Properties, Homes & more

A rental agreement is for short tenancies, usually for 30 days which automatically continues once this period is over, unless the agreement is terminated. In a rental agreement, the landlord can choose to amend the mentioned terms as long as he provides written notice to the tenant. However , the tenant has the right to occupy the property for a specified period at fixed terms, usually 11 months, in case of a written lease. However, unlike a rental agreement, a lease has to be renewed.

Please find below a list of important points that need to be thought upon, before taking a property on rent:

1. A tenant should know the prevailing rental rates in the chosen location and be aware that only an airtight rental agreement that transparently outlines his rights is acceptable. For example, it should be clearly mentioned who will pay the tax after mutual agreement between the landlord and the tenant. Also, a tenant should be aware that the landlord’s permission is required before initiating any major changes to the property.
2. The tenant should be wary of a clause allowing for automatic rent increases, arbitrary amendments to the existing terms of the agreement by the landlord, and any provision that permits the landlord to enter the property at any time.
3. The agreement or lease should be filled out by the tenant, or in the presence of the tenant.
4. There is no stipulation on the amount of security deposit to be paid by the tenant. It’s a commercial term determined between the two parties. Hence, the time to safeguard one’s safety deposit is before moving in.
   • Security deposit should ideally be paid in cheque to ensure that the same is reflected in their bank statements. Also, legal assistance should be sought to ensure that a proper clause stating that the security deposit would be refunded at repossession by the owner. There should also be a clause in the leave and license agreement of interest penalty on the outstanding security deposit amount in case the amount is not refunded. In such cases, the agreement should clearly highlight if the advance would be adjusted with the first or last few months of the lease. In case of security deposit, the amount and terms for its return should be mentioned.
5. The name of the landlord should be clearly mentioned in the property documents. The property papers, which include the occupation certificate and title deeds, should be in order.
6. The tenant can seek a copy of these papers if needed. If the landlord has carried out an illegal extension within the house, a tenant has to take a written record or have the landlord mention the same in the agreement . There is no such norm that the tenant should possess these documents. However, it’s in the best interest of the landlord and the tenant to have everything in written.
7. Similarly, if the property has any lien such as loan, then the lender should be involved in the transaction between the landlord and the tenant for the transaction.

Continued from Part 1…

There are many important points to be looked into before signing on the dotted line… In this 2-part series, I will cover 9 important points that must be carefully considered.

1. Look deep in your wallet before deciding the property
2. Look closely at your lifestyle and financial capabilities
3. Evaluate market conditions
4. Higher loan amount increase burden of debts

(Please refer Part 1 for discussion on these 4 points)

5. Increase the down payment When you go for home loan, you have to pay around 10% to 15% of the project cost and around 85% to 90% is funded by the bank or financial institution. If you have more than the required amount for ‘down payment’ then pay more, so that your required debt is reduced significantly.
6. Prepayment is the best way to save on interest Always make an effort not to extend a loan beyond its tenure. As and when you have excess cash, try to prepay (huge loan first). For example, you could prepay from your yearly bonuses or salary hikes. Prepaying can lower the tenure and help you save on interest. However, check with your bank from when you can start prepaying, as banks usually do not allow prepayment during the first year of the loan period. Also check if there is a prepayment penalty. The idea is to make sure that the interest saved does not exceed the prepayment fees.
7. It is not a family bank, unlike family doctor It is not essential to opt for the same bank that your brother took his home loan from. It is advised that you should do your own searching in terms of the deals offered by different banks. Moreover, your brother’s offer for the same loan amount and tenure could be (and mostly, would be) different from what is offered to you, as it varies according to the credit profile of the borrower.
8. Processing fee If you have nothing in writing from the bank, it is possible that you might lose the processing fee that you pay to bank in case the loan does not get approved. So, either you get something in writing from the bank or factor in all this money for these kinds of losses.
9. Read the home loan agreement (fine print) carefully Most of us just close our eyes and sign on the dotted line. What we forget to read are the clauses that are in fine print in the loan agreement. You need to understand the significance and impact of these various clauses before you sign the agreement. Important clauses to watch out for are: the Force Majeure clause and Reset Clause on Fixed Rates.

So you have finally decided to buy your own house… With this single decision follows a chain of other decisions, ranging from choosing the property, choosing a home loan offer to deciding the furniture for the new house. However, believe me this is not as simple as it sounds… There are many important points to be looked into before signing on the dotted line… In this 2-part series, I will cover 9 important points that must be carefully considered.

1. Look deep in your wallet before deciding the property Now that you have set your heart on a house that is perfect for you, have you carefully thought of whether your wallet will be able to handle the cost of your dream home? Going for a house that you can’t afford to pay for is like eating more food than you can digest. You end up with indigestion, and in this case the indigestion may cost you dearly!
2. Look closely at your lifestyle and financial capabilities Plan for an unfortunate eventuality like loss of job or illnesses and ensure that your wallet will be able to take the pinch for a few months at least. Pay attention to your other debt liabilities before going in for the home loan.
3. Evaluate market conditions Understand the real estate market and evaluate if the property prices are stable and not likely to fall further. Do your research on home loan interest rates, see if they are likely to decrease or increase in future depending on the existing market conditions, you may not want to lose out on a good deal because you jumped in too early.
4. Higher loan amount increase burden of debts Having high credit card outstanding and a number of other loans not only brings the eligibility for higher loan amount down, it also increases the burden of paying all of these debts off.

Concluded in Part 2.

In a major jolt to the already depressed real estate market in Jaipur, more than 1,000 investors were allegedly duped of at least Rs. 80 crore by a big-time city realtor, the Narayan Group. Some others were also duped by Subhash Sindhi Co-operative Society and Mahaveer Nagar Co-operative Society.

This shocking fraud came to the light when the Special Operations Group (SOG) recently arrested six persons, including Narayan Group’s owners Gyanchand Agrawal and his partner Sanjay Gupta. The SOG claimed the proprietors of Narayan Group have confessed to duping at least 1,000 investors. However, the number could be higher. According to SOG, the Narayan Group issued lease deeds to more than 2,200 people. After the group made huge profits in a project called Narayan Vihar A, B, C and D blocks in Mansarovar, they announced some more schemes, but in these schemes, they issued fraudulent lease deeds to people without having enough land.

Of the 2,200 people who had invested in the projects, many were given plots elsewhere instead of the places where they had been promised plots, while more than 1,000 people were not given possession at all. Three persons — Gyanchand Agrawal, Sanjay Gupta and one employee, Ravindra Pal Singh — of Narayan Group, were arrested. The SOG has seized documents related to properties and prima facie it seems that the number of those duped could be much higher than 1,000. The maximum number of fraudulent lease deeds were issued between 2004 and 2006.

In yet another fraud, one Jeevraj Singh approached the SOG alleging that proprietor of the Mahaveer Nagar housing co-operative society - Nankishor Mittal - took Rs 7.20 lakh from him for a plot at Shriram Ki Nagala in Sanganer, but did not give him possession. The SOG arrested Nandkishor and two others —Vipin and Shailendra.

--- As reported in the Times of India ---

<< Government came to the rescue of CHS members

In the new amendment in the Maharashtra Cooperative Societies Act Clause, the onus of the co-operative housing society (CHS) lies on the secretary. Every committee member is required to execute an indemnity bond within 15 days of taking charge of the office. The committee members are also accountable to the residents and it’s time they pulled up their socks…

Although the judgement gives a strong message to office-bearers of housing societies, many believe it is sketchy. How many times will you keep filing a case for minor issues? In the earlier case, the problem of the lady was that she got no response to her letter from the secretary. Slapping a fine of Rs. 7,000 does not solve the problem. Instead of approaching the court, one should first treat the problem within the byelaws or go to the registrar, try other alternatives, not to forget the RTI act and also give the committee members’ equal chance to justify themselves.

One has to understand that the very concept of a co-operative society is to come together and work for the betterment of the society, says consumer advocate Anand Patwardhan. “If the secretary has not replied, the message is clear and there are thousands of letters that keep coming. By writing a letter one does not become a consumer, so where is the question of deficiency of service? This is hampering individual liberty. And considering the fact that the secretary is not even paid for the work he does, slapping him with a fine is not justified.”

The housing society committee members work on an honorary basis. If you are not comfortable with the work of any committee member, you have the option of passing a vote of ‘no confidence’ against them. The society is like a family where people stay together. There are various ways to put a check on the actions of the committee members but it is definitely not a commercial venture to ask damages. It is important to see things with a wider perspective.

The order may have got a mixed response but it has managed to ruffle some feathers, bringing respite for residents of co-operative societies and also striking a warning bell for the committee members with regards to their duties and responsibilities.