How Infrastructure Status to Affordable Housing Is Beneficial to Both Developers and Home Buyers

In order to revive the slump-hit real estate industry, the Union Budget 2017 put-forward an announcement which was a win-win for both home buyers and developers. The finance minister granted an infrastructure status to affordable housing, this move is directed to give a boost to affordable housing. This proposal has been received positively by the real estate industry – right from middle-class home buyers, developers and home loan providers. The final aim of the Affordable Housing Sector Infrastructure status is to boost government’s target of providing housing for all by 2022.

Let’s get to know what benefits will be derived by real estate developers and home buyers:

Higher investment in affordable housing:

The union budget 2017 also proposed that NBFC will provide up to Rs. 20,000 crores of individual loans. The affordable housing means probability of high investment opportunities as home buyers can avail loans at a cheaper rate. It is predicted that a lot of players and new lenders will emerge with this move as interest rate moves downwards, resulting in high demand for residential real estate.

Tax exemption for developers:

Developers will get some relief from tax. The profits earned by builders will not have to pay taxes for the five years. Tax incentives alloted for infrastructure projects will result in decrease in prices. The demand for affordable homes is likely to increase given the extra cash people will have in hand due to proposed deduction of the income tax rate to 5% for taxpayers earning less than Rs 5 Lakh.

Carpet area will be counted instead of built-up area:

The biggest change under the budget was inclusion of carpet area, instead of built-up area. Carpet area of 30 sq meters limit will apply in case of municipal limits of metropolitan cities, while 60 sq meters will be the limit for the rest of the countries. This will ensure spacious home. The carpet area rule is likely to impact under construction projects to meet the afford-ability criteria.

Interest subvention:

Under Prime Minister Awas Yojana (PMAY), the government will provide the interest subvention of 4% and 3% on loans up to Rs. 9-12 lakhs. This is said to provide good boost to mass housing in all eight metro cities across the country.

Affordable housing has caught the attention of many private equity funds and it is also getting inquiries from overseas investors, even before the announcement of union budget 2017. it is also expected that equity funds and foreign investors would increase their stakes in the real estate sector. In short, the budget has got positive measures for developers, consumers and investors.

As Real Estate Market Sours, Courts Punish Delayed Projects, Relieving Buyers From Contracts

Back in the September 9, 2008 edition of The Wall Street Journal, as knowledge of the global financial crisis was both broadening and deepening, I predicted that of the myriad lawsuits being filed by real estate buyers in hopes of recovering their initial preconstruction deposits, among those with the highest probability of success were scenarios in which the developer failed to deliver the project on time.

While there is no sure way of testing this forecast, my sense is that for the most part, it is proving itself true. Take, for example, a recent opinion from the Eleventh Circuit — the highest federal appellate court with jurisdiction over Florida, and one which has been instrumental in setting the tone for the latest wave of real estate litigation. In Harvey v. Lake Buena Vista Resort, LLC, 2009 WL 19340 (11th Cir. Jan. 5, 2009), the Eleventh Circuit upheld the lower court’s order refunding deposits paid toward the purchase of an Orlando condominium, finding that the developer had breached the purchase contract by failing to deliver the unit in a timely manner. Notably, the Eleventh Circuit left the developer zero room for deviation from the promised two-year construction schedule. While the developer obtained a certificate of occupancy just five days after the two-year deadline, the court held that this was too late as a matter of law, even though the defendant testified that the extra five days were attributable to a matter outside of its control –the unusually slow processing of a necessary road permit.

Tellingly, in reaching its conclusion, the Eleventh Circuit sidestepped another issue on which the purchasers had prevailed in the lower court — that is, whether the developer had violated the disclosure provisions of the federal Interstate Land Sales Full Disclosure Act (ILSA) in failing to both register the condo with the U.S. Department of Housing and Urban Development (HUD) and furnish a federal Property Report to the buyers. As I have written previously, federal courts have been noticeably reluctant to rule for buyers on claims brought under ILSA, violations of which are often viewed as hyper-technical and immaterial in instances where a project is otherwise delivered according to a developer’s stated promises.

In contrast, it is easy to see why courts might have more sympathy for buyers in cases where construction has been unjustifiably delayed. The calculus is simple: the longer a building goes unfinished, the more time a buyer’s deposits will have been tied up in an unlivable and unsaleable project. And every day the real estate market remains mired in a historic slump only serves to exacerbate the downside to the buyer. The recent but unsurprising rash of lender foreclosure actions against developers tell a general tale of builders without funds to pay off loans, contractors, or subcontractors. This means that the many yet-to-be-finished projects around the country will miss the completion deadlines set forth under contract –if they get finished at all, that is.

As a practical matter, those buyers with potential construction delay claims who have decided that they are without the patience of Job are well-advised to assert their legal claims as quickly and decisively as possible. While construction delay may be a pathway to successful rescission of a purchase contract, generally speaking, the longer one waits to take legal action, the greater the chance that the developer will be able to argue that the buyer — by his or her own delay — has waived any legal claims.

Why Real Estate Consulting Is Good For Both Home Buyers and Developers

It is difficult for a person to strike a good property deal without the help of a real estate consultant. If you want to do it by yourself, you have to spend a lot of time and money and still the result may not be satisfactory. So it is better to leave the property matter to someone who knows the ins and outs of it.

Property consultants generally possess good knowledge and experience in real estate; they connect with a large number of people and including developer, property owner, buyers, brokers, etc and keep themselves updated with current market trends. They are well versed with the law of the land and can help you complete legal formalities without any hassle. You get a good property deal as per your preferences when you contact an experienced property consultant.

You can search a property or find a buyer without a property consultant as well. But for this you have to leave all your work aside and spend your time, money and energy searching a property/buyer. Eventually, you may strike a bad deal because you don’t have the knowledge, experience and skills of a property consultant. Real estate consulting companies make your property purchase/selling as stress-free and simple as online shopping. Most importantly you end up saving/earning a lot of money. But if you go on your own, you may lose several good property deals which only property consultants know.

So it is always recommended to take help of a real estate consultant to buy/sell your property. Rely on a local property consultant to get good property options in your city.

Many companies help people in finding the best property within their budget. You can easily connect with them through their website. When you connect with any of these companies, they take care of everything from property search to possession and legal formalities. They take full responsibility for a property deal and make sure that you don’t fall a prey to fraudulent activities.

People migrate to cities for jobs and education and finally settle there by owning a home. Metro cities are hot destinations for higher education and employment. These cities provide ideal living conditions and thus attract millions of people every year. Real estate developers are working hard to accommodate the growing population of the cities. They need property consultants to develop customized and attractive real estate projects.