Properties, Homes & more

In a shocking revelation to Times of India, Brihanmumbai Municipal Corporation (BMC) civic chief Swadhin Kshatriya told that not a single building with car decks on each floor has so far received the mandatory occupation certificate (OC) from the corporation. According to the records with BMC, most of “such” residential buildings were still in the construction stage! And as a matter of fact, most of these building are in prime locations across the metropolis.

In fact, BMC has already stopped sanctioning buildings with car decks, in order to prevent any possible misuse. The chief cracked the whip after a TOI expose on how builders who had got permissions to construct car parking decks on each floor were misusing the space by selling it as part of your apartment. That means, builders claim that they are providing private car decks and in the process grab additional FSI. For example, one of the prominent developer in the metropolis show to prospective buyers the living room in the area earmarked for the car park! This is clearly illegal and is a criminal act of deceiving innocent buyers…

The most blatant case is that of a new residential building in JVPD (one of the most prime areas of Mumbai) where the BMC’s building proposal department sanctioned 386 car slots for just 33 apartments. You can read more details about the story here.

In a bonanza for residents of a Khar housing society in Mumbai, a builder has been buying off their mid-sized flats, paying each family between Rs 4 crore and Rs 5.5 crore.

Mumbai-based Parinee Developers claims to have shelled out between Rs 4 crore to Rs 4.5 crore for a one-BHK flat and Rs 5 crore to Rs 5.5 crore for a two-and-a-half-BHK in the three-decade-old Bharatiya Bhavan Cooperative Housing Society, which is located at the corner of 17th Road in Khar (west). Parinee plans to demolish the buildings and set up a high-end residential tower.

However, there is a word of caution from real estate experts. They warn these huge amounts may send wrong signals in the redevelopment market, unnecessarily create hype and raise expectations of other housing societies in the area. However, Parinee said it is paying this astronomical price only because the society has utilised barely 40% of its floor space index (FSI).

The developer has already bought out 20 of the 37 flats in the society and said it is negotiating with the remaining flat owners. “We are finalising the purchase of the remaining 17 flats. Our acquisition cost for all the flats is around Rs 200 crore,’’ said a spokesperson for the developer. The society comprising six buildings, each ground plus two floors, is spread over an area of 5,570 square yards (over an acre) with ample open spaces and car parking. The one-BHKs have a carpet area of between 580 to 625 sq ft while the two BHKs are between 800 to 900 sq ft in size. The society has been on the block for the past four years. In 2007, TOI was the first to report that the society had invited sealed bids from various developers and that a Navi Mumbai-based builder, APA, had offered Rs 180 crore to the society.

A real estate expert has a word of advice for housing society residents, “Dont get greedy. Stick to only prominent developers who have delivered in the past.’’ The expert further said some unknown builders in the past had offered astronomical prices to housing societies, even outbidding the big guns in the industry. These shady builders are just fronts for some politicians who want to roll their black money in real estate. Housing societies should stay miles away from such builders, he warned.

The National Textiles Corporation (NTC), which has reaped a windfall by selling off its properties in Mumbai since 2005, got another Rs 474 crore in its kitty in first week of August after Indiabulls Real Estate bagged the 2.3-acre Poddar mill at Worli Naka. The reserve price was fixed at Rs 250 crore.

For the first time ever, the NTC carried out an e-auction spread over three days. The property facing the Bandra-Worli Sea link was anyways expected to fetch a good price! The offer works out to more than Rs 200 crore per acre or more than Rs 25,000 per sq ft of saleable area. According to Knight Frank (India), the developer will probably set up a residential building and sell at the rate of between Rs 40,000 to Rs 50,000 a sq ft. Real estate continues to be crazy in Mumbai. With this kind of pricing, the flat will not be below Rs 5 crore for a two BHK and Rs 7-8 crore for a three BHK. Clearly, this is outside the affordability of someone who is making Rs one crore per year.

NTC also plans to sell another of its defunct mill, the eight-acre Bharat Textiles Mill, through the e-auction route which will end on August 6. A reserve price of Rs 750 crore has been fixed by the NTC. This mill is expected to fetch double the reserve price.

A small village located on the border of Uttar Pradesh and Haryana (both Indian states) is proof of how important Bollywood is to India’s mindscape. Ever since teaser advertisements of actor-producer Aamir Khan’s latest offering, Peepli Live, started being beamed on TV, land prices in the picturesque stretch of farmland have started going up. The village’s only claim to borrowed fame is that it is also called Peepli.

The Bollywood angle to real estate fortunes is not a new one. Prices of flats and areas tend to shoot up when a Bollywood celebrity stops by. Wai in Maharashtra’s hinterland became fashionable after film-maker Prakash Jha shot one of his rural masterpieces (Mrityudand) there. Similarly, flat prices in La Mer building at upmarket Bandra soared after cricketer Sachin Tendulkar and actor Aishwarya Rai bought flats there.

However, the latest episode of Bollywood magic can be seen in Peepli. In the last one month, inquiries for the purchase of farmlands have gone up. Ditto with marriage proposals for bachelors. The demand for land in Peepli is good, fetching higher prices than other neighbouring areas. There is a 33% jump, from Rs 20 lakh per acre to Rs 30 lakh.

Bhopal has also been affected by Bollywood, post-Raajneeti. In Mumbai, according to real estate agents, the buying rate of a “celebrity building” is often hiked even if it is artificially inflated in some cases. After Kangana Ranaut bought a penthouse in Bandra, the rate of the building shot up by 15%. Ad film-maker Prahlad Kakkar recalls how the rates of La Mer, where he stays, increased after Tendulkar and Rai moved in. He said, “Overnight, the rates shot up by 25%. I feel the reason was more to do with the free security that the building got. Sachin has a Z-security cover.”

But the Bollywood lift to the real estate market has its downside too. For instance, the death of a celebrity severely affects the rates of the house. After actor Priya Rajvansh died, it was difficult for her brother to sell the house; and the flat in which producer Neeraj Grover was murdered allegedly by navy man Emile Jerome and aspiring actor Maria Susairaj finally had a distress sale. It is also alleged that no one wanted to buy the flat in which Ramgopal Varma shot his horror film Bhoot. Most of these flats have to be sold at distress prices and often, they are only bought by those who are interested in them as an investment and don’t plan on staying there. Families will never buy such homes because they feel they are jinxed.

A real-life version of “Khosla Ka Ghosla” is being played out with an increasing number of non-resident Indians (NRIs). The Ministry of Overseas Indian Affairs (MOIA) is being flooded with increasing complaints of illegal / fraudulent real estate deals and encroachments. In fact, with the recent Satyam scam casting its shadow on Maytas Properties, apprehensions amongst overseas investors has deepened.

It should be noted that property dispute is one of the most frequent complaints by NRIs. They are unable to protect their property due to long absences or lack of awareness of laws. The largest number of complaints are from major real estate markets like Delhi, Mumbai, Bangalore, Andhra Pradesh, Kerala and Punjab.

The nature of the complaints are mainly protection of property that has been forcibly occupied or encroached, dispute relating to division of property or inheritance and cases where investors have been cheated by real estate developers.

What actions are being taken by Government?

A minister from MOIA has mentioned that, following this flood of complaints, he had written to state governments asking them to appoint nodal officers for civil, judicial and police matters. These nodal officers are independent from NRI cells that are dedicated for issues related to financial or welfare interests of overseas Indians. The ministry has also planned a session on property disputes at the Pravasi Bharatiya Diwas in January 2010. The purpose of the interactive session is three-fold: allowing NRIs to invest safely in realty, putting in place an institutional mechanism at the state-level for property related disputes and providing a channel for credible information relating to property and inheritance laws.