January 11, 2021

CREDAI Bengal Daily News Update | 11.01.21

WEST BENGAL NEWS

Housing ministry supports homebuyers' stand to repeal West

Bengal HIRA

The state’s separate housing legislation received the governor’s assent in October 2017, but

the central government’s RERA regulation had received the President’s consent before

that, in March 2016.

The Ministry of Housing and Urban Affairs has supported the petition of a pan-India homebuyers’

body to repeal the West Bengal Housing Regulation Act, 2017 (HIRA). The housing ministry’s

affidavit came after the Supreme Court issued a notice to the West Bengal government and the

Centre while admitting the plea by Forum for People’s Collective Efforts (FPCE) against the state

government.

PFCE had earlier approached the West Bengal governor, the state chief minister, the prime

minister, and the President seeking repeal of HIRA and implementation of the Real Estate

(Regulation & Development) Act, 2016, enacted by the central government. The state’s separate

housing legislation received the governor’s assent in October 2017, but the central

government’s RERA regulation had received the President’s consent before that, in March 2016.

“The reply of Union of India vindicates our stand and firm belief that the West Bengal Act is

unconstitutional,” Devashish Bharuka, Advocate-on-Record in the Supreme Court who is

representing FPCE, told ET. “In fact, once Parliament has made a law for the entire country and

that too on an important issue of uniform protection of homebuyers, it would be highly

incongruous that one state is permitted to make its own separate law and without the consent of

the President as required under the constitution,” Bharuka pointed out.

Such a stand will render ineffective any Parliamentary law and also defeat the federal structure

and delicate legislative Centre-State balance laid down under the Constitution, he added. The

state-specific Act has not received the President’s assent yet, according to the housing ministry’s

affidavit, which pointed out several differences between both legislations. The ministry also

highlighted two state-specific legislations - Maharashtra and Kerala - have been repealed for not

being in line with RERA.

Last week, Union housing minister Hardeep Singh Puri said that the government had filed its

response in this matter. “We are very confident and I can say this on record that that state

government’s legislation will be rendered unconstitutional by the honourable Supreme Court,”

Puri said. RERA was fully notified and implemented across the country - except in Jammu &

Kashmir - on May 1, 2017. FPCE had earlier raised concerns that allowing state-level legislations

would lead to RERA becoming redundant. RERA and West Bengal’s HIRA differ on the

Newspaper/Online ET Realty ( online )

Date January 11, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/housing-ministry-supports-homebuyers-stand-to-repeal-west-bengal-hira/80207683

definition of force majeure clause and garage.

Under RERA, the force majeure clause can be invoked only in case of war, drought, floods,

earthquake, fire or any other natural calamity affecting regular development of real estate

projects. However, according to HIRA, over and above the conditions listed under RERA, force

majeure clause can be declared for any other circumstance prescribed. Additionally, RERA has

defined a garage as a place within a project that has a roof and walls on three sides for parking a

vehicle, but it does not include unenclosed or uncovered parking areas. HIRA, on the other hand,

says a parking slot means such an area as may be prescribed, and a garage as sanctioned by the

competent authority.

According to the public interest litigation filed by FPCE, the homebuyers’ body has received

information under the Right to Information Act that the West Bengal governor had not been

properly informed, or advised, in the matter by the West Bengal government, as there was already

a Central law -- RERA regulating the sector.

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OTHER NEWS

CREDAI seeks tax sops in upcoming Budget to boost housing

demand

"Real estate sector has been under stress for more than 2 years. Economic uncertainty

enforced by COVID-19 pandemic has only made it worse for the sector. After battling for

survival, the sector is slowly moving towards revival," the Confederation of Real Estate

Developers' Associations of India said.

Realtors' apex body CREDAI has suggested the government to increase tax exemptions in the

upcoming Budget to boost housing demand and enhance limit of deduction under section 80C of

income tax for principal repayment on home loans.

It also said that there should be a separate exemption for principal repayment on home loans.

The Budget for financial year 2021-22 will be presented on February 1.

The Confederation of Real Estate Developers' Associations of India (CREDAI), which has around

20,000 members from across the country, also recommended tax incentives to boost investment

in Real Estate Investment Trusts (REITs).

"Real estate sector has been under stress for more than 2 years. Economic uncertainty enforced

by COVID-19 pandemic has only made it worse for the sector. After battling for survival, the

sector is slowly moving towards revival," CREDAI said.

The association said that ensuring liquidity, access to funds and longer repayment cycles will help

developers. It sought cheaper home loans and tax benefits on investments in housing to boost

demand

"Reforms in taxation related to affordable housing, joint development and steps to promote

foreign investment are the need of the hour," CREDAI said.

As per the present provision, the ceiling of deduction for principal repayment of housing loan is

Rs 1,50,000 and the deduction is clubbed with other tax saving instruments.

"We suggest that the deduction under section 80C for principal repayment of housing loan should

be increased from existing limit of Rs 1,50,000. The deduction for principal repayment of housing

loan can be considered for a separate or standalone exemption," CREDAI said.

Newspaper/Online The Economic Times ( online )

Date January 10, 2020

Link https://economictimes.indiatimes.com/industry/services/property-/-cstruction/credai-seeks-tax-sops-in-budget-to-boost-housing-demand/articleshow/80198127.cms

An increase in deduction for principal repayment of housing loan will encourage the home buyers

to invest in homes, it said.

CREDAI suggested that investment of up to Rs 50,000 in REITs should be allowed as deduction

under Section 80C.

"REITs are one way of solving the liquidity problem in real estate. At the same time, it offers the

investors a choice to diversify their portfolio. At present, there is no provision. We suggest an

extension of exemption under section 80C to investments in REITs starting with Rs 50,000," it

said.

Currently, units of REITs need to be held for 36 months to make them a long-term capital asset

eligible for lower tax rate.

"We suggest the period of holding for units of REITs to qualify as long-term capital asset should

be reduced to 12 months (as applicable for listed shares)...in place of 3 years. This will lead to

faster adoption of REITs and bring the units held in REITs at par," CREDAI said.

REIT is a tax-efficient vehicle that enables owners of real estate to pool income-generating assets

together in a portfolio and allows investors to buy ownership in real estate assets in the form of

equity.

In India, two REITs have been listed so far. ____________________________________________________________________________________________

Puzzle parking part of common areas in housing project:

MahaRERA

The order was passed on a complaint by Devarajan Swaminathan, a resident of Lodha Casa

Royale at Balkum, Thane (West). The project comprises three towers of 432 flats with

basement, stilt, open and puzzle parking.

In a relief for flat buyers, Maharashtra Real Estate Regulatory Authority (MahaRera) has declared

that puzzle parking is part of the common areas in a housing project.

The order was passed on a complaint by Devarajan Swaminathan, a resident of Lodha Casa

Royale at Balkum, Thane (West). The project comprises three towers of 432 flats with basement,

stilt, open and puzzle parking.

Puzzle parking is an automated system featuring combination pallets that enable horizontal and

vertical movement of parking spots, just like a puzzle, to park and retrieve vehicles.

In the last tower of 122 flats, 24 flat owners, including Swaminathan, were allotted puzzle parking

by the developer. The society asked them to bear the expenses of its maintenance although they

paid proportionate contribution towards other amenities like other members.

Swaminathan sought a clarification whether a puzzle car park is included in the common areas of

the project.

He argued if there is a structural damage to a pallet, why should any one or few have to bear the

expenses. He produced a document which shows the developer has admitted that car parking in

the basement, stilt, open area or puzzle is included in the common area amenities of the project.

Advocate Amrut Joshi for Lodha said puzzle car parking falls within the definition of “parking

spaces” as defined in the agreement for sale. Also, since puzzle parking is part of the common

amenities, the flat purchaser’s grievance that he along with 23 others are being made to bear its

maintenance alone would be a dispute purely between them and the society.

In his December 11 order, MahaRera member B D Kapadnis observed that the puzzle car parking

system features combination pallets carrying cars. “Individually, the load and unload of the cars

is possible. Thus, it is an independent system which is electromechanically operated. Fast in and

out of the cars is possible. Combination of multiple levels vertically and horizontally is possible.

It is mostly preferred in residential complexes,” he added.

Kapadnis noted that under Rera, the definition of common areas means “the common basement,

terrace, parks, play areas, open parking areas and common storage spaces”.

“A specific car parking (in a puzzle park setup) to the exclusion of others cannot be allotted to

Newspaper/Online ET Realty ( online )

Date January 10, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/puzzle-parking-part-of-common-areas-in-housing-project-maharera/80196790

any one allottee and is not possible also. A car can be parked at any level and at any available

space. After considering the concept of puzzled parking as explained above, I find that it is a

common area and I declare it to be so,” said Kapadnis, disposing of the complaint.

________________________________________________________________

Government won't allow unauthorized construction: Maharashtra

urban minister

Addressing a review meeting in Sangli Miraj Kupwad municipal corporation on Saturday,

Shinde said that government has taken a major decision on regularizing constructions on

Gunthewari system.

Urban development minister Eknath Shinde has warned that the state government will not

entertain unauthorized constructions in the future.

Addressing a review meeting in Sangli Miraj Kupwad municipal corporation on Saturday, Shinde

said that government has taken a major decision on regularizing constructions on Gunthewari

system. “It is the responsibility of the local governing body to ensure that such unauthorized

constructions do not crop up in the city in future”.

Shinde promised that the state government would effectively conduct a follow up about all

pending issues of Sangli Miraj Kupwad municipal corporation.

Shinde said that he would take sincere efforts to complete projects, including widening of Sangi-

Miraj road and turning it into a six-lane one, sewage treatment plant at Sherinala as well as

garbage disposal. Shinde said that government would provide financial assistance for all these

projects.

According to Shinde, the government would soon sanction development plan of Sangli Miraj

Kupwad municipal corporation for planned growth and beautification of the city. He said that the

government would also assist in underground drainage of Kupwad.

________________________________________________________________

Newspaper/Online ET Realty ( online )

Date January 10, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/government-wont-allow-unauthorized-construction-maharashtra-urban-minister/80197198

Karnataka: Registration & construction of houses on revenue sites

barred

The government recently issued a memo to all sub-registrars directing them not to register

plots that have no permission issued by competent authorities, municipal or panchayat as

applicable.

The state government has banned sale and purchase of revenue sites registered outside the

municipal corporation after 2013. Sites developed on agricultural lands without land conversion

won’t be registered by the stamps and registration department.

The government recently issued a memo to all sub-registrars directing them not to register plots

that have no permission issued by competent authorities, municipal or panchayat as applicable.

For instance, if anyone bought a revenue site after 2013 in Rajanakunte or Nelamangala on the

outskirts of Bengaluru, they can neither sell/purchase the site nor build a house.

“Registration of revenue sites in the state was stopped by chief minister BS Yediyurappa on the

advice of a senior BJP MLA from north Bengaluru,’’ officials in the stamps and registration

department said. “This affected our revenue and caused severe problems for middle-class

people,’’ they added.

The move is an offshoot of increasing irregularities involving land sharks, and sub-registrar and

gram panchayat officials.

Deputy chief minister CN Ashwath Narayan said, “While the decision may impact revenue of the

stamps and registration department, which has set a target of Rs 12,655 crore for 2020-21, it is

essential to control malpractices. There are reports about unscrupulous persons selling sites

without land conversion or prior approval.”

He added, “In some instances, people have sold revenue sites to multiple people with the collusion

of sub-registrars and gram panchayat officials. Unless all documents are in place, properties will

not be registered.”

This has alarmed hundreds of urban middle-class people, who invested in cheap revenue sites on

the city’s outskirts. They hope the government will take a definitive step in regularising theses

sites.

“We bought a revenue site in Rajanakunte because we were given a sale deed by the government

(registered at a sub-registrar office) and therefore thought it was genuine. If there were lapses,

why punish the people?’’ asked B Nagendra, a Group D government employee.

Some revenue officials say the move could be a blessing for people who prefer apartments instead

Newspaper/Online ET Realty ( online )

Date January 11, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/karnataka-registration-construction-of-houses-on-revenue-sites-barred/80207511

of sites.

‘Process on in some offices’

Sources said registration continues in some offices on the outskirts despite the government diktat

if one goes through touts. They said at the Chikkajala sub-registrar office, for example,

registration can be done with the help of some middlemen who reportedly possess documents

prior to 2013.

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