It is everyone’s dream to own a home and live in it. In rapidly urbanising Indian cities, especially Bangalore, without the right homework, chasing that dream can result in far more stress than expected.
A range of documents is needed at various stages to proceed with a property deal. Regulations, rules, documents, and a maze of procedures can stump you or complicate matters if you are not well prepared. Many of us are unfamiliar with what is required until we actually face such a situation. We are also prone to commit mistakes if we do not ask the right questions at the right time.
Having a lawyer does help, but the more aware we are as citizens and consumers, the better it is, given the lakhs and crores of rupees involved in buying, selling, or investing in property.
Buying, Investing and Renting Property in Bengaluru
A Citizen Matters guide
Published by Oorvani Media, 2014
Available online, click here.
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The interconnection between politics and corruption is widespread throughout the world, as you will know. In India, land management is at the centre of much of the obscurity, inefficiency, and corruption we see in government services and approvals to citizens and real estate developers alike. There are many cases of fraud which come to light from time to time.
Many of us are also investing in properties in the city from outside through our representatives and relatives. Even in such cases, to make good on our investments, it is best to be aware of the relevant details ahead of
This first-of-its-kind guidebook, launched in India for Bengaluru, will help you become familiar with the issues involved and also prepare you better as you go into a deal. The book is also a good reference for you when you get involved in a deal. It is an all-in-one citizens’ book which serves as a reference written in layman’s language. It will help reduce the unwanted stress which comes from not having this kind of information handy. It will ultimately help buyers, sellers, and investors make better decisions.
Please note one important point: this book does not provide legal advice, it is only a guide. It does not cover the hundreds of unique cases which emerge in Bangalore which are the result of a complex mess of
regulations, loopholes, and conniving officials and citizens or developers. However, it will prepare you to do your diligence well. It is also not a substitute for a good lawyer. It is a guidebook that unshackles vital information and lets it be easily accessible to buyers, sellers, and investors.
The book has gone through an elaborate technical and language review. We do hope mistakes and errors (if any) are few and far between. We would be happy to receive your feedback and error-spotting reports at firstname.lastname@example.org, and we will acknowledge this in the second and later reprints.
Here is a quick brief on how Buying, Investing and Renting property in Bengaluru is organised.
Understanding the fundamentals
This group of chapters perhaps form the foundation to the entire book. Even though several other chapters are explanatory too, this section deals with the basics of land and property documentation regarding Bengaluru which you need to know about when you buy or invest.
Properties in communities
This section covers buying or investing in apartments and in homes (or villas) in the so-called ‘gated’ communities. Such communities have mushroomed all around Bengaluru with their own security and maintenance. Buying flats and homes here is not exactly the same as buying a standalone house or a site on a public street; there is more involved. Developers make expanded offerings for these homes, and hence, you need to know more about purchasing such homes.
Buying and geography
Why should geography even matter? It makes a big difference because some areas of the city may be flood-prone and unpredictably at that. Adequate structural protections are worth investigating in this light. This is not all; Bengaluru’s airports dictate the maximum vertical height of buildings, and buying flats in high-rise apartments is risky if the builder violates aviation rules to add extra floors above the permitted
height. Most developers may not do so, but given the spate of recent litigations in the Karnataka High Court, the risks are real. For the first time in India, we are blowing the lid off urban development’s best
kept secrets for Bangalore. This is bleeding edge material you will not be able to access anywhere else easily.
Legal/illegal issues and deviations
Negotiating with deviations in construction is a tough task. When you make a real estate investment, (particularly if you buy into an already developed community or constructed home), you need to know what to do if there are deviations from the sanctioned plan involved — whether it is an apartment floor plan or a massive layout plan or both. Until this year, the nature of deviations has not mattered much. But the Akrama Sakrama law has changed this perception. When brought into force, this law is likely to influence the final cost of ownership for ‘deviated’ properties.
All about registration
This is the section you need to read through first if you find yourself picking this book up when you are actively selling or buying a property. It has both a document checklist for you and a fee breakup regarding the costs involved. This section also serves as a quick, handy reference to any buying or selling of real estate.
If in the entire book, you only want to read one chapter right after you take the book home and want get to other chapters later, then this is that chapter. It helps you with become familiar with a variety of different mistakes which people make at different times in different deals. Some of these mistakes can usually be avoided with the help of good lawyers. Still, common mistakes in real estate form an expansive list, and so we hope you make good use of this section.
Eye on the money
A guidebook like this will not be complete without a section addressing numbers-savvy people as well as those who want quick access to the financial details around real estate transactions. In this light, we have covered capital gains taxes, bank loans, property tax, betterment charges, and more. Most importantly, after over a decade of confusion, the Supreme Court and the Union Ministry of Finance finally settled the
vexing matter of VAT and service tax (ST) for under-construction property sales. We have captured the essence of this in terms of applicable VAT and ST rates for your property deals, including where it does not apply.
This section serves up a set of other useful chapters. If you are buying from someone who came to own a property through a gift deed, understanding the concept of a gift deed and its practical ramifications goes a long way in simplifying the issues involved. You can also use this information to execute a gift deed yourself. There is also a special chapter on buying a BDA flat, with the most updated information from the BDA at the time this guide went into publication. And last but not the least, we provide a quick peek into the land mafia operating in the city. There is no cause for widespread alarm here, but awareness always helps.
Bonus section on renting
Renting is the most common housing activity as people settle down in their early career. Most buyers would have rented for some time until they move into their own house. Some buy property to rent it out for income. A book like this would be incomplete without a chapter on the basics involved in renting. There have also been recent changes in the rental agreement on stamping fees, little known to most renters.
Wehave inserted some elementary information here that you can refer to understand related concerns that come up when you buy property. For instance, backup electricity arrangements in gated communities involve more than meets the eye, even though every developer may promise it. Waste management is a key issue in Bengaluru today, and you can ask questions from sellers about this too. The appendices provide all this information and more.
Transacting real estate is not easy for the common man, and thus far, there have been no easy guides. In this light, we have paid careful attention to how this book is organised, and we hope it serves you well.
Buying, Investing and Renting property in Bengaluru is our third guidebook for Bangaloreans. Living in Bengaluru, the quintessential citizen guidebook released for 2012-13, was heartily welcomed by citizens, as evidenced by the fact that it sold (out) at over 150 outlets in the city as well as online. It is being re-released
with major updates in May 2014, on popular demand from book stores and retailers. Get to Know Bengaluru Better, the ‘places of interest’ guidebook is also doing very well after its release in October 2013. It is also available now (http://bangalore.citizenmatters.in/get-to-know-bengaluru-better).