Showing posts with label Real Estate. Show all posts
Showing posts with label Real Estate. Show all posts

Friday, March 15, 2024

What is political corporate mafia? How is it causing harm in India?

"Political corporate mafia" refers to a nexus between politicians, corporate entities, and criminal elements that work together to exploit resources, manipulate regulations, and engage in corrupt practices for their own benefit. This term implies a collusion where political power is used to advance the interests of corporations, often at the expense of public welfare and democratic principles.

In India, the concept of political corporate mafia has been associated with various forms of corruption and abuse of power. Here are some ways it causes harm :


 1.       Corruption :  Political corporate mafia often engage in bribery, kickbacks, and other forms of corruption to influence government policies, contracts, and regulatory decisions. This leads to the misallocation of resources and undermines the rule of law.


 2.       Resource Exploitation :  The nexus between politicians and corporations can lead to the exploitation of natural resources without regard for environmental sustainability or local communities' well-being. This often occurs through illegal mining, land grabs, and deforestation, causing ecological damage and displacing indigenous peoples.


 3.       Tax Evasion :  Corporations colluding with politicians may evade taxes through various loopholes and illicit means, depriving the government of revenue needed for public services such as education, healthcare, and infrastructure development.


 4.       Monopoly and Crony Capitalism :  Political corporate mafia can create monopolies or oligopolies in certain industries by manipulating regulations and stifling competition. This leads to reduced consumer choice, higher prices, and lower quality of goods and services.


 5.       Undermining Democracy :  When corporations exert undue influence over politicians through financial contributions or other means, it erodes the democratic process by favoring the interests of the wealthy and powerful over those of ordinary citizens. This can lead to a loss of public trust in democratic institutions. 


Overall, the political corporate mafia in India undermines economic development, environmental sustainability, social justice, and democratic governance. Efforts to combat this phenomenon require strengthening transparency, accountability, and institutional integrity, as well as promoting civic engagement and the rule of law.



Monday, February 10, 2014

Benefits and Advantages of Real Estate Bill, 2013


The Bill proposes to regulate transactions in the real estate sector and is in pursuance of the powers under Entries 6, 7 and 46 of the Concurrent List of the Constitution, which deals with Transfer of Property, Registration of Deeds and Documents, and Contracts. The draft Bill has been prepared after detailed deliberations with the State Governments and concerned Central Government Ministries, and after having suitably incorporated the suggestions received from them.

1)     The Bill will bring about standardization in the sector leading to healthy and orderly growth of the industry through introduction of definitions such as ‘apartment’, ‘common areas’, ‘carpet area’, ‘advertisement’, ‘real estate project’, ‘prospectus’ etc. Introduction of the concept of using only ‘carpet area’ for sale which has till now been ambiguously sold as super area, super built up area etc., will curb unfair trade practices.

2)      The Bill like other sectors such as telecom, electricity, banking, securities, insurance etc. provides for specialized regulation and enforcement which includes both curative and preventive measures, with powers to enforce specific performance, not available under the consumer laws. The Authority has powers to give directions for specific performance powers to impose penalty for non-registration of projects including imprisonment for continuous violation upto 3 yrs and impose penalty in case of other contraventions.

3)     The Bill proposes to register real estate agents which have hitherto been un-regulated, with clear responsibilities and functions, thereby leading to money trail and curbing money laundering. This clause has been added on the recommendations of the Department of Revenue, Ministry of Finance.

4)     The Bill aims to ensure consumer protection, by making it mandatory for promoters to register all projects, prior to sale; and only after having received all approvals from development/municipal authorities thereby protecting buyer investments.

5)     The Bill will promote transparency and fair and ethical business practices, relating to transactions, through disclosure of project details and contractual obligations vis-à-vis the project and the buyer,  promoting informed choice for the buyers. This will substantially reduce the power asymmetry prevalent in real estate transactions.

6)     The Bill seeks to establish a regulatory oversight mechanism, through Real Estate Authority(s) and Appellate Tribunal in the States, to enforce accountability norms for the promoter buyer and the real estate agents.

7)     The Bill will infuse professionalism and promote planned development of the real estate sector through the promotional role of the Regulatory Authority.

8)     The Bill makes it mandatory upon the promoters to deposit  70% or such lesser per cent as notified by the Appropriate Government to cover the construction cost of the project of funds received by the Promoter in a separate bank account, for purposes of ensuring timely completion of projects to be used only for that project, which shall help in timely completion of projects, and prevent fund diversion.

9)     The Bill provides for a speedy and specialized adjudication mechanism to settle disputes between the promoter, buyer and real estate agents, thereby de-clogging the civil courts and consumer forums, from disputes in the real estate sector.

10)  The Bill will catalyze domestic and foreign investment into the sector, thereby contributing to enhanced activity, and increase in GDP growth.
 



Thursday, February 6, 2014

What is stamp duty



What is stamp duty? Why should it be paid and by when?
It is a tax and must be paid in full and on time. A delay attracts penalty at 2% per month, subject to maximum penalty of 200% of the deficit amount of stamp duty. Documents lodged with the sub-registrar/superintendent of stamps prior to any amnesty scheme attract a lump sum reduced penalty. Documents not properly stamped are not admitted in court as evidence. It is payable before execution of the document or on the day of execution of document or on the next working day. Execution of a document means putting signatures on the instrument by persons party to the document.

Who pays?
In the absence of an agreement to the contrary, the purchaser/transferee has to pay or in case of property exchange, both parties have to bear it equally.

On what instruments does stamp duty have to be paid?
Instruments include every document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of shares, debentures proxy and receipt (which is charged under Indian Stamp Act, 1899). Except transfer by will (or by original nomination in a co-operative society) all transfer documents including agreements to sell, conveyance deed, gift deed, mortgage deed, exchange deed, deed of partition, power of attorneys, leave and licence agreement, agreement of tenancy, lease deeds, power of attorney to sell for consideration etc. have to be properly stamped. When a nominee transfers the flat subsequently in the name of legal heir, such transfer also requires stamp duty.

If you have purchased a flat in a co-operative society on or after December 10 1985, you have to pay stamp duty on market value as per the Ready Reckoner, issued every year  in January.

This is a public document, available in any law bookshop. Market value is the value as worked out as per the Stamp Duty Ready Reckoner or the consideration stated in the instrument, whichever is higher. As per a new amendment in the Income Tax act, market value for the purpose of capital gain tax is the same as the market value for stamp duty payment.

How is a flat defined?
A flat means a separate and self-contained set of premises used or intended to be used for residence, or office, or showroom, or shop or godown or for carrying on any industry or business (and includes a garage), the premises forming part of a building and includes an apartment.

In whose name is the stamp paper required to be purchased?
Stamp papers are to be purchased in the name of one of the parties to the document, otherwise such agreement will be treated as if no stamp paper was used. However, it will not make the agreement invalid and can be enforced in Law if proper duty is paid subsequently. Stamp paper is valid for six months from the date of purchase.

What is a revenue stamp?
It is a tax of Re.1 in the form of revenue stamp, which should be affixed on receipt for any money or other property, the amount or value of which exceeds Rs. 5,000.

Is stamp duty payable on the instrument or transaction?
It is payable on instruments. If any information essential for working out stamp duty is missing, the valuation officer can call for it. Information such as the Carpet or Built-up area, number of floors in the building, year of construction, name of Division/Village and C.S./C.T.S. number of plot of land, must be recorded in the agreement for quicker response.

What is the rate of stamp duty?
Stamp duty on non-residential properties whether in a co- operative society or not is at a flat rate of 5% of the market value. Stamp duty on residential flats in a housing society and buildings covered under Article 25(d) of Schedule I of Bombay Stamp Act. 1958, attracts concessional rates depending upon its market value as follows: Upto Rs. 1,00,000 stamp duty is nil Between Rs. 1,00,001 to Rs.2,50,000, it is 0.5% of the value. Between Rs. 2,50,001 to Rs.5,00,000 Stamp duty is Rs. 1,250 + 3% of the value above Rs.2,50,000. Above Rs.5,00,000 stamp duty is Rs.8,750 + 5% of the value above Rs.5,00,000.

What precautions should one take to avoid practical difficulties later?
Generally one copy of the exchange agreement is made and registered and then there are various practical problems.

The following precautions should be taken to avoid complications:

(a) Assuming there is one 'Flat-A' owned by 'Person AA' and he wants to exchange it with 'Flat-B' owned by 'Person BB'. In the Exchange Agreement there should be a clause where it states that original agreement will be considered original agreement for 'Flat-A' and will remain with it's new owner 'Person BB' and second copy will be considered original agreement for 'Flat-B' and will remain with its new owner 'Person AA'.

(b)  Agreements should be made in duplicate. The original agreement will be charged with full stamp duty and second copy will be charged only with Rs.20.

(c)  Both agreements must be registered. The original agreement will be charged full registration fees and second copy will be charged a nominal amount.

(d)  Both the persons must keep their respective copies and will be free from each other in all respects.

FORMAT OF LEASE AGREEMENT


This Lease Agreement is made on this _____ day of (Month)____________,(Year)________ between Mr. _______________s/o Mr. _____________, R/o _________________________, (hereinafter referred to as "the LESSOR" which expression shall include him,his heirs, successors,executors, administrators,legal representatives and assignees) of the one part and M/s ______________ with their head office at __________________ through their representative _________________________________, hereinafter called "the LESSEE" which expression shall unless the context or the subject otherwise include him, his heirs, his successors executors, representatives and assigns) of the other part.

AND WHEREAS the LESSOR is the absolute and legal Owner and Landlord of all that piece and parcel of property bearing Flat No. __________ (Full Address)_______________________________________..

AND WHEREAS the LESSOR has agreed to give on rent the above mentioned Duplex flat consisting of 2 bed rooms, living/dinning, 2-bathrooms, kitchen and 2 court yards for which possession will be retained by the LESSOR.

AND WHEREAS the LESSEE has requested the LESSOR to allow the LESSEE use and the occupation of the said premises for the purpose of residential accommodation of their employee/associate/consultant, Mr. ____________, his family members and his bonafide guests.

NOW THEREFORE THIS DEED WITNESSETH AND THE PARTIES MUTUALLY COVENANT WITH EACH OTHER AS FOLLOWS:


1. The LESSOR hereby agrees to grant lease and permission to the LESSEE to use the subject property therein for his residence and that of his family and bonafide guests on and from __________(date), and LESSEE herein has agreed to take the subject property on lease basis with effect from the said date. The period of lease is for 18 months from (date)__________, to (date)______.

2. In consideration of the LESSOR granting lease to the LESSEE, the LESSEE shall pay the LESSOR a monthly rent of Rs. ________ (Rupees in words) excluding water and electricity charges. The rent as above said, shall be payable by the lessee payable in advance by ___ day of respective month of the English Calendar for which the rent is due.

3. The LESSOR may at his sole discretion extend the period of lease agreement for another six months with no increase in rent after______

4. The LESSEE shall furnish to the LESSOR interest free security deposit of Rs._________ (Rupees in words) which will be paid by the LESSEE to the LESSOR at the time of physically taking the possession of the property, to be held by the LESSOR and which shall be refunded at the time of vacating the premise, by the LESSEE or on termination of this lease and vacant and peaceful possession handed over by the LESSEE to the LESSOR.

5. The LESSEE shall pay all charges for electricity and water consumed and telephone usage by him in the said premises direct to the authorities concerned.

6. That the LESSOR is fully empowered, authorized and able to make this Deed of the Lease and will hold LESSEE free and harmless of any demands, encumbrances, claims, actions or proceedings by others in respect of the quiet possession of the premises and the LESSOR further states that it will ensure to LESSEE peaceful and uninterrupted use and enjoyment of the premises during the term of the lease.

7. The LESSEE shall be liable to undertake all the day to day repairs of the electricity, sanitary and water supply.

8. That the LESSOR shall be responsible for the payments of any taxes or levies imposed by the Government of India or Governmental authorities and that all laws and rules, regulations of such authorities will fully be complied by the LESSOR.

9. The LESSEE shall not during the period of the Lease Agreement make any structural alterations in the said premises without the prior written consent of the LESSOR, but shall be at liberty to install air-conditioners and domestic electric appliances and other conveniences reasonably required by him and which remain the property of the LESSEE and shall be removed by him on vacating of the premises.

10. The LESSEE shall use the said premises as a residential accommodation for the exclusive use of Mr. ___________ his family, their servants and bonafide guests and shall not do or suffer to be done anything therein which is likely to be a nuisance or annoyance to other occupants or to prejudice the rights of the LESSOR as the Owner of the said premises. If Mr. ___________ vacates the premises before the expiry of the Lease Deed, it shall be handed over back to the Lessor.

11. That the "LESSEE" shall not have the right to sublet or underlet the premises either partly or wholly to any of its subsidiary/associate concerns or to any other person, body, association or entity.

12. The LESSEE will keep and maintain the LESSOR'S fixtures and fittings and effects in the said premises in good order and condition and upon the termination of the lease the LESSEE will leave the same as provided by the LESSOR to the LESSEE at the time of handing over the possession of the said premises (reasonable wear and tear and loss accepted).

13. The LESSEE shall have an option of terminating this Lease Agreement by giving _____months notice. However, this option can be exercised only after expiry of the first _____ months, alternatively after payment of ___ months minimum rent. On doing so the LESSOR shall return to the LESSEE all unadjusted money paid to him in the form of advance rent or security deposit.

14. On the termination of the Lease, LESSEE shall forthwith remove themselves and their respective belongings, articles and other things from the said premises.

15. All keys belonging to the said premises shall be handed over to the LESSEE at the time of signing of the Lease Agreement which the LESSEE shall return to the LESSOR on the expiry or the termination of the Lease Agreement.

16. The LESSOR shall not be responsible for any theft, loss, damage or destruction of any property of the LESSEE or the occupant living in the said premises not for any bodily injury to any person living in the said premises during the occupancy of the leased premises from any cause whatsoever.

17. It is agreed that if the LESSEE commits a breach of the terms by doing any structural changes in the premises or non payment of rent etc., the LESSOR shall be entitled to revoke the lease granted after giving the LESSEE ______one months written notice to remedy the breach complained of. On expiry of the said period of one month, the LESSOR shall have the right to determine the Lease Agreement if the LESSEE has not remedied the breach complained of.

18. The LESSOR and the LESSOR'S authorized representatives shall have full liberty to inspect the leased premises at a reasonable hour by giving 24 hr. notice. That LESSOR shall be to enter the said premises to view the condition thereof to effect any such repairs as the LESSOR is required to do pursuant to its covenants in that behalf herein contained and LESSEE shall allow the same to be done without any objection.

19. In case the LESSEE does not vacate the premises on the expiry of the lease period, the LESSEE shall pay a daily charge of Rs. ________ extra as penalty to the LESSOR till the date of vacation of the said premises. This penalty shall be without prejudice to the right of the Lessor to take steps to take the possession of the said premises.

20. At the time of handing over the vacant and peaceful possession of the premises by the LESSEE to the LESSOR the LESSOR has to refund all the money paid to him as security deposit after the justified deductions (including any pending electrical, water and telephone bills).

21. That all payments described in this Deed of the Lease shall become due as from the date here above stated. Under no circumstances shall LESSEE occupy the premises until such payments have been made.



LESSOR

WITNESSES:

1.

2.

LESSEE

Format of Agreement for Sale of a Flat



Agreement for Sale


THIS AGREEMENT made at ________ (city) on the __ day of ______ (year)
Between

___________________________, of ________(city), Indian Inhabitant, residing at ______________________ ______________, hereinafter called "The Vendor" (which expression shall unless it be repugnant to the context or meaning thereof shall mean and include his heirs, legal representatives, executors and administrators) of the One Part
And

________________________, of ________ (city), Indian Inhabitant, residing at __________________________ hereinafter called "The Purchaser" (which expression shall unless it be repugnant to the context or meaning thereof shall mean and include his heirs, legal representatives, executors, administrators and assigns) of the Other Part;

WHEREAS the Vendor is the owner of flat No._____, admeasuring about _____ square feet on ___floor of building known as "_________" (hereinafter referred to as "the said Building") (hereinafter referred to as "the said Flat" and which is more particularly described in the schedule to this agreement;) belonging to ______________ Co-operative Housing Society Limited situated and he/she is the member of the ______________ Co-operative Housing Society Limited, registered under Serial No._________ of _____ (hereinafter referred to as "the said Society") and as a member and as the owner of the said flat in the Society he was allotted five fully-paid-up shares of the said Society of the face value of Rs.50/- (Rupees Fifty Only) each bearing distinctive Nos._________ to ____________ (both inclusive) under share certificate No.___ (hereinafter referred to as "the said Shares") ;

AND WHEREAS the Vendor is now absolutely seized and possessed of and is otherwise well and sufficiently entitled to the said Flat in the said Building of the said Society;

AND WHEREAS the Vendor herein has agreed to transfer and the Purchaser has agreed to acquire all right, title and interest of the Vendor in the said Flat and the said Shares with all legal consequences including the right of occupation, including his right, title and interest in the said Flat for a total consideration of Rs. ________/- (Rupees ______________________ only);

AND WHEREAS the Parties hereto have agreed to reduce into writing the Terms and Conditions on which the Vendor has agreed to transfer and the Purchaser has agreed to purchase and acquire the right, title and interest of the Vendor in the said Flat including the entire interest of the Vendor in the said Society;

NOW IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS: 

1.    The Vendor doth hereby agree to transfer unto the Purchaser and the Purchaser doth hereby agree to purchase and acquire all the right, title and interest of the Vendor in the said Society including the said Flat admeasuring about _____ Square Feet of built up area on the ____ floor of the building known as ____________________ belonging to the ___________________ Co-operative Housing Society Limited situated at _________________________, together with the said Shares bearing distinctive Nos.________ to _______ (both inclusive) allotted under share certificate No.______ and all the right of the Vendor as to the use, occupation and enjoyment and ownership of the said Flat together with all rights, title and interest of the Vendor in the said Society for a total consideration of Rs.________/- (Rupees __________________ _______ only) to be paid by the Purchaser to the Vendor in the manner hereinafter mentioned.
 
2.    The said consideration will be paid by the Purchaser to the Vendor as follows: that is to say:
a. Rs. ________/- (Rupees_________________________ only) paid on or before execution of this agreement as Earnest Money (the payment and receipt whereof the Vendor doth hereby admit and acknowledge and acquit, release and discharge the Purchaser from the payment and receipt thereof and every part thereof); and
b. the Balance consideration of Rs. ________/- (Rupees ______________________ only) will be paid on or before ____________ and against the delivery of vacant and peaceful possession of the said Flat by the Vendor to the Purchaser.
 
3.    It is agreed that in the event of any delay or default by the Purchaser in making payment of the balance consideration on the due date, the Vendor shall be entitled to give seven days notice in writing to the Purchaser making time the essence of the contract and if the Purchaser fails to make payment within such notice period, then in that event this Agreement shall be terminated and the Vendor shall be entitled to forfeit the earnest money of Rs.__________/- Rupees __________________________ only) paid by the Purchaser on the execution hereof.
 
4.    It is agreed between the parties that if there is any delay or default on the part of the Vendor in performing his part of the contract then the Purchaser shall be entitled to specific performance of this Agreement together with right to claim costs, charges and expenses and losses from the Vendor.
 
5.    The Vendor doth hereby declare and convenant with the Purchaser that the said Flat is free from all encumbrances of any nature whatsoever and that the Vendor has full right, title and interest in the said Flat and has full right and authority to assign and transfer his entire interest in the said Society including the said Flat and the said Shares to the Purchaser.
 
6.    The Vendor has represented to the Purchaser :- 

(a). that the Vendor has paid all the dues and outgoings in respect of the said Flat up-to-date. 

(b). that the said Flat is free from all encumbrances. 

(c). that the said Flat belongs to the Vendor absolutely and that no other person or persons have any right, title or interest whatsoever therein by way of sale, gift, exchange, inheritance, lease, lien or otherwise in the said shares / said flat. 

(d). that notwithstanding anything herein contained, any act, deed, matter or thing of whatsoever nature done by the Vendor or any person or persons lawfully or equitably claiming by from, through or in trust for Him, the Vendor has full right, power and absolute authority to sell or transfer to the Purchaser the said Flat and his right, title and interest in the said Society and that the Vendor has not done or committed or omitted to do any act, deed, matter or thing whereby the ownership, possession and/or occupation of the said Flat by the Vendor may be rendered illegal and/or unauthorized for any reason or on any account. 

(e). that the Vendor shall obtain the necessary No Objection Certificate from the said Society for transfer, sale of the interest of the Vendor in the said Society, as well as the right, title and interest of the Vendor in the said Flat as herein contained to the Purchaser and also to the admission of the Purchaser to the membership of the said Society in his place and instead of the Vendor when the sale herein is completed by delivering the vacant and peaceful possession of the said flat to the Purchaser. 

(f). that on payment of the full purchase price herein reserved, the Purchaser shall be entitled to the vacant and peaceful possession of the said Flat.
 
7.    The Vendor doth hereby agree to sign and execute any deed or writing as well as all other papers and documents as may be required by the Purchaser for transferring the said Flat and the said shares to the name of the Purchaser in pursuance of this Agreement.
 
8.    The Purchaser doth hereby covenant with the Vendor that he shall always abide by the Rules, Regulations and By-laws of the said Society and shall pay the municipal taxes and maintenance charges in respect of the said Flat from the day the Vendor delivers possession of the said Flat to the Purchaser. It is specifically agreed by and between the parties that till the said Flat is transferred in the name of the Purchaser, the Purchaser shall not be liable to pay any maintenance charges in respect of the said Flat to the said Society and the same shall be borne by the Vendor.
 
9.    That the Vendor declares that his Membership of the said Society is subsisting and is in full force and has not been terminated.
 
10.  The Vendor has represented to the Purchaser that the total transfer fee / transfer premium / donation payable to the said Society for transfer of the said flat / said shares of the said society in the name of the Purchaser shall be borne and paid by both the parties in equal proportion.
 
11.  It is agreed between the Vendor and the Purchaser that the expenses for stamp duty on these presents or on final sale deed / transfer deed and registration charges in respect of this transfer shall be borne and paid by the Purchaser alone and the Vendor shall not be liable to pay the same or any part thereof. However, the stamp duty or duties in respect of all previous transfers in respect of the said flat shall be the responsibility of the Vendor.
 
12.  The Vendor doth hereby undertake to hand over all the documents including share certificate, receipts, papers concerning the said Flat to the Purchaser against the receipt of the balance consideration of Rs. _________/- (Rupees ________________________ only).
 
13.  The Vendor doth hereby undertake to do and to execute all acts, deeds, matters and things as and when it is necessary, proper or expedient for the purpose of fully and effectually transferring the said Flat and the said Shares of the said Society to and in favour of the Purchaser in the record of the said Society to enable the Purchaser to have and to hold the said Flat and the said Shares absolutely.



SIGNED AND DELIVERED by the }

withinnamed "Vendor" }


Shri ________________ }                                                                    ___________________
in the presence of: }
1. }


2. }


SIGNED AND DELIVERED by the }


withinnamed "Purchaser" }


Shri ____________ }                                                                            __________________
in the presence of: }
1. }


2. }


Received of and from the withinnamed } Purchaser a sum of Rs. ________/- } (Rupees _____________ only) as } earnest money for the transfer/purchase } of the said Flat/said Shares. }

I say Received.

WITNESSES

1.

2.
Vendor