Since all facilities are already in place, investing in a delivered project makes great sense if you are willing to pay extra,
Anand Sharma, an executive with an MNC, recently retired from his company. He decided to use his savings to buy a house in a developer project in Gurgaon that was delivered last month. The property is currently fetching him a rental income of R20,000, which he is hoping to hike by R5,000 next year after renewal of lease.
With new launches being the flavour of the year, everybody seems to have forgotten about apartments in projects that have already been delivered -the `leftovers', to be precise. These are usually apartments on the higher floors, odd numbered floors, bigger sizes and not necessarily gardenor club-facing. So, if you are planning to buy a house, it makes sense to first ask yourself to which category you belong -the one who has the money and wherewithal to go in for a ready-to-move-in apartment or the one with a smaller budget and patience to wait longer for a new project to be completed?
Real estate experts point out that if you have made up your mind about going in for a ready-to-move-in apartment, that too late in life, such units could offer you a chance to strike a great bargain.
Your biggest advantage is that your neighbours have already moved in, there is a functional club and all the facilities that you can ask for are up and running. The only hiccup is that it may put a big dent in your budget.
Few and far between These apartments could either be in an established location or in a project that is nearing completion.
Gaursons recently launched 400 ready-to-move-in apartments in Ghaziabad at around R2,000 sq ft. The launch price of these units was R1,600 sq ft. “A builder may have a few apartments left with him due to cancellations, transfer refund issues or some other reason. It is definitely an expensive option but worth looking at,“ points out Manoj Gaur, joint managing director, Gaursons.
When a project nears completion, the cost increases by 20-30%, depending on the location. A buyer may get a discount of 10-12% on the total cost of a newly launched property that he may not be able to claim if he decides to go in for a readyto-move-in option. Parking charges and other costs also increase as the property nears completion or is ready to be occupied.
“My suggestion is that even while going for new launches, buyers should look at the builder's track record and whether the older projects have been delivered on time,“ Gaur says.
These units are few and far between and comprise less than 15-20% of the total stock, points out Vijay Gupta, CMD, Orris Infrastructure. Many are sold by word-of mouth, adds Ashwani Prakash, executive director, Paramount Group.
Before deciding to go in for a ready home, an individual should ascertain his capacity to pay more, the availability of capital etc. As compared to a new launch, construction and delivery risk is almost non-existent for such a property. However, if a person is willing to wait longer and has a budget constraint, he should go in for a new launch project.
By a recent notification by the Lieutenant Governor of Delhi, rates of registration fees leviable on various legal instruments pertaining to sale, lease, gift, partition, etc of immovable properties in the National Capital Territory of Delhi have been revised.
These rates stand revised as according to the government of Delhi, the previous rates were very nominal and had remained unchanged for long, causing loss in revenue. The Registration Act, 1908, lays down provisions regarding which legal instruments require and those that do not require compulsory registration. The registrability of certain legal instruments of transfer of immovable property along with their revised registration fees are explained below.
Registration of sale deed and agreement to sell A sale deed of an immovable property requires compulsory registration. With respect to properties in Delhi, in case possession has been granted at the time of execution of agreement to sell (ATS), the ATS should be registered.
This is because handing over the possession of a property, simultaneous to executing the ATS, creates interest of the buyer in the property. As per the notification, registration fee on sale deed/conveyance deed shall now be 1% of the consideration amount set forth in the document or value as per prevailing circle rate whichever is higher but subject to a maximum amount of R50,000.
In case an ATS has been executed without granting possession of property to the buyer and simply states the property will be sold to the buyer on a future date, such ATS may or may not be registered. Even if the ATS contains clauses pertaining to payment of earnest money or entire/part of purchase money, such ATS still does not require registration.
Registration of lease deed Under the Registration Act, 1908, there are certain kinds of lease of a property that require compulsory registration. Registration is compulsory for a property that is being leased out from (a) year to year, or (b) being leased out for a term exceeding one year, or (c) reserving yearly rent. On the other hand, registration is optional for lease documents that create lease for a term that is less than one year and not reserving yearly rent. Such lease is also referred to as month-tomonth tenancy. As per the recent notification, registration fees on a lease deed now stands increased to R1,000 whereas earlier it was R16.
Registration of gift deed As per Section 17 of the Registration Act, 1908, the gift deed of an immoveable property must be compulsorily registered. Earlier, only R101 was to be paid to register a gift deed. As per the notification, registration fees on gift deed has now been increased to 1% of the consideration amount set forth in the gift deed or value according to prevailing circle rate whichever is higher but subject to a maximum of R50,000.
Registration of partition deed Partition of immoveable property cannot be effected unless the partition deed has been duly registered.
Registration fees on partition deeds is calculated based on the value of share of the property on which stamp duty is to be assessed as per the Indian Stamp Act, 1899. To illustrate, let's take an example of a property of R1 lakh that is being divided into four portions A, B, C and D. Values of these four portions are R40,000; R 30,000; R20,000 and R 10,000 respectively. In such a scenario, registration fee shall be calculated and charged on the amount that remains after deducting value of the largest portion of the property. That is, registration fee shall be equivalent to 1% of R60,000 = R600.
Registration of a legal document, wherever required to be registered by law, makes them admissible in evidence in courts. Not registering a document that otherwise requires compulsory registration by law renders the document inadmissible in evidence in the courts of law.
The author is senior partner, ZEUS Law Associates, a corporate commercial law firm. One of its areas of specialisation is Real Estate transaction and litigation work.
