BENAMI PROPERTIES ARE PUT ON SALE IN MAJOR CITIES ARE UNDER SCRUTINY


In Major metros, a huge number of properties, like sites, plots, apartments, coffee and tea estate, resorts, large commercial buildings, houses, agricultural land and industrial land are PUT FOR SALE ON VARIOUS Websites, through brokers and builders, which are supposed to be or benami properties.

The sellers or developers or agents or the owners may project it as a very safe and good titled property, but, over 350 properties attached under Benami Transaction Act and multifold properties in major metros are under scrutiny.

The buyers/investors are ADVISED TO be VERY CAREFUL before transacting in such properties.

Some properties are in the name of individuals, corporates, builders, agents, relatives and have various backgrounds and it is difficult to find out the nature of the properties.

HENCE, THE BUYERS ARE STRONGLY ADVISED TO THOROUGHLY EXAMINE AND SCRUTINISE THE TITLE AND THE BACKGROUND OF THE PROPERTY AS WELL AS THE SELLER – BEFORE INITIATING ANY TRANSACTION.

The Prime Minister has hinted that there is a strong action initiated soon against such Benami properties.  There is an unconfirmed news in the market that BENAMIS are trying to borrow money or trying to shift their liabilities on others-fearing criminal action/proceedings against them by the State.

Rs.17000 Crores Deposited in 58000 accounts and withdrawn post dmonetisation – investigation is on


The Ministry of Corporate Affairs has said that its investigation has found thousands of dubious banking transactions in the aftermath of note ban on November 8, 2016.

The Ministry of Corporate Affairs in a statement said that about Rs 17,000 crore was deposited in 58,000 accounts and withdrawn from the same and some of the bank accounts had a negative opening balance on November 8, 2016.

“Preliminary enquiry on the basis of information received from 56 banks in respect of 35,000 companies involving 58,000 accounts has revealed that an amount of over Rs 17,000 crore was deposited and withdrawn post demonetisation,” the statement read.

“In one case, a company which had a negative opening balance on 8th November, 2016, deposited and withdrew Rs 2,484 crore post-demonetisation,” it added.

On the basis of its investigation “around 2.24 lakh companies have been struck off till date for remaining inactive for a period of two years or more.” Following the massive drive to strike off the defaulting companies, restrictions have been imposed on operation of their bank accounts.

ACTION BY AGENCIES

These companies have been barred from “sale and transfer of moveable and immoveable properties”. The Centre has shared information about defaulting companies with the respective governments depending on the location of the firm.

Enforcement authorities including Central Board of Direct Taxes, Financial Intelligence Unit, Department of Financial Services and the Reserve Bank of India have also been advised to take further action based on the preliminary enquiry.

“The Prime Minister’s Office has constituted a Special Task Force under Joint Chairmanship of Revenue Secretary and Secretary, Corporate Affairs, to oversee the drive against such defaulting companies with the help of various enforcement agencies,” the statement issued by the Ministry of Corporate Affairs said.

“The Special Task Force has so far met five times and action has been initiated against several defaulting companies, which is expected to help in the drive against black money,” it added.

MARKET REPORT- A PRESS REPORT – REAL ESTATE SCENARIO – Planning to buy for self use and occupation – Wait till Feb, March 2018 – A Suggestion


The implementation of the new real estate regulation along with the ongoing insolvency and bankruptcy proceedings by the National Company Law Tribunal (NCLT) against debt-ridden builders are likely to push for sale of distressed assets, triggering a fall in land prices by February 2018, according to a report by brokerage firm Ambit Capital Pvt. Ltd.

The report also indicates stress for non-banking finance companies (NBFC) and housing finance companies (HFCs) that have large exposure to developer loans.

The report, titled ‘Real Estate-Recovery is far away’, pointed out that limited availability of funding for real estate developers, the inception of Real Estate (Regulation and Development) Act and NCLT process are making developers hold off from launching new projects. Besides, with inventory piling up over the last three to four years, most developers are focused on offloading their current stock rather than launching new projects.

As per a 5 July report by property consultant Knight Frank, launches of residential projects in India’s top eight cities declined by 41% in the first six months of this year.

“We expect land prices to fall from February 2018 as Insolvency Practitioners (IPs) liquidate the assets of bankrupt companies. As land prices fall, it is natural that real estate developers launch cheaper properties through 2019 and 2020,” said the report.

The failed auctions for prime plots in Mumbai and Oberoi Realty’s discounted land purchase in Thane from GlaxoSmithKline Pharmaceuticals (GSK)) is proof of this dynamic, it said.

In September, GSK sold around 60 acres land at Thane in Maharashtra to Oberoi Realty for around Rs555 crore. The transaction translates into Rs9 crore per acre. A decade ago, the same plot of land would have fetched double the amount, the report said.

“Thanks to the oversupply of flats in Thane and due to punitive sanctions imposed by RERA, no other developer had the means or the gumption to bid for this plot,” it said.

NCLT has started insolvency proceedings against Delhi based developers like Amrapali Infrastructure and Jaypee Infratech for failing to repay loans to banks.

“Land prices have already started softening as landowners have become more realistic. Landowners and co-developers have understood the reality of the market and have started rationalizing their expectations. Instead, developers and landowners are opting for partnerships and more structured transaction in the form of area or revenue sharing,” said Vrushank Mehta, head of the corporate strategy and land acquisition at Wadhwa Group, a Mumbai-based realty firm.

The report by Ambit also said that because of fall in land and property prices homeowners may start defaulting on their loans. “Homeowners who are repaying mortgages which are far bigger than the prevalent prices of their property could start defaulting on their mortgages,” the report stated, adding that NBFCs and HFCs with large developer loan portfolios may take a hit.

According to the report, JM Financial Ltd, Piramal Enterprises Ltd, and Edelweiss Financial Services Ltd have the highest exposure to developer loans. “There is trouble ahead for NBFCs/HFCs since their ability to refinance or evergreen stressed developer loans will progressively get compromised as the downturn prolongs. Real estate developers with strong balance sheet and strong brands will benefit,” Ambit said.

Analysts are of the view that only those NBFCs and HFCs may face stress that has not followed adequate risk management policies and have large exposures in high-end properties.

Harsha Patkar, senior analyst—financial institutions at India Ratings said that a slowdown in real estate was prevalent even during 2014 and that property prices have corrected during the current fiscal after the demonetization impact started to wear off.

“Stress on NBFCs and HFCs will depend on the kind of portfolio they have and the risk mitigation policies they follow. Lenders have ring-fenced the project cash flows as well as have decent cash flow cover over assets depending on the project stage,” he said.

Ambit expects Godrej Properties and Sobha Developers to gain market share in the real estate business. It said that property market will see a consolidation and only those developers will survive who can manage their capital well and execute projects speedily.

 

PRR – BANGALORE – A REALITY SOON


The Peripheral Ring Road, (PRR)65-km eight-lane road project, aimed at decongesting vehicular traffic in the city, was conceived in 2006. The whopping Rs 8,100 crore that needed to be paid to farmers as compensation for the acquisition of 1,910 acres of land needed for the project caused it to come to a standstill due to the paucity of funds with the BDA. Japan International Cooperation Agency has agreed to fund Rs  3,850 crore of the project cost.

 

Meanwhile, the SPV is also looking at generating nearly Rs 9,918 crore by the levy of betterment tax on properties lying within a 1-km distance on both sides of the road and other ways.

The cost of the project is funded by both Central Government and the State Government and the approximate expenditure may be in the range of over Rs.20,000 crore.

The SPV was formed in the name of Bangalore Development Corporation Ltd with the Registrar of Companies to implement the Rs 11,950-crore Peripheral Ring Road (PRR) project was mooted, it finally became a reality on July 18.

Apart from BDA, the Karnataka Urban Infrastructure Development Finance Corporation, BBMP, BMTC, BESCOM, BWSSB and the state government’s Town and Country Planning Department are partners in this independent body.

The National Highways Authority of India has been entrusted with the role of preparing the Detailed Project Report for it.

All the properties in and around PRR will be connected and the property rates will go up.

REAL ESTATE MARKET PLUNGES DOWN


LATEST MOOD IN THE PROPERTY MARKET

The buyers stayed out of the market in the last three months and the sales down by 32% in all the major metros.

The buyers of properties are reluctant to make any deals and are awaiting clarity and clarification regarding RERA, GST and the demonetization have hit the cash flow and the proposed Automation by the industry, made things worse.   Few European countries are reeling under severe financial crisis and the H1B Visa issue has not been sorted out.  In another development, major IT stalwarts are downsizing their workforce and startups entry is down by over 50%.

All these factors contributed to the slump in the real estate market across the country.

In a recent development, one of the leading builders is under tax scrutiny.

It is widely seen that Cash component in all the real estate basic dealings has come down to a trickle.

ADVICE

DO NOT BUY UNAUTHORISED AND ILLEGAL PROPERTIES.

DO NOT BUY B KATHA PROPERTIES.

DO NOT THINK THAT ALL BANK AUCTIONED PROPERTIES HAVE GOOD TITLE.

DO NOT THINK THAT ALL PROPERTIES OF TOP BUILDERS ARE CLEAN TITLED PROPERTY.

DO NOT TRANSACT WITH UNREGISTERED RERA AGENTS.

DO NOT PAY ANY CASH FOR ANY/EVERY/ALL YOUR PROPERTY TRANSACTION.

DO NOT BUY PROPERTY WITHOUT THOROUGH AND DILIGENT ENQUIRY AND VERIFICATION.