Property

Wednesday 27 April 2016

BANGALORE –PROPERTY FOR INVESTMENT, A FINE OPINION.

INVESTMENT IN BANGALORE PROPERTY – A FINE OPTION

- Keshav Morab

Property has always been a fine option for investment since long, the next option being only the gold. Both property i.e., lands and buildings and gold prices have appreciated considerably in the past few years. The gold price has since reached almost its peak and perhaps also saturation point. Now, property is the main option or only attraction for investment. Properties in some areas attract more and more investors, particularly the non residents Indians(NRI).The NRIs are showing more and more interest in the immovable properties ie lands and buildings. This has attracted many property developers to the realty market in major cities and metros.

For the past two to three years the property market in Bangalore has shown quite an upward trend. With the entry of property developers from other cities to Bangalore, the demand for land has gone up tremendously. Various new projects are launched and are being launched, almost on regular basis giving a boost to the land prices all around Bangalore. The Demand for residential space has gone up immensely, particularly in the neighborhood,of IT industries in the north and south Bangalore. Consequently the level land prices and apartments have gone up in those areas.

The demand for medium class spaces like for 2 BHK (Bedroom- Hall –Kitchen) flats is said to be quite high. The present pricing however of such flats seems to be very high and the builders are indifferent towards the buyers of such medium class spaces. The abnormal prices of developed flats is keeping the people away who look for such accommodation. The developers have been taking up more and more high end projects eyeing mostly NRIs. The cost of flats in such projects starts from a crore and goes beyond 5.6 Crores.

Number of property developers are now coming up with projects for development of plots for independent bungalows and villas on the outskirts of Bangalore all along the outer ring road. The plots and villas developers are said to be with all possible luxuries and costing crores of rupees . It seems there is no limit for luxuries and the price. With all such new projects coming up all over, the skyline of Bangalore is changing totally. The greenery that was seen once is now almost lost and it is replaced with the multi story building and bunglows. The city has grown beyond imagination of planners, unfortunately the infrastructure that is necessary has not been developed simultaneously and the basic needs like proper roads, water supply, street lighting and public transport etc are denied to the areas where huge Layouts, Shopping complexes, commercial and residential spaces are coming up.

With the rapid growth in population of the city due to large scale migration and lack of proper and adequate connectivity people are living in far off places and have to depend on their own vehicles for commuting resulting in increase of vehicles population, now stated to be around Five millon. If no action is taken to develop the infrastructure projects, proper connectivity and required public transport, the situation will further worsen in the next few years beyond one’s imagination.

So far as the real estate market of Bangalore is concerued, there is a great demand for commercial and residential spaces, particularly the middle class people are interested in buying spaces for residential purposes. The property developers may have to consider coming up with more projects, with one and two BHK flats or row houses to meet the demand, which is ever increasing for residential accommodation in particular.

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Tuesday 26 April 2016

Urbanisation

URBANISATION

United Nations is keen to bring awareness in governments and the agencies to plan our urban future to solve urban problems including the effects of climate change and enable improvement of living conditions.

Situation in India:

India has 2.3% of the World’s area, but has 17.5% of the World’s population. The population of India was 1.22 billion in the year 2011.It is expected that by the year 2021, India will be the most populous country in the World with 1.6 billion population.

India’s population is next only to China with 1.22 billion in the year 2011. Urban population in India is 377 million i.e. 31.42% of the total population and rural population is 68.52%.The urban population in Germany is 74% of the total population, 80% in United Kingdom, and 82% in U.S.A. Population increase in India is about 15 million per year, which is equal to the total population of Australia. Addition of 15 million population every year will increase the problems faced if Governments do not match economic activities, infrastructure, and facilities required to cater to the additional population in such large numbers.

India has the second largest urban system in the World. The urban population by the year 2021 will be about 503 million. The addition of about 126 million urban population by 2021 ie. in another nine years requires provision of employment in non–agricultural activities, affordable housing, water supply, power, and other infrastructural facilities as otherwise the urban problems will increase like; slums, inadequate water, power cuts, traffic congestion, etc. It is expected that the urban: rural ratio will be about 40: 60 by the year 2021..

It is observed that growth of mega cities is rapid in view of employment facilities , better connectivity to other cities in the state and the country as well as foreign countries ,higher educational opportunities, super-specialty health facilities, recreational facilities, etc. in spite of serious urban problems. Small and medium cities are not growing for want of those facilities. According to 2011 Census , Mumbai was India’s most populous city with 18.4 million persons followed by Delhi with 16.3 million persons, Kolkatta 14.1 million , Chennai 8.91 million, Bangalore 8.72 million, Hyderabad 7.74 million, Ahamedabad 6.35 million, Pune 5.04 million, Surat 4.5 million, and Jaipur with 3.07 million persons. The land and rental values are prohibitive in large cities. Even middle income families are not able to afford independent houses. One land in Mumbai was sold at Rs. 107 crore /acre during 2011. In Bangalore , rates are quoted in Cantonment area up to Rs.25,000/sft.

The effects of unplanned urbanization is bad. About 23.5% of the population are below the poverty line. Only 67% of the household in India have electrical connection. Regarding the urban services, only about 50% of the households have taps in their houses, and 60% of the households have no sanitation facilities. Why in India such a situation exists sixty seven years after Independence in spite of large budget provisions in five year plans of governments and yearly budget provisions of state governments and statutory agencies, is to be answered by the leaders who rule the Country

The total geographical area of India is 328.726 hectares, out of which agricultural area is 169.659 hectares. In future, only urbanization will take place. Area under agriculture is limited. There is no way to increase

agricultural land. Gradually area under agriculture will reduce due to urbanization. Whereas increase in urban space is possible by increasing number of floors in buildings in urban areas. If urban sprawl continues utilizing agricultural lands, food production to meet the requirements of future population will be affected and food grains will have to be imported. It is therefore necessary to conserve the limited agricultural lands by resorting to high density development in urban areas on wider roads. Higher density should depend on the size of the urban area.

Situation in Karnataka:

Karnataka had a population of 61.13 million in 2011. It is about 70.2 million in 2012. Bangalore is the only large city in Karnataka unlike Tamilnadu and Maharashtra where there are several large cities. Bangalore is the fifth largest city in India with 8.72 million population in the year 2011, and about 10 million at present. 23% of the urban population of Karnataka are living in Bangalore City. During 1951, it was only 17%. The primacy of Bangalore is increasing due to the urban infrastructure available in Bangalore including connectivity to other cities in India and foreign countries. Investors prefer Bangalore due to this reason. Other cities in the state without the above advantages are not developing and efforts are not being made by Government to upgrade the infrastructure in those cities and attract economic activities.

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Thursday 21 April 2016

COURT NEWS

1. On 20th January, 2009, a two Judges Bench in Jai Singh and Ors. v. Gurmej Singh

[Civil Appeal No. 321 of 2009] summarized principles relating to inter-se rights and

liabilities of co-sharers as follows:- (1) A co-owner has an interest in the whole property

and also in every parcel of it; (2) Possession of joint property by one co-owner is in

the eye of law, possession of all even if all but one are actually out of possession; (3)

A mere occupation of a larger portion or even of an entire joint property does not

necessarily amount to ouster as the possession of one is deemed to be on behalf of

all; (4) The above rule admits of an exception when there is ouster of a co-owner by

another. But in order to negative the presumption of joint possession on behalf of all,

on the ground of ouster, the possession of a co-owner must not only be exclusive but

also hostile to the knowledge of the other as, when a co-owner openly asserts his

own title and denies, that of the other; (5) Passage of time does not extinguish the

right of the co-owner who has been out of possession of the joint property except in

the event of ouster or abandonment; (6) Every co-owner has a right to use the joint

property in a husband like manner not inconsistent with similar rights of other coowners

and (7) Where a co-owner is in possession of separate parcels under an

arrangement consented by the other co-owners, it is not open to anybody to disturb

the arrangement without the consent of others except by filing a suit for partition.

The Bench held that “when a co-sharer is in exclusive possession of some portion of

the joint holding he is in possession thereof as a co-sharer and is entitled to continue

in its possession if it is not more than his share till the joint holding is partitioned.

Vendor cannot sell any property with better rights than himself. As a necessary corollary

when a co-sharer sells his share in the joint holding or any portion thereof and puts

the vendee into possession of the land in his possession what he transfers is his right

as a co-sharer in the said land and the right to remain in its exclusive possession till

the joint holding is partitioned amongst all co-sharers.”

2. On 21st January, 2009, a two Judges Bench in Ranveer Singh v. State of M.P. [Criminal

Appeal No.115 of 2009] observed that “the right of private defence is essentially a

defensive right circumscribed by the governing statute i.e. the IPC, available only

when the circumstances clearly justify it. It should not be allowed to be pleaded or

availed as a pretext for a vindictive, aggressive or retributive purpose of offence. It is

a right of defence, not of retribution, expected to repel unlawful aggression and not as

COURT NEWS, JANUARY - MARCH 2009 11

retaliatory measure. While providing for exercise of the right, care has been taken in

IPC not to provide a mechanism whereby an attack may be a pretence for killing.”

“A right to defend does not include a right to launch an offensive, particularly when

the need to defend no longer survived”, the Bench said.

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Wednesday 20 April 2016

Public Notice before purchase of property

PUBLIC NOTICE BEFORE PURCHASE OF PROPERTY

-S. Selvakumar, Advocate

It is not uncommon that we do come across publication of notices in newspapers concerning the property transactions. The reason for such publication is to make known to all the concerned people that a particular property is under process of purchase by the Advertiser and to give an opportunity to the affected party to raise objections, if any, against such purchase.

For peaceful possession and enjoyment of the property the Purchaser has to exercise proper care and diligence to ensure that property purchased by him is free from encumbrances, charge and litigation. Any laxity on the part of Purchaser to conclusively find out as to whether the Vendor has good and marketable title and the property is free from encumbrance would land the Purchaser not only in uncalled for litigations but also to financial strain.

Public Notice:

At the outset, it may stated that issuance of Public Notice in respect of purchase of an immovable property is not a statutory requirement. There is no hard and fast rule as to the procedure an intending Purchaser has to adopt to find out whether the Vendor has a valid and marketable title and the property is free from encumbrance. The charge or encumbrance created under an unregistered document on the property cannot be discovered from the documents obtainable from the Registering or Municipal Authorities. Charge created by deposit of Title Deeds, Pending Court Cases or Transfer of Property under a will would fall into this category. To protect the interests of the Purchaser upon purchase of the property and to avoid litigations, normally Public Notices are taken out in leading and widely circulated newspapers notifying the intention of the Purchaser to purchase the property in question so that the persons, who have an vested interest in the property could put forth their objections for such sale supported by documentary proof. Such notices are generally published immediately after entering into a Sale Agreement with the Vendor in two dailies one in English language daily and other in vernacular language daily, which have wide circulation in the area where the property is situated. The notice acts as an intimation or information or a caution to all the concerned to facilitate them to take such steps as are necessary to protect their interest.

A notice shall contain the intention of the Purchaser, description of the property with boundaries and the fact of execution of the Sale Agreement, if any. The notice invites the public having interest in the property to file objections along with documentary proof within a stipulated time. The notice shall also indicate that in case no objections are received within the stipulated time, the sale process will be preceded with treating the property as unencumbered with a clear rider clause that objections received after the stipulated time will not be acted upon. The notice must spell out in clear terms the intention of the party with no ambiguity whatsoever.

It is to be noted that the issuance of Public Notice can at best be termed as a precautionary step since, it has no binding force on any one having interest in the property to act in a particular manner. The interested party may not act swiftly in terms of the notice and enforce his right over the property at an opportune time. Further, there is very likelihood that the Public Notice may go unnoticed by the affected party. However, the Public Notice would serve as intimation to the Public that the Purchaser has a bonafide interest in the property and the interested parties can file objections, if any, for the said sale transaction. The Purchaser in his own interest has to get the objections scrutinised by an experienced Advocate having knowledge in property matters so that he can avoid the likely litigations and embarrassment at a later date after the purchase.

Section 55(1) of the Transfer of Property Act,1882 makes it mandatory that the Seller is bound to disclose to the Buyer any material defect in the property or in the Seller’s title thereto, which the Seller is and the purchase in not aware and the Buyer could not with ordinary care discover such defect. But, the Seller for obvious reasons may not truly disclose all the defects in the property or in his title. Therefore, it is advisable that the Purchaser of the property should verify and make search of all the relevant documents and exhaust all the avenues available to him to find out that the property under consideration is free from encumbrance and the Vendor has a good and marketable title.

Deemed Notice:

The Transfer of Property Act, 1882 puts some onus on the Purchaser and in certain cases the Purchaser is deemed to have notice of encumbrances. Section 3 of Transfer of Property Act defines “Notice”. A person is said to have notice of a fact, when he actually knows the fact, or when, but for willful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it. According to Explanation I to sec.3, where any transaction relating to immovable property is required by Law to be registered and accordingly registered, any person acquiring such property or any part of or share or interest in the property shall be deemed to have notice of such instrument from the date of registration. The Explanation II to sec.3 stated that any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof. Further, Explanation III to sec.3 states that a person shall be deemed to have had notice of any fact if his Agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material. Thus, notice could be classified into (1) Actual notice when a person has the knowledge of actual fact, (2) Constructive notice, where the information is available on proper enquiry and search, and (3) Notice to the Agent of the Purchaser, where the information is given to or received by the Agent in the course of his ordinary duties, whether he communicates it to his principal or not. Notice to the active partner of a firm has the effect of notice of the firm.

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Friday 1 April 2016

NEED FOR KHATHA TRANSEFR OF PROPERTY

Legal

S. Selvakumar, Advocate

Immovable property can be transferred by way of Sale, Will, Gift, Release, Settlement, Partition Deed, and Exchange or otherwise. After such a transfer, it is necessary to make entries in the revenue records on production of the relevant documents to the concerned Revenue Authority.

Immediately upon registration of the conveyance document with the concerned Sub-Registrar, you will not get absolute ownership details in their records in respect of the property. Upon verification of the documents made available to them for transfer of Khatha in your name along with the prescribed fees, the concerned Revenue Authorities will make necessary entries in their records indicating the ownership of the properties in your name. Copies of these documents are supplied to you upon payments of prescribed charges. You will also have to pay property tax to the concerned Authority regularly.

Types of Khatha

These documents are called in different names at different places such as; Khatha Certificate, Khatha Extract, Khatha Endorsement, Phani, Chitti or Adangal. It may be noted that the Title Deed is the document through which a person derives a title or ownership of the property and Khatha Certificate and Khatha Extract only authenticate such ownership. They are supporting documents to the Title deed.

The records maintained by the Revenue Authority shall contain details of property such as size of the plot, location, built up area and so on with a view to arrive at the exact quantum of property tax payable by you as per norms prescribed. These documents are also used for identification of the person, who is primarily liable for payment of property tax. Property tax is a charge arrived at upon consideration of the size and usage of the property and all the property Owners are duty bound to pay Property Tax regularly.

The Khatha Certificate is one of the essential documents required to be produced for obtaining building license, trade license or for obtaining loans from Banks and other Financial Institutions. Even if you want to sell your property, you will have to produce compulsorily copies of the revenue records viz., Khatha Certificate, Khatha Extract and the latest tax paid receipt at the time of Registration of Sale Deed in the Jurisdictional Sub-Registrar’s Office, Khatha Extract would give an account of assessment of a property for payment of property tax.

Applying for Khatha

Only property Owners can apply for Khatha Certificate upon payment of up-to-date property tax and the prescribed fee. However, the Khatha Extract can be applied by anybody, upon payment of requisite fees per property for one extract. The Khatha Certificate and extract can be applied at the Office of the Jurisdictional Asst. Revenue Offices or at any computerised counter established by the Bangalore Mahanagara Palike.

Holder Khatha

Whenever, the title documents are not furnished to the concerned Revenue Authority and the property with super structure is in possession of an Occupant, the property will be assessed to property tax registering khatedhar as ‘Holder’ to protect the interests of the Corporation Revenue. This Holder Khatha will be regularised on the production of Title Deeds and on payment of improvement charges. General Power of Attorney (GPA) Holders of a property with super structure thereon can also apply for Khatha in their name, where the Khatha will be registered as ‘Holder’ and taxes will be collected from such GPA Holders.

New Khatha Registration

Applications for Khatha Registration may be filed in Asst. Revenue Office along with documents mentioned in the Sarala Khatha Scheme Book. Documents inter alia include Sale Deed, Mother Deed, Encumbrance Certificate, National Savings Certificate and sketch showing the site details, along with the mandatory fees of two percent of Stamp Duty paid on the Conveyance Deed and betterment charges, wherever applicable.

Bifurcation and Clubbing of Khatha

When a property is divided into two or more parts, there is bifurcation and when there is merger of one or more properties together there is clubbing. A modified Khatha has to be obtained in both the cases.

Transfer of Khatha

Khatha can be got transferred from the Vendor’s name to the Purchaser’s name upon the Registration of Conveyance Deed by following the prescribed procedure. Applications for Khatha Transfer may be filed in Asst. Revenue Officer’s Office along with the documents mentioned in the Sarala Khatha Scheme Book. The Sarala Khatha Scheme Book gives all the details about the services of the Revenue Department, documents to be filed, fees to be paid, schedule of time for the services and also the rates for assessment of property tax under the self-assessment scheme. Documents to be enclosed to the application are the same as for new Khatha Registration along with up-to-date tax paid receipts. Purchaser of such property is liable to pay 2 percent of Stamp Duty as Khatha Transfer Fees.

Payment of Property Tax

Property tax can be paid in two annual installments. The property for the first half year will have to be paid within 60 days from the date of commencement of the assessment year. The second installment has to be paid within 60 days from the date of commencement of the second half of the assessment year. Payment of property tax beyond 60 days as mentioned above will attract penal interest.

R.T.C.

RTC means “Records of Right, Tenancy & Crops for inspection”. RTC relates to Khatha of agricultural properties and it is otherwise called as “Pahani”. It is a very important document for agricultural land. RTC is issued by the Village Accountant under Rules 40, 42, 58 & 70 of Karnataka Land Revenue Rules, 1966. RTC is a very important document to trace title of agricultural property. It contains the following details:

1. Survey Number,

2. Hissa Number/Sub Number,

3. Total extent of Land & Kharab Land,

4. Revenue Details,

5. Kind of Soil,

6. Patta,

7. No: of Trees,

8. Total extension cultivated through irrigation,

9. Owner of possession in the land (column),

10. Kind of possession,

11. Other Rights & Miscellaneous,

12. Cultivation & tenancy details &

13. Use of land & kinds of crops.

RTC column serial Nos. 12 & 13 contain total 16 sub columns. It shows cultivator of the land, year and tenancy details, kind of crops, details of water of growth of crops, details of water resources, average production of crops/acre and other details.

Mutation Extract

Mutation is understood in the Revenue Department as a Transfer of Right. Mutation is made by the Village Accountant in the Register of Mutation. Mutation is issued in Form No: 11 under Rule 46 of Karnataka Land Revenue Rules, 1966. It contains 7 columns as detailed below:

i. Sl. No. shows mutation no: and year,

ii. No: of reference to preliminary record or Taluk Office or Sub-Registrar or other Office,

iii. Nature of Rights,

iv. Survey no: and sub-division of details,

v. Order details to the enquiry Officers,

vi. Date of entry in the Preliminary Record or Record of Right &

vii. Date of issue of notice to the concerned parties.

Village Panchayath Khatha Form No: 9

The Gram Panchayath will issue Khatha in Form No: 9 under Rule 35 of Karnataka Panchayath Raj Rule, 1995. It contains the following details:

a. Property no: and details,

b. Owner of the land and

c. Total extent of the property with boundaries and annual tax.

Form No: 10

It is a demand register of assessment of the annual year. The Gram Panchayath will issue Form No. 10 under Rule 35 of Karnataka Panchayath Raj Rule, 1995. It contains the following details:

• Property no:

• Owner’s name and tax fixation for the assessment year &

• The details of the tax (i.e., sanitary, education, health, library, property tax, electricity tax and water tax).

• Instead of Form 9 & Form 10, Form 1 & Form No: 12 are now issued which contain similar details in respect of properties situated in the Village Panchayath area.

• It is advisable that for peaceful possession and enjoyment of your property with an absolute, clear and marketable title, you have to get the Khatha transferred in your name immediately upon purchase.

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conveyancing

AFFORDABLE HOUSES-NEED OF THE DAY

At each conference, each seminar, each meeting, eminent speakers from the important Estate trade and Housing Finance trade are speaking concerning the cheap housing. It’s a well-known proven fact that the demand for residential housing is ever increasing, significantly within the higher and lowers financial gain teams. Housing for the poor categories is usually a difficulty that remains unresolved, since nobody is fascinated by absorbing the housing comes for these individuals. With the exception of the affluent category, higher still as lower) and poor class, there's one category that's individuals below poverty line (BPL) that, it seems, has never been addressed. The demand for homes for middle and poor category is claimed to be quite high, however the property developers appear to be not a great deal fascinated by absorbing any comes because the ratio are going to be relatively low.

Affordability could be a relative term. It varies from individuals to individuals, even person to person. There area unit those that will afford to possess house/flat cost accounting Rs.75crore and there area unit those that cannot purchase a house/flat even cost accounting Rs.5lakh while not raising a loan. They cannot pay even the interest on such loans. Now-a-days the loan facilities area unit on the market simply and folks do attempt to have their own homes flats by raising loans. Of course, individuals within the urban areas, significantly in major cities and Metros, place themselves in 'search' mode and take a look at to buy a lodging accommodation cheap for them.

The property developers organize, through their associations, sporadically exhibitions, property Melas etc. within the major cities for promoting their properties. to draw in the NRIs, exhibitions and melas area unit organized by the property developers in different countries, particularly within the geographic region.

As we have a tendency to area unit talking concerning affordability, UN agency will afford could be a matter that's maybe set by the monetary establishments UN agency move to supply loans. The affordability is decided on the idea of monthly financial gain of the person, the task security of the person, collateral securities on the market, range of years the person are going to be in commission before retirement, etc. consequently, the monetary establishments compute the number that the person will afford to pay monthly and therefore the amount for compensation of loan and interest here on.

The developers take up the housing comes in numerous components of town. The comes area unit usually designed to suit numerous categories of individuals. The upper category individuals haven't any downside of affordability. Range of developed flats/houses/sites is going to be on the market within the property market at the costs which can suit them. In most of the cases of this class, the affordability isn't the least bit as they will get the property outright or through the monetary establishments as they will raise loans with none problem. They get the property that they will afford simply with none fuss concerning the EMIs.

Property developers additional fascinated by this category of consumers because the deals are finalized quickly. The cheap housing, concerning that we have a tendency to area unit talking, is applicable to the lower social class and poor individuals as they're the most consumers. These individuals are going to be about to purchase homes, flats with help of economic assistance from the banks and different financial establishments. Seeable of the high value of construction, the minimum value of flats, as we have a tendency to see from the offers created by the developers through the media, is higher than 15- 20lakhs.This minimum value is cheap solely by the center category individuals.

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