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Flats

 

Q: What is a Flat?

 

Ans: Flat is an independent unit of building for use as residence.

 

Q: What are the conditions to purchase a flat?

 

Ans: A developer of flats must register an agreement before accepting advance of deposit. Such advance, deposit shall not exceed 20% of agreed condition.

 

Q: How ownership of flat can be acquired?

 

Ans: Developer of flat is required to transfer it to the registered association, co-operative society or company of buyers of flats within the period of agreement. He should also endeavor for formation of such association, co-operative society or company within prescribed period. Registration is compulsory. A purchaser will not get ownership title to the flat without registration

 

Q: What Are Carpet Area, Built-Up Area & Super Built-Up Area?

 

Ans: Generally speaking Carpet Area is the area of the apartment/building, which does not include the area of the walls. The actual used area of an apartment/office unit/showroom etc. In simple terms, it is that area within the walls where you can actually lay a carpet. It is the super built-up area minus the thickness of the walls and the proportionate share of the common areas. Built up Area includes the area of the walls also. It also includes the carpet area, the wall thickness and the balcony. Super Built up Area includes the built up area along with the area under common spaces such as the lobby, lifts, stairs, etc. This term is therefore only applicable in the case of multi-dwelling units. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc.

 

This break up is extremely essential as builders can place anywhere from 65 per cent to 85 per cent of the super built area as carpet area. That means, if the quote is on 1,000 sq ft, the carpet area could be anywhere from just 650 sq ft to 850 sq ft. If this break up is not mentioned in the agreement, demand that the builder mention it in the sale deed.

 

Q: What is the difference between built up area, super built up area, and carpet area?

 

Ans: Carpet Area

This is the area of the apartment/building which does not include the area of the walls.

 

Built up Area

This includes the area of the walls also.

 

Super Built up Area

This includes the built up area along with the area under common spaces such as the lobby, lifts, stairs, etc.

This term is therefore only applicable in the case of multi-dwelling units.

 

Q: What is Freehold Property?

 

Ans: Freehold property is property for which ownership rights of Land is given to the purchaser for a price and he is not required to pay annual Lease Charges. Freehold properties can be registered and/or transferred in part/s, which is not possible in the case of Leasehold properties.

 

Q: What Is Leasehold Property?

 

Ans: Leasehold Property is property leased to a lessee for a stipulated period. The Lessee pays lease premium and annual lease amount as fixed by the Lessor. In these cases the Land ownership rights remain with the Lessor and a prior sale-permission is normally required if you plan to transfer the property.

 

Q: How do you inspect a property?

 

Ans: Before you buy a house, even if it looks perfect, it is wise to make sure everything is all right. You need to complete your home purchase with your eyes open as to the condition of the property and all its and systems. The purchase of a home is probably the largest single investment you will ever make.

 

You should learn as much as you can about the condition of the property and the need for any major repairs before you buy, so that you can minimize unpleasant surprises and difficulties afterwards. A close home inspection also points out the positive aspects of a home, as well as the maintenance that will be necessary to keep it in good shape. After the inspection, you will have a much clearer understanding of the property you are about to purchase.

 

You need review the condition of the home's interior plumbing and electrical systems, the roof, walls, ceilings, floors, windows and doors; the foundation, basement, and visible structure.

 

External Checks:

 

Check the life of the building. Building materials normally have a life of about 20-30 years. Reinforcement to structural supports may be required after this period has lapsed. Look for structural cracks around the foundation of the house. Proper ground slopes to carry away rainwater. Freshly painted houses may hide serious structural problems. Patches of discoloration indicate a cover up job on leaky areas. Watermarks or stains around the edges of the floor could indicate problems of water logging in the past. Watch out or poor site drainage. Homes with slopes toward the house often have more problems with water infiltration into basements. Homes on flat plates often suffer from poor site drainage, the best designs are for homes in which the water drains away in all directions

 

Internal Checks:

 

Check whether electrical circuit breakers and wires are properly matched. The service capacity of the circuit-breaker box must be large enough for the house. Check water faucets for leaks and flush all toilets to be sure of proper operation. All the electrical receptacles throughout the home need to be checked to determine whether they're wired properly. The functioning of the interior and exterior lights, ceiling fans needs to be checked too. A thorough check of all the doors and windows needs to be done to make sure they function correctly. Moreover all exterior doors should be properly sealed against weather. Above all, all locks must work properly.

 

The things you should keep in mind:

 

Check his credentials. Get a reference if possible. Speak to a few of his past customers for references on his ability and reliability. It is always better to deal with a broker that some one you know has dealt with.

 

Most agents specialize by area within a city. It helps to go to the most visible broker and one with a long track record (5-7 years). The property owners normally approach him due to his higher visibility and his longer presence in the area. This increase the chances of you are getting a good deal fast. More over his knowledge of the area will ensure that he can guide you through his knowledge of property history, the owner history, rates, problem properties etc.

 

Avoid one-man outfits. These are of ten sub-agents. It is also better to deal through a broker who has direct access to the property owner. Choose an agent who is willing to invest time & money on your search including site visits, legal due diligence and perhaps advertising on your behalf. These services can time & money savers for you. Most importantly deal through a broker you are personally most comfortable with.

 

Always clarify the level of brokerage that you are willing to pay before using his services. Normally brokers charge 2 percent of the transaction amount in a sale. But these rates are flexible depending on the amount service fee involved.

 

For Flats:

 

  1. Stamp Duty receipt or valuation that the stamp duty has been paid according to the market value of the property
  2. Income Tax Clearance Certificate u/s 230 is to be attached where required (not necessary after 1.6.2001 N.O.C. of Appropriate Authority in Form 37-I under the Income Tax Act where applicable
  3. N.O.C. under Urban Land Ceiling Act
  4. Execution by the parties in front of Sub-registrar
  5. Receipt showing proper registration fees paid.
  6. Two copies of the on specific ledger paper with specific butter paper in between pages.
  7. Document properly filed.

 

If the above mentioned documents are not available or procedure not followed at the time of registration then the Registration Authorities will keep documents pending.

 

Is it compulsory to Register Sale Agreements/ Documents of following:

 

a) Purchase from builders

Ans: Registration of agreement for sale/documents of ownership flats when ownership flats are purchased from builders, one should register such agreements with the Sub-Registrar.

 

b) Resale flats -Society not registered

Ans: In case of resale of flats in a society which is not registered, the registration would be required.

 

c) Resale in a Registered Co-op Society (Conveyance in favour of Society completed)

Ans: In case of resale of flats in a registered Co-operative Society no registration is compulsory. However, some societies do insist that such documents be registered.

 

d) Resale in a Registered Co-op Society (Conveyance not completed through administration by Society.)

Ans: It does not really matter whether conveyance has been granted to the society or not since it is only a change of membership which takes place in a society.

 

The Registrar of Co-operative Societies has issued some time back a circular to societies whereby he has stated that all documents for transfer of flats be registered.

 

Q: When a flat is gifted to a daughter what are the legal implications regarding: i) Title- and how is this established. ii) Gift tax- is it leviable and if so when?

 

Ans: If one has gifted a flat to his daughter one should have the gift deed drawn out which should be witnessed by two persons. In case of both the donor and the donee it is preferable to register the said gift deed even if the flat is in a co-operative society. Stamp duty would have to be paid on the gift deed which would be the same as in case of the sale of a flat. However, there is no gift tax applicable. The gift deed would be the title document indicating the gift to the daughter along with the share certificate if it is in a co-operative society.

 

Q: What important documents should one check for before buying any property?

 

Ans: If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc.

 

Q: Who is liable to pay Stamp Duty, the buyer or the seller?

 

Ans: The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary.

 

Q: The stamps are required to be purchased in whose name?

 

Ans: The stamps are required to be purchased in the name of any one of the executors to the Instrument.

 

Q: What is meant by the market value of the property and Whether Stamp Duty is payable on the market value of the property or on consideration as stated in the agreement?

 

Ans: Market value means the price at which a property could be bought in the open market on the date of execution of such instrument. The Stamp Duty is payable on the agreement value of the property or the market value which ever is higher.

 

Q: Which are the instruments that attract payment of Stamp Duty on?

 

Ans: The instruments like Agreement to sell, Conveyance Deed, Exchange of property, Gift Deed, Partition Deed, Power of Attorney, settlement and Deed and Transfer of lease attract Stamp Duty on market value of the property.

 

Q: Is a POA revocable?

 

Ans: Yes, POA can be either revocable or irrevocable, depending on what sort of a POA one has made.

 

Q: A flat in a Co-op Hsg. Society is to be gifted. What are the legal formalities? What about stamp duty?

 

Ans: Gift of an immovable property is considered as a 'transfer' under the provisions of the Transfer of Property Act and you have to have the transaction registered through a Gift Deed and pay stamp duty as per provisions of the relevant stamp act depending in which state the property is situated.

 

Q: Upon buying a flat from a builder in a building under construction, what are the permissions and papers that one should check with the builder, so as to ascertain the credentials of the builder?

 

Ans: When you are in the process of buying a flat from a builder in a building under construction, you need to check for the following -

  1. approved plan of the building along with the number of floors.
  2. ensure that the floor that you are buying is approved.
  3. check if the land on which the builder is building is his or he has undertaken an agreement with a landlord, if so, check the title of the land ownership with the help of an advocate.
  4. check the building byelaws as applicable in that area and ensure that the builder is building without any violation of front setback, side setbacks, height, etc.
  5. check specifications given in the agreement to sell of the sale brochure. Is he providing the same actually on the ground or not?
  6. check the reputation of the builder.
  7. ensure that Urban Land Ceiling - No Objection Certificate (NOC) (if applicable) has been obtained or not.
  8. NOC from water and electricity authorities also have to be obtained.
  9. NOC from lift authorities.

 

Q: What is Vaastu Shastra?

 

Ans: VAASTU SHASTRA is essentially the art of correct setting where by one can place himself in such a manner so as to absorb the maximum benefits of the Pancha Bhutas (The world comprises of five basic and essential elements known as SPACE, AIR, FIRE, WATER & EARTH.) as well as the magnetic field surrounding them. Proper use of the five elements creates a perfectly balanced environment which ensures good health wealth and prosperity.

 

Q: What are the basic/main Vaastu principles that need to be adhered to in a home?

 

  1. The main door should face either east or north, the height of the main door should be more than any other door in the house.
  2. There should not be anything related to water on the south-east e.g. water tank.
  3. Kitchen should be on the south-east.
  4. Drawing room should be to the east or north-east.
  5. Store room should be to the south-west.
  6. Elder's room should be to the south-west.
  7. Children's room should be to the north.
  8. The terrace should be on the north-east.
  9. The Hall should have an off-white color; bedroom should be a light blue; kitchen should be a pink and the study should be green.
  10. The cupboard should be facing the north.

 

Q: Is it necessary to obtain any permission, from the Income Tax authorities if I want to purchase any immovable property?

 

Ans: There is restriction on transfer of immovable property under Section 269 of the Income Tax Act.

 

Q: Are the benefits attached to a residential property are also available to a commercial property?

 

Ans: Such benefits are not available for commercial Properties.

 

Q: What are the formalities specified under the Indian Income Tax Law, if any, that one has to complete before or after selling any house property, commercial or residential?

 

Ans: You have to obtain Permission under section 230A of the Income Tax Act if the value of the property to be sold is more than 5 lakh.

 

Q: What are the tax implications of sale of any house property, commercial or residential?

 

Ans: You are liable to pay Tax on profit arising from sale of a house property under the head Capital Gain.

 

Q: Whether incidental charges like brokerage, registration fees, stamp duty and other charges arising out of sale of house property deductible from profit arising on sale?

 

Ans: These expenses are allowable expenses from the full value of consideration of the sale of house property.

 

Q: Is there any way by which I can claim exemption from tax on capital gain?

 

Ans: The Income Tax Act has made provision under sections 54, whereby you can claim exemption from tax on capital gains.