three corridors. These include Tumkur Road, Mysore Road, and Magadi Road. These three growth corridors boast of ample availability of properties in affordable, middle income as well as premium segment. Here’s a snapshot.

Tumkur Road

With constant development, Tumkur is no longer known by the epithet of Bangalore’s poor cousin. The growth of this stretch can be largely attributed to improved connectivity to South Bangalore through the NICE corridor.

Laurel Heights by Salarpuria Sattva

Situated up to a distance of 70 km north-west of Bangalore along NH-206, this stretch is further opening up for residential, industrial, commercial and retail growth. The ‘Smart City’ tag for Tumkur is expected to ease the pressure on Bangalore’s resources. Further, the proposed Mumbai-Bangalore Industrial Corridor is likely to leverage the residential, commercial and industrial infrastructure along with the existing and ongoing projects. The region is also being promoted as one of the large industrial hubs in the city, especially Peenya Industrial Area.

Malleswaram, Yeshwantpur, Jalahalli are some of the prominent localities along the Tumkur Road. The property values usually vary from Rs. 4,000-7,000 per sq. ft. As per the property segmentation, Tumkur Road has a good mix of apartments, villas and plots.

Realising the immense potential that the stretch holds, many leading developers have already launched their projects here. Some of the popular ones are New Haven by Tata Value Homes, Godrej Gold County by Godrej Properties, Salarpuria Sattva Laurel Heights, and Opus by Salarpuria Sattva, among others.

Mysore Road

Bangalore-Mysore Road

Built by the Karnataka Road Development Corporation Limited, Mysore Road (149km) covers a massive area from the outskirts of Chamrajpet right up to Nayanadanahalli and further down towards Kengeri. Apart from enhancing the connectivity between Bangalore and Mysore, the stretch has witnessed decent real estate activity over the last few years.

NICE Corridor, proximity to the Outer Ring Road (ORR), and metro rail are the major factors catalysing growth in the region. With ample availability of land, prices are still competitive along this stretch. While one may find a couple of affordable projects here but the stretch is largely dominated by mid-segment properties. At present, the capital values fall in the range of Rs. 3,500-6,200 per sq. ft. As per the property segmentation, multi-storey apartments can be found in abundance. Interestingly, plotted layouts also have decent supply.

Rajarajeshwari Nagar, Vijay Nagar, Kengeri, Uttarahalli, Nayandanahalli, and Banashankari 5th and 6th Stage are few of the prominent markets along this stretch. Brigade Panorama by Brigade Group, Habitat Iluminar by Habitat Ventures Pvt Ltd, Rays of Dawn by Provident Housing, ICON South by G Corp (Banashakari) and Enchanta 2 by Pride Group (Vijay Nagar) are some of the prominent ongoing projects along Mysore Road.

The proposed upgrade of the current four-lane highway to a six-lane and completion of Namma Metro Phase II are the two projects that will further act as a catalyst in driving residential demand in the region.

Magadi Road

Running through the heart of West Bangalore, Magadi Road is one of the earliest developed real estate stretch in the city. A 43 km long area, it passes through prime micro-markets such as Rajajinagar, Kamakshipalya, Sunkadakatte, and Gandhi Nagar.

The social infrastructure on this road is highly developed with good educational institutes, hospitals and clinics, banks, and supermarkets. Bangalore City Railway Junction is mere 4 km away from here while Majestic Bus Stand is at distance of about 6km.

Puravankara Limousine Homes by Puravankara Projects Limited

Since the operation of Namma Metro Purple Line last year, Magadi Road has become one of the major hotspots for development owing to its connectivity to key precincts along the CBD. Currently, the property values are in the range of Rs. 4,000-8,500 per sq.ft.

At present, there are several under-construction projects that are slated for completion in the next two years. These include Puravankara Limousine Homes by Puravankara Projects Limited, Phoenix One West by Phoenix Mills Ltd, Provident The Tree by Provident Housing, Purva Sunflower by Puravankara Projects Limited, and Prestige West Woods by Prestige Group, to name a few.

Infrastructure Upgrades on the Anvil

Peripheral Ring Road

The Phase I of PRR will be instrumental in connecting Tumkur Road, Bellary Road, Old Madras Road, Sarjapur Road, and Hosur Road. This is expected to be operational by 2018-19. Once the PRR becomes operational, the commute time to International Airport from Tumkur Road will be reduced by 50 per cent from current levels. Further, new areas for development are also likely to open-up.

Namma Metro

Metro train at Bypanhalli Metro station during a press preview in BangaloreThe Extension of Phase I of Metro line connecting Whitefield (in the East), JP Nagar (in the South), Kengeri (to the West) and Nelamangala (to the North) is expected to be operational by 2019.

Satellite Town Ring Road

The 90mt. wide Satellite Town Ring Road (STRR) have four lanes and two service roads proposed. This is expected to link nine towns, including Doddaballapur, Devanahalli and Hoskote with Bangalore. If everything goes as planned, the work on this project is likely to start by the end of 2017.

BMIC Corridor-NICE Road

Four-lane Expressway of 111km between Bangalore and Mysore; four-lane Link Road of 9.1 km connecting Expressway to the junction of Chord Road and Mysore Road; and five new townships are proposed along the BMIC. As of now, only 41 km of peripheral, 8.5 km of Link Road and 4 km of Six-Lane privately tolled expressway is fully operational.

The upgraded elevated Tumkur Highway connecting Nelamangala, announcement of the Bangalore- Mumbai Industrial Corridor (BMIC), swift connectivity to the airport and the ORR have all worked in favour of the western region of the city.

Bangalore- Mysore Highway alone has seen a tremendous increase in the urban sprawl in the last couple of years. Proposed Bangalore-Mumbai Economic Corridor (BMEC) will further enhance the realty prospects of this region in the times to come.

Conclusion

In a nutshell, the western region, undoubtedly, holds immense potential for further real estate development. Ample land availability coupled with several infrastructure upgrades in the pipeline is likely to catalyse the residential and commercial demand in the region. Moreover, with comparatively low property values, micro-markets here provide a favourable entry point for both end-users and investors.

Here’s Why It Makes Sense To Buy A Property In India!

Since time immemorial, apna ghar (our own home) is a dream cherished by several Indians. More than a need for a roof over one’s head, owning a home is an integral part of our culture; something similar to education or marriage. Apart from self-use, over the last two decades, real estate gradually evolved as a prominent asset class for investment. Many investors took the plunge in the market in order to broaden their portfolio.

In Tier II and III cities, owning a home or a property is a strong indicator of a person’s social standing. With increasing avenues of employment in the smaller towns and cities, people these days are utilising their properties that were lying dormant all this while for monetary gains.

The importance of real estate in India can also be gauged by the fact that the Indian judicial system is clogged by property disputes. A study conducted by an NGO (Daksh) in 2016, that analyses the performance of the judiciary, revealed that a whopping 66 per cent of cases studied were related to property litigation.

Cut to 2017. Today, due to several macroeconomic factors, discussions as to why investing in real estate is no more profitable are doing the rounds. While a few opine that stocks and fixed deposits fetch better returns, there are a few who have gone to extent of saying that the crash of the Indian real estate market is almost inevitable. There is a feeling of a palpable sense of emergency and exasperation in the market.

How Did We Reach This Situation?

Eldeco Inspire, Sector-119, NoidaOver the last decade, Indian metropolitan cities have developed way beyond their capacity with a frenzy of construction. With the constant demand for housing, the concrete mixers just never stopped churning homes after homes. Satellite cities that were supposed to be the solution for crowded main city looks like a painting depicting an aftermath of a curfew. Tall buildings with no occupants, or let’s just called them ghost cities for the sake of simplicity, dominate these cities’ spectrum.

The rising level of unsold inventory in Indian real estate market is scary. This situation further worsened with the surgical strike against black money last year. Post-demonetisation, the sales volume of apartments reduced drastically. As per the market reports, property values declined too. While the scope of negotiation for buyers definitely widened during this phase, there were a few sellers who resorted to anchoring.

Beginning of Acche Din?

Buyers’ Market: Interestingly, post-demonetisation, speculative investors that formed a major chunk of Indian realty sector went either in hibernation or just resorted to other asset classes like the stock market or mutual funds. This, in a way, paved way for it to become a buyers’ market.

Transparency: With revolutionary reforms like RERA and GST, the anomalies plaguing the real estate sector are likely to reduce in the times to come. It wouldn’t be wrong to say that these reforms have reinstated the faith of buyers in the realty market. This can be gauged by the fact that the vacant inventory is reducing, sales volume is gradually picking up the pace, developers are focusing on completing their existing projects, and property prices are also showing signs of revival. In all, the situation does seem to be getting back on track.

Improving Infra: Not to mention, the infrastructure of our cities is also improving constantly.  The enhanced connectivity via metro rail and improving road infrastructure are boding well for the realty sector. This year’s budget granted the largest-ever allocation to rural housing and improvement of road networks. Enhancement of airports in Tier II cities and increasing the allocation for metro projects across the country are likely to be instrumental in planned growth of the cities.

Budgetary Reforms: One needs to give it to the current government for realising the importance that real estate holds in the country.  The accordance of Infrastructure status to the affordable housing was a great move that is expected to act as a catalyst in achieving the dream of Housing for All by 2022. Other initiatives include refining the area definition for affordable homes from a built-up area to carpet area, thus increasing the number of projects within its ambit.

Consumer Friendly Schemes: To encourage prospective buyers to take the plunge, the government has also announced several reforms. These include the modifications in the EPF scheme, the Credit Linked Subsidy Scheme (CLSS), reduction in the home loan interest rates, to name a few.

The market, today, indeed has become a buyers’ market.

So, Is the Situation Really Grave?

Has real estate lost its sheen to other asset classes? Well, we must understand that real estate is cyclical in nature. The dynamics are impacted by simple demand and supply logic or even by the economy in general.

Before delving further, let’s understand the real estate cycle. To begin with, it consists of four stages.

Phase 1: Popularly known as the Recovery phase, this is largely when the market gradually starts to recover from a severe downfall. At this point in time, the construction is limited and the vacant inventory declines, ultimately resulting in price rise.

Phase 2: After recovery comes the phase of Expansion. With increasing demand, the construction activity shoots up during this phase. However, demand outdoes the supply and vacant inventory continue to rise along with property values. Several investors wait for this period to garner maximum returns on their investments.

Phase 3: This phase is marked by Hyper Supply as the market at this point is very bullish. Increase in property prices coupled with heightened construction activity, many investors look to park their money in the property market. While the demand may reduce during this phase, the supply cannot be cut off immediately due to active construction activity. This results in a demand-supply mismatch.

Phase 4: Last in the cycle comes the Recession where the demand for housing continues to decline and the vacancy levels go up. This is when developers face a cash crunch and property values start to decline further. While this phase is not conducive for investors to make any move, it provides end-users with a plethora of options at better prices.

This said, there are a number of factors that impact the real estate cycle. If we have to go by market research, it takes about 18 years for the real estate cycle to complete in the US and Europe. Now, considering the year 1991 when the Indian economy started to catch pace, at present, we should be somewhere in the middle of the second real estate cycle.

A Major Problem!

All this boil down to one question – if the demand is high in the market, why is that the unsold inventory is still mounting?  Well, this is because there is a dearth of the ‘right’ product. Over the last few years, developers have just been launching projects left, right and centre without giving much heed to what is really needed. Also, it has been observed that developers tend to follow the herd when it comes to launching projects.

It is high time that developers start taking a cue from what buyers want and give them a more suited product. Real time data and analytics can solve half the problem.

Why Real Estate Will Flourish in The Country?

At present, the market may be under-performing but real estate is one thing that will never become non-lucrative in the Indian context. Here’s why.

  • Not just the middle-class, the major portion of the NRIs, HNIs and UHNIs portfolio comprises of real estate. It is bound to remain like that as property in India is something that keeps NRIs connected with their Indian roots.
  • The demand for housing is just going to grow in the coming years. India’s population is anticipated to outgrow China’s population by 2050. So, clearly, the demand for housing is perennial.
  • Moreover, with several MNCs setting foot in the country, the demand for commercial real estate is also expected to grow by leaps and bound.
  • Lastly, it will be imprudent to ignore the sweet connections of our bureaucrats with real estate.

The Times They Are A-Changin!

The fact that real estate has fetched higher returns in the past cannot be ignored. However, it is imperative that one must change the outlook with changing times. We are no longer living in an era where real estate investments will fetch great returns in a couple of months. This, in fact, holds true for any other asset class too.

Considering the current market scenario, property investments should be made from a long-term perspective.  For those eyeing capital gain, opting for under-construction properties at the time of launch would be the best option.

Being realistic with the ROI is also important.

Growth potential of the location must be analyzed with utmost seriousness as it can have a cascading effect on the property prices. A locality with sound social and physical infrastructure, adequate public transportation, and balanced supply and demand should be taken into consideration. Remember, a location can make or break your investment.

Last Words…

All said and done, it is not right to say that buying a home in today’s scenario is a bad idea. As mentioned above, like all other assets, real estate too is cyclic in nature. And as they say, after a storm comes a calm. However, considering the uncertainties in the economy and the job market, it is advisable to check one’s financial stability before investing.

Always remember these lines by Franklin D. Roosevelt, “purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”

Truly, cautious investment at precise time at a ‘’correct’’ location is more likely to reap you benefits in the times to come!

Karnataka RERA: Deadline of July 31 to Register Projects Too Harsh on Developers!

RERA Act 2016

While real estate developers across country are rushing to get their ongoing projects registered with the deadline under the Real Estate (Regulatory and Development) Act (RERA) ending today, Karnataka is facing the maximum heat! Here’s why!

A year after dragging its feet on a law, on July 10, 2017, the Karnataka state government finally notified the Real Estate (Regulation and Development) Act 2016. Despite being one of the first states to notify the draft rules last year, the ‘prolonged discussion’ took the government so long that resulted in the delay. It was expected that the law would be accepted countrywide by May 1, 2017 as the center put it out last year. However, Karnataka like several other major states maintained a status quo till July of this year, the brunt of which is being faced by the developers.

Just after two weeks of launching Karnataka Real Estate Regulatory Authority, the government launched the portal for property registration on July 25, 2017 with the short deadline of July 31. This gave developers less than a week’s time for registering their projects.The notification clearly stated that non-adherence to the rules will attract a heavy penalty, which is either imprisonment or 10 per cent cost of the project.

Come tomorrow, and developers will no longer be able to make any sale unless their project is registered.

Not to mention, as per RERA, a three-month window should have been ideally given to the developers to register the projects from the day the Act was enacted on May 1, 2017.

Developers in the state feel cheated. Few even feel that the provisions of the Act are draconian and arbitrary. And why won’t they? After all, developers in Maharashtra got a window of about 90 days to register the projects! And despite proper infrastructure, there were a lot of ambiguities about everything. It took time for developers to sort things out.

Another major issue that has come into light is the fact that while it is mandatory to upload Agreement to Sell (ATS) in the RERA website, developers unfortunately have not received this document from the respective state governments. So, how on earth are they going to register their projects?

A question that often pops up is that developers were aware that this was going to happen, so why didn’t they prepare accordingly? A point well taken. But one must also realise that any new law or provision takes time for everybody to understand. And developers are also taking their time. Moreover, as many property pundits have pointed out that registration of a project involves submitting several documents, sanctioned plans, etc, which is a cumbersome process.

Not just that, there have been several other problems. For instance, in Gurgaon, at first, there was no online system available for registering the projects. RERA sites have also crashed multiple times in several situations. Also, the Karnataka RERA website allots only 5 MB per project to upload related documents, which has become a stumbling block for many.

RERA, undoubtedly, is one of the greatest things that has happened to the Indian real estate sector. However, the way things are shaping up shows pathetic and more importantly sorry state of the management. The Karnataka’s case is a clear example of how a little crap spoils the whole brownie. Nobody is negating the wrong-doings and the clandestine practices followed by a few in the sector, but is punishing everybody a right thing to do?

Government must also understand that such a short deadline can result in several errors, which rectifying later would become a tedious task.

Earlier, developers in the state also had apprehensions pertaining to the rule that stated, “a builder could apply for an OC only if it has been certified by a competent agency. If the developer has already applied for OC, the building is exempted from RERA regulations.” Many believed that this rule was stringent as they have to get in place water connection, electricity lines and other things before applying for OC.

There have also been concerns regarding the registration fees in the state which is much higher when compared to other states. For instance, the registration fee in Gujarat is Rs 10,000 while in Karnataka it is Rs 25,000 for individual brokers.

In fact, for the penalty clause, the government has used the same yardstick for developers and brokers, which did not go well with the latter. The penalty is either imprisonment or 10 per cent cost of the project. Brokers, who make about 2 per cent commission per sale, felt cheated with this move as well.

Why is the state government blinded towards these crucial issues? If they cannot notify the rules within the set deadline, why aren’t developers given some grace period? Why are the issues pertaining to adequate infrastructure not been addressed and solved?

As we speak, we really hope that the deadline for the registration in the state gets extended so that the developers do not have to burn the midnight oil tonight! One thing that looks definite is that not all the projects are going to be RERA compliant from tomorrow. It will be interesting to see what the dawn would bring for the real estate sector.

Has the Real Estate Act raised eyebrows in Karnataka?

RERA Act 2016

Ending months of uncertainty, the Karnataka government finally passed the Real Estate (Regulation and Development) Act 2016. A statement issued by the State law minister, TB Jayachandra, read, “the rules are on the lines of Gujarat and Rajasthan, but the state has largely adopted the central law.” Though touted to be a harbinger of change for the overall realty sector, the notified rules of the Act are being largely debated by the real estate fraternity and real buyers alike.

While the Act has been welcomed by industry stalwarts, buyers, on the contrary, are not really satisfied. Few have even gone to the extent of blaming the state government for defeating the whole purpose of a law passed by the Parliament. The seriousness of the matter can be gauged by the fact that the all India chapter of Fight for RERA has decided to file a petition in the Supreme Court over the dilution of rules by the states (including Karnataka). Further, the Karnataka chapter is also planning to challenge the state government separately. In fact, there is a petition that is being widely circulated in the social media requesting the Chief Minister of Karnataka to include all ongoing projects under the ambit of RERA.

Interestingly, despite being one of the first states to notify the draft rules last year, it failed to set up a state-level regulatory authority and release the final rules within the set deadline. This resulted in denizens getting up in arms against the state government and blaming it for intentionally depriving the consumers of reaping the benefits of RERA.

The government, however, claimed that the delay was on account of ‘prolonged discussion.’ The noted members of the authorities were constantly deliberating on whether to include or exclude ongoing projects under the Act. Buoyed by this delay, thousands of home buyers were waiting with bated breath for the Act to come into place. Finally, the dust of uncertainty settled with the state cabinet passing the bill on July 5, 2017, albeit with a few changes.

First and foremost, the decision to exempt projects that have executed 60 percent of the sale deed has not gone well with the buyers. Why? Well, simply because even after the project is half completed, in many cases, the construction work proceeds at a snail’s pace. In fact, there are certain projects where construction is almost completed but the buyers have not got the possession. The move has been welcomed by the developers as they feel that had all projects come under the ambit of RERA, it would have adversely impacted the property values and construction progress.

The decision, however, raises several serious concerns. To begin with, there is no clear mechanism as to how the stage of completion of a project will be defined. Developers can potentially manipulate it in their favor as the topic is clearly subjective. Moreover, if the final decision of this determination is left to the builders, many fear that the Act will just be another useless law.

The decision has also drawn flak as aggrieved citizens strongly believe that it has been announced keeping in mind BDA and Karnataka Housing Board. Had all projects were brought under RERA, the government would have been forced to pay huge penalties to allottees in layouts such as Kempe Gowda Layout, where basic infrastructure including sanitary and water lines is a distant cry from reality.

The move is also likely to result in developers focusing more on new projects rather than the ongoing ones. The new projects will have to follow the stringent guidelines and meet the set deadlines without any fail. Thus, the chances of projects that are 60 percent completed getting delayed cannot be ruled out.

All said and done, the Act could have definitely been better and more in favor of consumers. As we wait for a Gazette Notification to be issued, let’s take solace in the words of Venkaiah Naidu, “the Real Estate Act is coming into force after a nine-year wait and marks a new beginning of a new era.”