Archive for January 2017

Noida twin-tower case: SC gives Supertech extension till March 20 to deposit Rs 10 crore

The case was listed to be heard on January 11, however, Supertech filed an interlocutory application for an urgent hearing seeking extension due to demonetisation, informed Shoeb Alam, counsel for some of the Emerald Court homebuyers.

Noida twin-tower case: SC gives Supertech extension till March 20 to deposit Rs 10 crore

File photo

NEW DELHI: The Supreme Court on Friday gave builder Supertech an extension till March 20 to deposit Rs 10 crore with the court’s registry for refunding home buyers of its twin-tower project in Noida.

The case was listed to be heard on January 11, however, Supertech filed an interlocutory application for an urgent hearing seeking extension due to demonetisation, informed Shoeb Alam, counsel for some of the Emerald Court homebuyers.

Supertech also asked for adjournment of the January 11 hearing, however, the court asked the company to file for adjournment on the same day, he informed.

The apex court in November had directed Supertech to deposit Rs 10 crore by January 3 to be used for refunding the home buyers of its Emerald Court project in Noida. It had also offered homebuyers an option to wait till the disposal of the case since in the event the Allahabad HC order dated April 11, 2014 is set aside. However, all parties seeking refund expressed unwillingness to await the outcome and demanded refund.

“We had asked for an extension of 12 weeks citing financial crunch due to demonetisation, but the court gave us a time of nine weeks to deposit Rs 10 crore,” said Keshav Mohan, counsel for Supertech.

In a big setback to Supertech, the National Building Construction Company (NBCC) in its report submitted to Supreme Court on November 8 last year said the construction of the twin towers — Apex and Ceyane — in its Emerald Court project in Noida were in violation of Noida Building Regulation (NBR), 2010. The report found out that the open space available between the two towers — Tower 1 and Tower 17 — is less than 20.45 metres.

Supertech, however, contested the findings of NBCC, saying the project was sanctioned in 2009 and NBR, 2010 was not applicable to it.

On April 11, 2014, the Allahabad High Court had ordered demolition of the two 40-storey residential towers on homebuyers’ complaint that the builder did not have necessary permissions to build these. The court had asked the company to refund homebuyers’ money with 14% interest.

The builder has already deposited Rs 5 crore as directed by the Supreme Court in July. The apex court in September also directed the builder to pay 10% of invested money per annum as investment returns to 14 people, starting January 2015, and to clear any arrear within four weeks.

DISCLAIMER
The news and data posted here is from various sources, published and electronically available. We have taken all possible care to verify and crosscheck the accuracy of the same. However, despite due diligence, sources may contain occasional errors.www.noidapropertydealers.co.in will not be responsible for any errors in such an instance.

Three Greater Noida realtors may exit housing projects

Vinod Rajput | Hindustan Times | Updated: Jan 07, 2017 00:09 IST

Three Greater Noida realtors may exit housing projects

Around one lakh homebuyers are affected by unfinished projects. According to builders, they are facing a fund crunch due to dip in sales (Sunil Gosh/HT Photo)

Authority officials said on Friday that of a total of 203 housing projects in the area, 65 are stuck and their developers need to reach a settlement solution under the new project settlement policy. They added that at least three realtors will exit from their respective housing projects as they have failed to begin construction at the site.

The project settlement policy is an umbrella policy that has multiple solutions for various builders.

Most of the developers whose projects are stuck were allotted group housing land in 2008-2010 and were supposed to deliver flats by 2012-13. However, they failed to deliver flats and clear land dues to the Greater Noida authority that provided them housing land on instalment basis.

Around one lakh homebuyers are affected by unfinished projects. According to builders, they are facing a fund crunch due to dip in sales.

“There are many reasons why realtors could not deliver and are facing financial issues today. First, there were litigations over land that delayed projects for around one or two years. Many inexperienced builders too came up and failed as they didn’t know the business. Many realtors also diverted funds collected from homebuyers. However, I hope things improve soon,” said Sunny Katyal, owner of Investors Clinic, a realty consultant firm in Noida.

On Thursday, Greater Noida chief executive officer Deepak Agarwal had held a meeting with 65 realtors to discuss issues pertaining to each project and asked them to submit a detailed project report (DPR) for each of them.

“These 65 projects face some sort of issues. We believe three will exit and eight need co-developers to finish the projects. The rest have pending land dues that they want extra time to pay,” said Janardhan Mishra, additional chief executive officer, Greater Noida authority.

Officials said a third of housing projects in Greater Noida are stuck for some reason or the other reason. Of these, if any realtor exits, their buyers will get their investment back instead of the promised flats.

In case of an exit, the authority will deduct 15% of the security amount deposited by the realtor against the housing land. If a realtor gets any balance amount, the authority will allot land for that amount.

“If homebuyers have made an investment in any project, including in these three, we will transfer the security fund into an escrow account from where we will help it reach investors,” said Mishra.

Amrapali Group, Unitech, Value Infra Group and Rudra Group, among others, took part in the meeting. Officials, however, refused to name the realtors who want to exit.

“A committee from an engineering department of the authority is conducting a survey on around 20 projects that we believe are stuck. Once the committee report is in, we will announce names of the realtors who will not be able to finish a project. We cannot name the realtors now because we are not sure of their projects’ progress,” said Mishra.

The authority said eight realtors have decided to introduce a co-developer to finish a project stuck midway. The co-developer will become a partner in a project and spend funds on completing it.

“We have asked all realtors to submit DPRs on their respective projects so that we can reach a solution. Most realtors want additional time to clear land dues so that they can finish the project. Each has its own issues. We will be clear once they submit their DPRs,” said Mishra.

The authority said that after DPRs are submitted and the engineering survey completed, it will announce the number of realtors who want to exit projects.

“The crisis in the Greater Noida realty market is an outcome of mistakes that took place in 2008 when the government allotted housing land even to those with no background in construction. Those who had funds bought land and came up with apartment complexes to make easy money. They sold flats cheap to lure buyers. They have failed to make profit and so are unable to deliver flats to homebuyers and land dues to the Greater Noida authority,” said RD Singh, real estate consultant.

DISCLAIMER
The news and data posted here is from various sources, published and electronically available. We have taken all possible care to verify and crosscheck the accuracy of the same. However, despite due diligence, sources may contain occasional errors.www.noidapropertydealers.co.in will not be responsible for any errors in such an instance.

Why it makes more sense to switch your home loan after this interest rate cut

Home loan borrowers servicing EMIs under the base rate should switch to MCLR to lower the interest burden. Here’s why and how you should go about it.

Why it makes more sense to switch your home loan after this interest rate cutThe start of the new year may have something to cheer for the home loanborrowers. Several banks have significantly reduced the interest rates charged on these loans.

The State Bank of India (SBI) has lowered its home loan rate from 9.10 per cent to 8.60 per cent and ICICI Bank from 9.10 percent to 8.65 percent, HDFC at 8.7 per cent, with other banks set to follow suit. Effectively, home loan rate has come down by an average of about 0.4-0.5 per cent after these announcements.

Noticeably, SBI’s one-year MCLR is at 8 per cent which makes the spread on its home loan 0.6 per cent. So, even though the MCLR of banks have fallen, the actual home loans are not at MCLR. Still, the writing on the wall is clear – there is more room to cut home loan rates by the banks.

Borrowers on base rate should switch now

If not all then at least the old borrowers who have been servicing their EMI‘s based on the erstwhile base rate system of lending, stand to benefit. Even though bank’s base rate hasn’t come down as much, they now have a stronger reason to switch to the current MCLR-based lending. With the recent interest rate cuts on loans by banks the differential between base rate at which old borrowers are servicing their loan and the current MCLR is widening.

For those who had taken loans after July 1, 2010, but before April 1, 2016, the loans are linked to the bank’s base rate. And for most of these borrowers, the home loan interest rate is around 10 per cent. After the recent rate cuts announced by banks, the average MCLR has fallen to about 8.75 percent or even lower. This differential of 1-1.25 percent in base rate and MCLR will help old borrowers to switch to MCLR and save on total interest outgo.

Why to switch now

The primary reason to switch from base rate to MCLR has to be the sluggishness seen in banks’ passing on the benefits of RBI rate cuts to borrowers. RBI’s repo rate cuts were not reflecting in the bank’s base rate but are a part of the factors that goes into calculating the bank’s MCLR so, the moment repo rate changed, MCLR was impacted.

Further, the MCLR takes into account the marginal cost of funds which includes the rate at which the bank raises deposits and other cost of borrowings. With banks flush with funds post demonetisation, the bank’s CASA deposits (current account-savings account) have swelled and have given the banks the leeway to go for such major rate cuts.

The base rate, on the other hand, has seen only marginal reduction since last 24 months. Post demonetisation, banks are expected to wait and see the impact once the restrictions on cash withdrawals are removed. If the funds don’t move out from the banking system in significant amounts, further rate cut is expected.

MCLR based borrowers

For the new home loan borrowers who have taken loan after April 1, 2016, there’s not much immediate benefit from the recent rate cuts. For most MCLR-linked home loan contracts, the banks reset the interest rate after 12 months for their home loan borrowers. So, if someone has taken home loan from a bank say in May, 2016, the next re-set date will be in May, 2017. Any revisions by RBI or banks will not impact their EMIs or the loan till the reset date

What’s MCLR mode of lending

A new method of bank lending called marginal cost of funds based lending rate (MCLR) was put in place for all loans, including home loans, given after April 1, 2016. Under the MCLR mode, the banks have to review and declare overnight, one month, three months, six months, one year, two years, three years rates each month.

Watchouts

In a falling interest rate scenario, quarterly or half-yearly could be a better option, provided the bank agrees. But when the interest rate cycle turns, the borrower will be at a disadvantage. After moving to the MCLR system, there is always the risk of any upward movement of interest rates before you reach the reset period. If the RBI raises repo rates, MCLR too, will move up.

Options for base rate borrowers

When the interest rate on your loan goes down banks, on their own, typically reduce the tenure automatically (instead of reducing EMI amount) and thereby, transfer the benefit of lower rate to the customers.

The base rate borrowers now have two options – switch to MCLR based lending with the same bank or else transfer i.e. get the loan refinanced from another bank on MCLR mode. One may also continue the loan on base rate, especially if the loan term is nearing the end.

The RBI has made it clear that banks should allow base rate borrowers to switch to MCLR. The existing loans can run till maturity or borrowers can switch to MCLR on mutually agreed terms.

Switching from base rate to MCLR within the same bank

It makes sense to switch if the difference between what you are paying and what the bank is offering now as MCLR is significant. And also in cases where the time for the home loan to finish is not near.

Switching loan from base rate to MCLR with another bank (refinancing)

If your bank is offering a high home loan interest rate (MCLR plus spread) then look for refinancing. Get the loan refinanced from a bank offering a lower interest rate. You may have to incur processing fees. However, banks are not allowed to charge foreclosure or full repayment charges. Other charges may include lawyer’s fees, mortgage charges, etc. Remember, the bank may ask you to buy a home loan insurance cover plan, which is not mandatory. Get the loan insured through a pure term insurance instead, in addition to any insurance that you already have.

Conclusion

Switching to MCLR in itself should help you save a substantial amount. In addition to switching the loan from base rate-linked to MCLR and thereby saving interest, prepare a systematic partial prepayment plan to further reduce the interest burden. It’s after all better to up your home-equity rather than making it a highly leveraged buy-out.

Why it makes more sense to switch your home loan after this interest rate cut

DISCLAIMER
The news and data posted here is from various sources, published and electronically available. We have taken all possible care to verify and crosscheck the accuracy of the same. However, despite due diligence, sources may contain occasional errors.www.noidapropertydealers.co.in will not be responsible for any errors in such an instance.

Land freed for developing industrial hub in northwest Delhi

A bench of Justices B D Ahmed and Ashutosh Kumar, in a recent order, dismissed a batch of 100 petitions challenging the land acquisition process.

Land freed for developing industrial hub in northwest DelhiNEW DELHI: A big chunk of land in northwest Delhi’s Kanjhawala has been freed by the high court for the Delhi government to develop it as an industrial hub.

A bench of Justices B D Ahmed and Ashutosh Kumar, in a recent order, dismissed a batch of 100 petitions challenging the land acquisition process. Delhi government’s land and building department had taken a large tract of land there for industrial development.

“The key point is whether the petitioners had any right in subject lands? As noted above, in the undertakings given by the petitioners in 2011, while opting for special rehabilitation package and receiving additional payments thereunder, they had clearly divested themselves of all their rights in respect of the subject acquired lands,” the bench observed, paving the way for government to go ahead with its proposed plan for the land.

In their plea, the villagers of Kanjhawala sought a declaration from the court that land acquisition proceedings, in respect of their lands, be deemed to have lapsed in view of provisions of the 2013 Act, which now governs land acquisition and compensation process in the country.

They said that though they have received compensation, they continue to be in actual physical possession of the land despite more than five years having lapsed since the government acquired it on paper.

But the L&B department through advocate Yeeshu Jain informed the court that actual physical possession of the lands in question had been taken by the Land Acquisition Collector and compensation had also been received by the petitioners/landowners. HC found that government had started the process to acquire the lands for development of “New Industrial Area” in 2005 and soon the landowners accepted the special rehabilitation package and received additional payments.

The court, dismissing the petition, said that when the 2013 Act came into effect, the villagers had given up all their right, title and interest in the land and could not claim any benefit.

DISCLAIMER
The news and data posted here is from various sources, published and electronically available. We have taken all possible care to verify and crosscheck the accuracy of the same. However, despite due diligence, sources may contain occasional errors.www.noidapropertydealers.co.in will not be responsible for any errors in such an instance.

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