Tuesday, August 28, 2018

spiritual comer

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Monday, August 27, 2018

RERA - Promoter's spl. bank a/c - AUDIT nd CERTIFICATION by...!

https://www.google.com/search?q=rera+bank+account&sa=X&ved=0ahUKEwiN-dX9-IzdAhXJdisKHQD_BQgQ1QIIhQEoAA&biw=1280&bih=694

 Provisions Of IT Act (Of contextual relevance)

 45. Capital gains 1
(1) 2 ] Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in sections 3 4 ] 54, 54B, 5 ] 6 7 54D, 8 54E, 54F 9 , 54G and 54H]]]]], be chargeable to income- tax under the head" Capital gains", and shall be deemed to be the income of the previous year in which the transfer took place.
2. Section 45(5A)

2.1 Section 45 (5A)- Notwithstanding anything contained in sub-section (1), where the capital gain arises to an assessee, being an individual or a Hindu undivided family, from the transfer of a capital asset, being land or building or both, under a specified agreement, the capital gains shall be chargeable to income-tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority. For the purposes of section 48, the stamp duty value on the date of issue of the said certificate, of his share, being land or building or both in the project, as increased by the consideration received in cash, if any, shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset:

Provided that the provisions of this sub-section shall not apply where the assessee transfers his share in the project on or before the date of issue of said certificate of completion. The capital gains shall be deemed to be the income of the previous year in which such transfer takes place and the provisions of this Act, other than the provisions of this sub-section, shall apply for the purpose of determination of full value of consideration received or accruing as a result of such transfer.

2.2 Explanation :- For the purposes of this sub-section the expression—

  (i) "competent authority" means the authority empowered to approve the building plan by or under any law for the time being in force ;

 (ii) "specified agreement" means a registered agreement in which a person owning land or building or both, agrees to allow another person to develop a real estate project on such land or building or both, in consideration of a share, being land or building or both in such project, whether with or without payment of part of the consideration in cash ;

(iii) "stamp duty value" means the value adopted or assessed or assessable by any authority of Government for the purpose of payment of stamp duty in respect of an immovable property, being land or building or both.'.

Section 50C uses value adopted by the Stamp Valuation Authority (SVA) for the purpose of levying stamp duty on registration of properties, as guidance value to determine undervaluation of land or building if any in the sale agreement. In case sale consideration received or claimed to be received by seller on sale of land or building or both is less than value adopted by stamp valuation authority, such value adopted by SVA would become actual sale consideration received or accruing to the seller. Therefore, capital gain would be Valuation as per stamp valuation authority reduced by cost/indexed cost of acquisition.

However, budget 2018 has brought about an amendment in section 50C whereby no adjustments shall be made in a case where the variation between stamp duty value and the sale consideration is not more than five percent of the sale consideration. This has been introduced in order to minimize hardship in case of genuine transactions in the real estate sector.
As per the RERA Act, the promoter has to maintain a 'separate account' for every project undertaken wherein 70 percent of the money received from the buyers shall be deposited. Such funds can only be used for the purposes of construction and land cost. Such a fund can be maintained with any scheduled bank. "In RERA, escrow and separate accounts mean one and the same thing", says Nair.

Withdrawals from the separate account
The withdrawal from the separate account wil .. 


Not an escrow but a separate account
Contrary to what is commonly known and what the initial real estate bill talked about the 'escrow account', the RERA Act as it stands today, says, "The account has to be self-maintained and is not an escrow account requiring the approval of the Authority for withdrawal."

As per the RERA Act, the promoter has to maintain a 'separate account' for every project undertaken wherein 70 percent of the money received from the buyers .. 


Read more at:
//economictimes.indiatimes.com/articleshow/58242934.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Sanction limits and audit
To avoid any misuse of the funds, the promoter is required to get his accounts audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by such chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilize .. 

Read more at:
//economictimes.indiatimes.com/articleshow/58242934.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

The concepts (terms/ phrases), with mutually distinct connotation, fitting /be appropriate depending on the given context,  calling for a sharp FOcUS>

>accruing 
>arising 
>received

> receivable /deemed to be received

> transfer (-effected)
As per section 4(2)(l)(D) of RERA Act;
 ‘seventy per cent. of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose:

Provided further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project’ 

 Portion highlighted - TO FOCUS ON THE AREAS  FRAUGHT WITH  PROBLEMS IN IDENTIFYING AND DETERMINING THE EXACT ...; ESPECIALLY, IF PROMOTER IS ALLOWED TO DEVELOP AND CONSTRUCT UNDER A jda WITH LANDOWNER - SEE BELOW >   
Palkhivala's TEXT Book (EXpert commentary nd CAse LAw) -

 Pgs.

 RERA - 'Cost of   ', 'realised', 

Project , if under a JDA 

 Landowner, by and large,  'allows' promoter to develop on the land owned , for construction and sale of  UNITS in a housing  complex BY PROMOTER ; 

 By whatever name called,- licence, lease (short term or long term) or whatever- consideration  in kind- in the form of one or more constructed units, plus cash (Cheque) 

landowner - taxed (CGT) on FMV of the UNIT(s) on the date of transfer +Cash- say X

As a corollary, cost to promoter of the land must be taken as the same i.e. X 

 Premised so, also for deposit in the spl. bank account, it is the same value - X, to be considered 

And, for obvious reasons, such a value , it is inconceivable, could be ascertained /determined at any point of time earlier than the final completion of the project, and the units are ready for 'possession' and 'final conveyance' to purchasers , so also the landowner .  

See posted comments @https://taxguru.in/corporate-law/difficulty-issue-ca-certificate-rera.html

ALSO Cross Refer (of EQual RElevance) Posts on,- GST On Realty 'under constrution housing complex' ("Deemed Construction Contract")- Why the Machinery for Levy  is absent (or malignant)- 
Say (Gist) -  https://vswaminathan-swamilook.blogspot.com/2018/01/swamilook-blogs-on-gst-et-al.html

Posted by at 1 comment:

Sunday, August 26, 2018

INsurance OF HOUSING COMPLEX - A complex dilemma ?!

An Alert >

Submitted by vswami on 1 May 2015 - 8:40am.
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Is your (or your or...) apartment building secured by Property  Insurance Cover ?
Not to Bother ! But , anyway, Read , for whatever its worth :
Is your property insured for a Nepal-like earthquake?
Comment (reproduced):
If diligently scouted around, any place/location across the country, with special focus on multi-storeyed buildings, - ongoing in the name of vertical expansion, considered by and large , rightly or wrongly as inevitable,- one is sure to find that, it is rather an exception than a rule, that most such properties stand insured or fully insured.
Going by information personally elicited from a leading insurance company official, the wisdom of why insurance cover -for properties, despite being called 'immovable' properties, either during construction, or later after its completion,- is most essential / imperative, no less than individual's 'life cover', has remained unrealized /to percolate through.
In many states, e.g.in Karnataka, in the special enactment governing apartments, there is a clear provision for having such insurance cover. And under the scheme of the law, the elected or selected people (call it managing committee or any other), who are acting in a representative capacity for and on behalf of the apartment owners, are entrusted with the duty and responsibility to, as part of the overall 'maintenance', to have and keep alive an adequate insurance cover.
Further, having regard to the otherwise far reaching consequences, it is the duty of the appointed 'auditor' to make a proper inquiry, and have this aspect,- of course being one among the several others,- specially covered in his annual report to the body of the apartments owners (residential or commercial)in a building complex.
It is, however, anybody's guess as to how many of the mushrooming apartments’ buildings / or anyone or more of the owners are even aware or conscious of, the foregoing aspects, so as to be fully or even adequately taken care.
For that matter, so far as is known, even the lending institutions, not barring leading banks,- providing finance to the builders and the buyers, hence having vested interest / stakes,- do not seem to have ever seriously thought of, so as to safeguard and keep protected their own interests.
In short, by and large, the reality of life is rested on the ingrained human /commonly ruling belief, - ignorance is bliss.
KEY NOTE: If remember right, as personally opined on previous occasions (see old Posts), most  hassles and hurdles commonly faced in apartment complexes in Bengaluru could possibly have been avoided/obviated, or a tleast been consderably mitigated, had every other concerned, such as the advising professiinals (including the CAs auditing the accounts of the builders, and after take over, of the 'society' (RWAs) or  apartment owners' association) acted dutifully and diligently in discharging their official functions.
Though at the cost /pains of repetition, in the context herein, attention needs to be drawn to the viewpoints repeatedly shared on the potential significance and vital importance of the several mandatory formalities requiring compliance .As repeatedly urged, in cases commonly come across, in which the promoter /seller of apartments has left unfulfilled- even in those instances in which the purchasers are, in compelling circumstances, left with no other option, coerced / obligated to resort to what is known as 'financial take-over' - it is one such requirement, being the ultimate formability of 'FINAL CONVEYANCE’ remaining unfulfilled, that should be of  immense advantage and hoped to  bring succour to the aggrieved purchasers. For knowing more, refer the previous posts on this specific topic of most concern; so also the related (personal) Google blogs @'swamilook'.
For Ready Reference >
Final Conveyance of Property in Apartment Building > When ...
·  FINAL CONVEYANCE OF PROPERTY IN A BUIDLING OF ...
·  swamilook: "Deemed Conveyance"
·  swamilook: MOdern DAy Concepts
·  Understanding - Deemed Conveyance - Lawyersclubindia
Tail Note :
Open to Edit; and invite the concerned rest partaking in the discussion, to frankly share own experience and view points, so as to try and serve the intended purpose / avowed objective of own and the common good as well.


For an Update on STP, the ongoing struggle of old apt. complexes with BWSSB, refer the recent Post http://bangalore.citizenmatters.in/articles/42

Apropos previous Post

Submitted by vswami on 2 May 2015 - 8:54pm.
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66 users have liked.

On the aspect of CAs’ crucial role in relation to audit of ‘housing societies’ :

Ref. [PDF]Audit of Co-Operative Societies - ICAI Knowledge Gateway

Going by common experience, and as often criticised, by and large, just an any other field of professional-, besides business-, activity, there has always been a cavernous gap between theory (rules book) and actual practice, One such field pertains to audit of housing societies e.g. in Maharashtra CHS , in Karnataka AOA.
The ICAI as the apex supervisory body , having  control over its members acting as appointed external auditors   of such HSs, do seem to have comprehensive and valuable guidance material to such  CAs. What calls for a special noting is the special course meant to give a useful training to them, with a view to equip them suitably and adequately so as to enable them to duly discharge their audit functions and responsibilities, diligently and in the matter as desired and ideally expected of them; more so, from the view point of investors/owners of ‘units’, being stake holders,  in a residential building (s) complex. On that premise , one personally feels that  the referred practical  course/certification, in order to serve the intended objective, may have to be made, if not already so done,  compulsory and necessary qualification / precondition  for CAs to be appointed as auditors of HSs.
Over to, besides others concerned, the ICAI for due consideration of the suggestion herein above; and if agreed, acceptance and implementation at the earliest, – sooner than later.
NOTE: A copy of this link is being forwarded as a feedback, in view of the usefulness, directly, also to the ICAI, HO .
For an Update on STP, the ongoing struggle of old apt. complexes with BWSSB, refer the recent Post http://bangalore.citizenmatters.in/articles/42

Updates >

Submitted by vswami on 3 May 2015 - 12:52pm.
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72 users have liked.

For an Update on STP, the ongoing struggle of old apt. complexes with BWSSB, refer the recent Post http://bangalore.citizenmatters.in/articles/42

A 'PEP' talk

Submitted by vswami on 5 May 2015 - 3:48pm.
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54 users have liked.
Afternoon Musings:
How to protect your assets from natural disasters - The Economic Times
You can’t stop natural calamities but you can minimise their impact on your finances by taking adequate...
Here is an informative write-up, for use if mind to !
Reaction (Facebook-ed) :
“You can’t stop natural calamities but you can minimise their impact on your finances by taking adequate insurance cover. Find out the best ways to protect your home and valuables.”
Is it not easier done than said? Of course, if listen to common sense, the nature given most valuable of all gifts, sane answer can only be , - YES !
To dilate a bit, with remorse:
In the aftermath of recent Nepal earthquake of devastating intensity, spelling disaster to lives and properties of a significant magnitude, the whole town, rather the country, is talking (though not walking the talk) about the need for ‘home insurance’, including high-rise buildings. The tragedy /sad commentary is, the high-rise buildings who should be the most concerned of all, in any city or elsewhere, are the least perturbed and worried; reason is basically sheer callousness, ignorance  and imbecility of the highest level.
The special law almost every state has in force mandates the obligation to have blanket insurance for a building complex. And the duty and responsibility, as a package of ‘maintenance’, is entrusted to the managing or governing body to stick to and abide by the mandate, no sooner the property gets conveyed to and becomes the property of the joint owners of the complex. Until that point in time, it is the promoter/seller who owes it, as a legally enforceable responsibility, to his/its customers, and keep protected fully under an insurance cover.  The said responsibility, thanks to the low aroused in majority, has been, and continues to be, allowed to remain simply on paper for ages. Reasons behind are illusions /misconceptions of sorts. For intimately knowing at least some, if care and will to enlighten self, use the all powerful mouse on your table top, to Google search the plethora of material on the very same and related topics, by click, using a couple of fingers.  

Tail piece:

“Earthquake: Israel advises nationals to leave Nepal”

» Read more
Poor Mrs Grundy, a native for decades, however, is simply aghast, more worried than annoyed; for, knows not, whereto?


For an Update on STP, the ongoing struggle of old apt. complexes with BWSSB, refer the recent Post http://bangalore.citizenmatters.in/articles/42

Clue ? Elusive to ...

Submitted by vswami on 6 May 2015 - 8:18am.
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51 users have liked.
Stuck/stay-put @cross roads - Reason is,- the mutually confusing ‘sign boards’; no clue as ever, which one to take to, for intended (?!) destination!
Dr Swamy replied to a volley of questions on a wide range of issues like* black money, hawala, taxation,...
*none mutually un -related (-connected)
For an Update on STP, the ongoing struggle of old apt. complexes with BWSSB, refer the recent Post http://bangalore.citizenmatters.in/articles/42

"Class Action" - contd.

Submitted by vswami on 22 May 2015 - 7:50am.
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59 users have liked.
For in-house Activists/Participants
To draw Spl. Attention  TO>
India to get own version of class action lawsuits
Amendments to BIS Act to be tabled during next session
For an Update on STP, the ongoing struggle of old apt. complexes with BWSSB, refer the recent Post http://bangalore.citizenmatters.in/articles/42

Class Action -contd

Submitted by vswami on 22 May 2015 - 3:23pm.
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62 users have liked.
One more HERE
Protect consumers: Class action law suits will step up efficiency of courts and reduce litigation costs - TOI Blogs
Again, no attempt made at throwing light to supply any clarity ; but only renders the already commonly prevailing confusion(s), worse confounded. Worthwhile to have a look at the original  'text' of the subject enactment (amendments) itself, in order to get to know on a first hand basis, should  the provisions as drafted / structured selves suffer from deficiencies / lacunae !
Mentiions repetitively , - 'law suits' - does that refer to regular proceedings before the Authority to be set up, just as  /parallel to civil courts; and not before or coresponding to the extant consumer courts  as imagined !
Is the lawyers' circle, by chance, better informed / equipped, to clarify ?

For an Update on STP, the ongoing struggle of old apt. complexes with BWSSB, refer the recent Post http://bangalore.citizenmatters.in/articles/42

Insurance of Apartment complexes in Bengaluru

Submitted by vswami on 12 June 2015 - 10:20am.
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61 users have liked.
An Update
This is follow-on of the previous posts on the subject matter.
Information since gathered from a so-believed reliable source is to the effect that Insurance company (ies) , when approached, refuse to provide insurance cover and issue a policy for an apartment complex . The reason said to be given is that unless and until the promoter/seller has affected the mandated  “Formal Conveyance” as per the KAOA (the special State law )- (what that really means and are its legal implications, refer the requirement as set out in detail in previous posts) the buyers, as a collective body of association of persons, do not have an  “insurable value”. .
Going by one’s limited knowledge , and understanding, of the scope/amplitude  of the concept of “insurable interest” , however, and as personally viewed,  such an excuse is prima facie misconceived and logically faulty; has no leg to stand on.
The field reality is , invariably, rather mostly, promoter/seller never cares , though lawfully obliged, to  take and maintain insurance  cover for the property , in the interim; that is, after the apartments have been sold; but the ‘final conveyance’, through handing over  of the title and other related property documents,  to  the Association, for no fault of it, is pending /deliberately delayed.
What needs to be noted is that, should the mentioned excuse be taken to be valid, wrongly so, but were ignorantly conceded/ yielded to, then most of the apartment complexes, including the RWAs, in Karnataka would be left with no insurance protection; thereby remain exposed to  great peril.
The intention in sharing above is with a view to eliciting information on what has been the common experience of the apartments’ complexes all around.
KEY NOTE:
On the concept of, - INsurable Interest in relation to a 'proerety' , if scouted around, one can readily find a host of material of positive guidance. HERE is one: http://legal-dictionary.thefreedictionary.com/insurable+interest
This is seen to amply support the viewpoint shared and stressed herein above; if so, a denial by insurer to underwrite the co-purchasers' - ASsociations' 'risk' in an apartment complex is, to say the least, highly offensive, irregular and illegal.

NOTE:

As anyone is expected to be aware (refer posts before), largely prevailing  absence of or inadequacy of property  insurance  cover has provoked the most concern;  and  been openly given  went . Further that, the IRDAI,  as the empowered Regulatory authority has lately proposed certain measures to bring about the long desired but outstanding discipline in the insurance sector – See HERE : Insurers must correct pricing anomalies: IRDAI

(Left open/ Invited to EDIT/share)
For an Update on STP, the ongoing struggle of old apt. complexes with BWSSB, refer the recent Post http://bangalore.citizenmatters.in/articles/42

Posted by at 6 comments:

FEED -input To Housing Ministry On REal EState BILL 2012 >>

Looking WAY BACK  < 2012 !

B/F

@praja.in >
http://praja.in/en/projects/2011/08/04/anomalies-stamp-duty-valuation-pertaining-property-registration



This is sent as an Attachment to THE FEEDBACK MAIL TO responseonrealestatebill@yahoo.in>

I. 1. The more times one care to read, own initial conviction gets increasingly strong and fortified; in that, despite the attempt made/impression given to the contrary by the media through articles, etc. on the subject, the Bill (of 2011) does not seem to provide clearly and adequately, even if not with a wholesome set of teeth, at least sufficient teeth to make the regulatory authority (RA) really work effectively and forcefully; so as to fulfil the very basic objectives of creation of such an authority. Such objectives, as set out in the preamble and noteworthy among them are, - (a) ‘to ensure sale of  ...in an efficient and transparent manner’, and (b)’to protect the interest of consumers in..’.    For an appreciation /justification of such a view/reaction, what one needs to do is to mindfully go through,- first chapter by chapter, then section by section, and then, word by word used.  

2. Among others, jutting out are these:

Sections 63 and 64> These confer on the 'appropriate government' (i.e. state government) very wide and sweeping powers. They have the inherent potentials for the state government to, at its will, dictated by its own philosophy and approach, supersede the RA, thereby tending to downright override / veto the exercise (by the RA) of its powers independently, impartially and without bias.



Chapter VI> does not bear out any effective, or in any case, enough safeguards, for rendering the institution of the RA strong enough to successfully implementing and accomplishing the laudable purpose(s) of the proposed legislation; seemingly opposed to/belying what is being tom-tom med with a big noise in certain quarters.


Sections 70 to 73> what should be of concern is the discouraging purport and import of these sections. In one's sincere perception, they do not seem to provide any useful help to achieve the goal of the RA successfully working towards accomplishing the objectives of the legislation on the anvil.



For driving home what is sought to be conveyed, one is obliged to recall the bizarre story, given wide publicity in the media, of the open battle of wits (no wits !) that came to be fought, not long ago, between the two most powerful of all extant regulatory authorities namely, SEBI and IRDA. The point to be specially made a note of is that, - those are the two authorities established by law and commonly acknowledged as profoundly 'central' authorities,-not a 'state authority' like the one intended for realty sector,- with its jurisdictional powers extending to the country as  a whole. For an insight into that story (rather the inside-story), though now may have been forgotten, one may read > 






In a nut shell> The point requiring to be stressed is this: Keeping the above referred episode in mind, every conceivable precaution should be taken, by having in-built safe guards in the enactment itself, so as to ward off any similar, not otherwise unlikely, confrontation, - that is between the RA and the appropriate government (of the state(s)).


The most disturbing of all concerns is that, the Bill, on which comments have been invited, is quite incomplete. With almost every one of the host of 'Rules' and 'Regulations' spoken of in the Bill (ref. Section 2 (zf), (zg)) - WITHOUT WHICH THE LEGISLATION REMAINS INCOMPLETE, HENCE  CAN ONLY BE REGARDED AS STILLBORN - to one's knowledge yet remaining  to be framed and / or made known, what is in store is anybody's guess; a  wild one at that. For, as truly said, - devil is (OFTEN LURKS) in details.
Other comments:

II. IT IS SADLY OBSERVED, DRAFTING HAS BEEN DONE IN A GLARINGLY LIGHT-HEARTED AND CAVALIER MANNER.

IN SO FAR AS IT DEALS WITH 'UNITS' OF BUILDING(S), TO WHICH THE LEGAL CONCEPT OF 'CO-OWNERSHIP' ESSENTIALLY APPLIES, THE MOST CRUCIAL ASPECTS NOT COVERED OR EVEN BORNE IN MIND ARE THE FOLLOWING:

1. ALMOST EVERY ONE OF THE 'STATES' HAS ITS OWN ENACTMENTS, RULES, AND REGULATIONS, ALREADY IN PLACE, ON ITS INDEPENDENT STATUTE BOOK.

EVEN THE VERY SCHEME OF THINGS RESPECTIVELY UNDERLYING THEM, ARE NOT UNFORM BUT VARY; IN SOME RESPECTS, ALSO WIDELY.

2. SO FAR AS ONE KNOWS, IN SOME OF THE STATES (E.G. MAHARASHTRA AND KARNATAKA)THE 'UNITS' OF BUILDINGS THUS FAR GIVEN DUE LEGAL RECOGNITION / SANCTION, AND COVERED BY THE REFERRED SPECIAL ENACTMENTS, ARE OF TWO (only two) DISTINCT TYPES - FLATS and APARTMENTS.

3. ALL THE APPLICABLE PROCEDURAL REQUIREMENTS IN REGARD TO THE SAID TWO TYPES OF UNITS ARE MUTUALLY DIFFERENT AND MATERIALLY AT VARIANCE.

IN THE BILL, THE FOREGOING ARE NOT FOUND TO HAVE BEEN PROPERLY FOCUSED ON OR ACCORDED ANY SPECIAL ATTENTION AS ONE WOULD HAVE EXPECTED; MUCH LESS SUITABLY TAKEN CARE OF/COVERED, SO AS TO MAKE THE REGULATORY REGIME TRULY EFFECTIVE AND EVENTUALLY SUCCESSFUL.FOR, AFTER ALL,THE REGULATORY AUTHORITY IN ANY STATE, IF AND AFTER IT HAS BEEN INSTALLED, COULD, FOR OBVIOUS REASONS,CARRY OUT ITS FUNCTIONS ONLY WITHIN THE FRAMEWORK OF THE SPECIAL ENACTMENT, RULES, REGUATIONS.ETC., ALREADY IN FORCE IN THAT PARTICULAR STATE, NOT OUTSIDE OF THEM.

NOTE: These comments, in a manner of speaking, are no different but more or less go to reiterate some of those points of view conveyed to the Ministry wrt the earlier draft bill (for reference, see the Appendix hereto at the bottom.)

4. CERTAIN OTHER ASPECTS, EVEN THOUGH OF AN ELEMENTARY NATURE, ARE SEEN TO HAVE BEEN SIMPLY GLOSSED OVER, UNWITTINGLY OR OTHERWISE.  

   SELECTIVELY, THE FOLLOWING REQUIRE MENTION:

i)IN SECTION 2, (m), (n) and (o), the terms “development”, “development charges” and “development works” have been specially defined (see also,(r),(s)). The purpose is not known; for, nowhere else in the Bill, the said terms are seen to find any mention. May be, what has been lost sight of is the fact that, while in the earlier draft there were provisions for sharing, subject to mutual agreement, by the parties, of such charges, those provisions have been removed in the revised draft (presumably after reconsideration)(subject to a double check).

In section 2 (p), in defining the term “engineer”, in the nature of things, should it NOT have been specified “civil”.




In section 2 (y), also elsewhere, “deed of allotment” finds mention. One has not heard; much less know, of any such ‘deed’ executed for allotment; its purport or relevance not understood.

ii) Likewise not at all understood are these as well:

  (A)  Explanation under the first proviso in section 3. - ... to be developed in ‘PHASES’...
           
(THE VERY IDEA AS MOOTED, ALSO REPEATED IN SEVERAL OTHER CONTEXTS, IS   ABHORRING)
           
   (B) As to whether the ‘registration’ harped on and projected, rightly or wrongly, as the basic    requirement for compliance, calls for compliance in respect of everyone of the several projects a promoter may undertake, or on a onetime basis, seems to be not clear.

(THIS NEEDS TO BE GONE INTO, with a fine-toothed comb, AND SUITABLE CHANGES BE MADE, TO MAKE THE REQUIREMENT EXPLICIT)

   (C) Section 7 (1) (b) – “........  of the agreement entered into with the Competent Authority:...

(FOR WHAT ONE KNOWS, NO SUCH AGREEMENT , a formal one at that, is presently being entered into; if so, -SHOULD BE CLARIFIED)

     
5. As is common knowledge, there are certain crucial areas where the players in the realty sector often fail to properly comply with what the state enactment requires, even if mandated. Some such areas which have come to surface in recent times may be found covered, in detail, in the Blogs posted @ swamilook,  in public interest.

The following links may be seen to provide useful clues for identifying such areas:











IN PARTICULAR, DRAFTING OF LEGAL DOCUMENTATIONS, COMPLIANCE WITH THE PROCEDURAL REQUIREMENTS AS LAID DOWN IN THE STATE (S) ENACTMENTS- E.G. ONE SUCH AS THE MOST CRUCIAL  ONE- PROMOTER EXECUTION AND REGISTRATION BY PROMOTER OF –
‘DECLARATION’ (IN MAHARASHTRA AND KARNATAKA, IN THE PRESCRIBED FORM ‘A’)

A close perusal OF THE SEVERAL MATERIAL COVERED IN THE BLOGS ON THE TOPIC OF –REALTY might help in getting to know of, identifying precisely, and deciding whether all or anyone or more of them require to be suitably covered in the proposed enactment and /or in framing the pending Rules and Regulations.

III. CHAPTER VI (sections 48 and 49) is seen to contain the ‘key’ provisions, so to say. For, the setting up of a CENTRAL ADVISORY COUNCIL (CAC) as envisaged, seems to aim at ensuring the efficacy and eventual success in accomplishing the objectives of the machinery of the RA.
What calls for an incisive noting is that, as set out in Section 49, one of the functions of the CAC to be set up, -“shall be to advise the Central Government on:-
(a) all matters concerning the implementation of this Act;”
Having regard to the scheme of things, -if considered in conjunction with the more relevant and supervening provisions of each of the individual State enactments,- however, the implementation of this Act, as envisaged, is , in turn, going to be mainly dependent on implementation of the respective enactment already in force  in each State. In other words, in real terms, what is called for, and to be desirably expected is a profoundly complete and passionate  harmony, co-operation, and co-ordination amongst all the States on the one hand, and the RA on the other. What really in store is impossible to say with any certainty; only future can tell?


APPENDIX
Refer to the reproduced comments in the concluding portion, under the head, - key note @the Blog
http://vswaminathan-vswaminathan-swamilook.blogspot.com/2011/11/real-estate-regulatory-bill.html

Doc. B
Addendum>
(being sent today, the 7th instant)

IV. Based on an independent but close study of the Real Estate Bill (the revised text), in one’s conviction, many of its features/requirements could not at all be regarded to be new innovations or freshly introduced. For, most of them are to be found already incorporated in the extant individual enactments of State(s) (e.g. Maharashtra and Karnataka).  

The significantly crucial and the most important of them, in that order, are these:

1. Procuring from the concerned local authorities all the necessary approvals and sanctions for development / construction of a building project

2, Execution and registration of a ‘Deed of Declaration’ in the prescribed Form

3. Execution and registration of an ‘Agreement to Sell’
    (Model Form made available)

4. On completion of the project, before conveyance and giving possession, obtaining a completion /occupancy certificate from the concerned local authorities

5. Execution and registration of a Deed of Conveyance
    ((Model Form made available)

6. Compliance with all other related/connected documentations/ requirements at different stages of construction; and finally, including - Advocate’s certificate of ‘marketable title’, ‘no encumbrance’ certificate, etc. (these are enumerated in the Model Form of Conveyance)

Besides, the State enactment, the rules framed there under, read together with all other allied regulations do adequate cover all other connected matters: Contents of Agreement, Deed, and Procedure to be followed for registration, et al, - to the final stage of handing over the property to the co-operative society or co-owners’ ‘Association’ duly formed and registered.

The extant State enactment(s) cannot, of course, be rightly claimed to be fool proof, with no lacuna at all. Even so, none of such lacuna, a few in numbers, could be rightly adduced as an impediment, a serious one at that, which are so material or of a fundamental nature as to come in the way of promoters complying with the law. On the other hand, the largely prevailing non-compliance or by-passing of the law, for decades now, can only be attributed to the belligerent attitude of promoters, against it. In no small measure, traceable to also the government’s matching apathy, and nonchalant behaviour in failing to show any sincerity or make any attempt in implementation and enforcement of the law. Thus, it is the mutually contributory and complimenting callousness that has been largely responsible for the muddled state of affairs; that has gone on merrily, unchecked for decades.

It is in such an overwhelmingly disgusting context / vexing scenario that the proposed regulatory regime has come to be mooted and legislation proposed.
In view of, and keeping in full focus the foregoing, a truly effective strategy needs to be charted; and suitable remedial measures be taken.

One has the following primary suggestions to offer for consideration:

1. Same way as the income-tax department has done for its purposes of keeping a track of the transactions in immovable property, the Registry should be used by the RA, as the main gate keeper, for its purposes of implementation of the proposed enactment, both in letter and spirit, thereby, in turn ensuring strict compliance with the State enactment as well.

2. The final formats, as rightly proposed/envisaged in the Bill, for execution of Agreement to Sell, and for Deed of Conveyance should be got ready at the earliest and be made mandatory to be strictly adhered to / followed. 

Such steps, if devised in detail, and decided upon, should hopefully go a long way in ensuring that the procedural requirements are strictly complied with by the Promoters. Also safeguard and keep protected the lawful rights and interests of the allot tees / purchasers as avowed / sought to be secured by the law.

It goes without specially emphasising that, the key for successful functioning, and fulfilment of its own responsibilities, the RA should have in place absolutely effective machinery for a constant monitoring of the entire scheme of things, to its last detail.


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