The company raised $170 million in a pre-IPO placement. HDFC Capital, IIFL Group, and Jagdish Master’s family office all participated in the deal, according to the bankers. The deal was advised exclusively by Axis Capital.

In the last ten years, Keystone will be the fourth real estate company to go public. Macrotech Developers (Lodha Group) and Shriram Properties both had initial public offerings last year, raising a total of ₹2,500 crore and ₹600 crore, respectively. Another real estate firm planning to go public this year is Puranik Builders. In November of last year, the business gained Sebi permission.

In FY22, the Rustomjee Group, which operates in Mumbai’s Western and Central suburbs, reported sales of ₹2,680 crore. Across the Mumbai Metropolitan Region, the group has a development portfolio of 20 million square feet of completed projects, 9.2 million square feet of ongoing development, and 16.4 million square feet of planned development.

Due to streamlining of supply, low financing rates, affordability, demand stimulation initiatives by some states, and a clear shift in buyer attitude in favour of physical assets, the Indian real estate sector has seen a significant recovery.

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Alok Gupta is the President of the prestigious The Estate Agents Association of India, Central Zone One. He can be reached at alok@himland.in. Views expressed are personal.

I have been writing on this act, ever since the act’s draft was thrown open to the public for suggestions. On 2^nd June 2021, the Union Cabinet has finally approved the Act and I am glad that most of my suggestions have been incorporated in the final law before giving it the name and the shape of the Model Tenancy Act, 2021 ( MTA 2021 ).

I have always emphasised the need for a proper agreement between the landlord and the tenant. I am glad that MTA 2021 too has given due importance to the written agreement between the parties. Most of the time, disputes arise majorly due to two reasons. One, the agreement between the parties is not well-drafted and a lot of issues are left to the ‘understanding’ of the parties involved. Two, the agreement is not adhered to and later, one of the parties starts asking the other party to be ‘practical’ or ‘considerate’. Is this the right way of tackling any issue lawfully? Certainly not. The parties concerned should spend time on drafting the agreement between them and then learn to adhere to it. It would be easier for the parties concerned to adhere to the agreement if they enter into it after giving a thought to each and every clause of the agreement considering all the aspects of renting the property and the probable causes of conflicts later.

One of the major fears I had raised was about not getting the property back by the landlords whenever they wanted it. The current law seems to have taken care of the same quite a bit. Most of the time, the owners, popularly known as the ‘landlords’ even if they own just a small apartment in a big society, do not rent out their properties for the fear of not getting them back. Can there be a situation worse than a person not getting his house, which he bought out of his hard-earned money, back from the tenant when he needs it? The law has no business to sympathise with any such forceful occupier of the house. The section 23 of MTA 2021 does define a heavy penalty i.e. twice the rent for first two months and four times the rent for the subsequent months of such forceful occupation by the tenants but, refrains the owners from disconnecting the essential services such as the electricity and the water supply to such tenants. Although MTA 2021, through its Sections from 21 to 25, speaks amply about evicting such tenants yet it restricts the landlords to take any forceful action himself. In my opinion, when the owners are not spared by such service providers on delaying their payments to them, why should then the tenants get such an immunity.

Today, those owners who are investors are not even able to recover the interest cost on the capital they have invested while those owners who have rented out their apartments out of some compulsion, are just able to recover the expenses of maintaining their properties. An owner gets in hand less than half of the rent after deducting the income tax, society charges, property tax and other incidental expenses such as brokerage, stamp duty and registration fees etc. leaving aside the interest cost on the capital deployed.

SUGGESTED REVISIONS IN THE ACT

All the commercial terms of such transactions should be market-driven. Security deposit, advance rent, agreement period, hike in rent every year should be allowed to be based on the demand and supply and as agreed between the parties. The law should be invoked only when and where the agreements are incomplete and have omitted to cover the points of dispute between the two agreeing parties.

The law to be enforced should factor in the type of properties to be rented out. Whether residential, commercial, industrial, land or any other. Currently, except for a very few terms, there are no specific terms for residential and commercial properties. Similarly, the law as of now doesn’t distinguish between an individual tenant, a group of tenants and a company tenant. The Stamp Duties charged are the same on all kinds of Leave and License agreements.

Security Deposit. Section 11 of the act restricts the Security Deposit not to exceed two months’ rent and six months’ rent for residential and commercial premises respectively. It is to be understood as to why such a deposit is collected from the tenants. Most of the time tenants vacate the premises and exit the agreement abruptly either out of some compulsion such as due to their current poor economic health or for a better deal or due to the shifting of their base. In such a situation, the owner is left with no option but to adjust his dues such as the unpaid rents, unpaid TDS, damage caused to the property etc. and other payables of the tenants such as the electricity charges, telephone or data charges, unpaid dues of some other service providers like the maids, milkman etc. from the deposit. If the deposit collected is capped at two months of the rent, it would be too little for the owner to cover his losses. Owing to the legal hassle and due to the amount of court fees and legal expenses being more than the amount recoverable, the landlords are forced to forego their dues. The law may hold the tenant liable to pay all such dues but, how and when the same would be available to the owners remains a question.

Further, capping the security deposit may sometimes be counterproductive for the tenants too. Quite a few times, mostly when a company rents an apartment for its employees, the tenant prefers to give more deposit to negotiate for a lower rent. This is because the deposit being refundable, is paid by the employer while the rent is borne by the employee. But, if the security deposit is capped, the landlord will have no option but to be rigid on the rent.

Penalty for not vacating the premises. Although the act envisages a speedy adjudication yet the owner, if he so desires, be allowed to take possession of his premises immediately on expiry ( or earlier determination ) of the agreement whether peacefully or forcefully. Rest others are commercial penalties, which can be levied and recovered from the outgoing tenant later.

Cost of entering into the agreement. The law seems to be silent on this issue. The prime responsibility of registering the agreement is that of the owner but, the cost of the same should be borne by the tenants.

Minimum rent. On average, an owner gets a net return of around 3% through rent per annum on his capital invested in buying the property in any urban area. This means, had the same amount been invested in the bank Fixed Deposits, he would have got around 7% and if the same amount had been invested in any mutual fund, the return would have been over 9% per annum. This means that investment in properties fetches the lowest return. There is no significant growth of the capital value too. Why then would anyone invest in properties? They would not. This is the prime reason for the poor state of the Real Estate industry these days, the investors are not entering into it. Around two decades ago, the recurring return was over 10% and the appreciation of the property was over 30% per annum. The law should fix the minimum rent an owner should get. It should be based on the current market value of the property as per the circle rate or the ready reckoner rate. This will encourage more investors to come in thereby throwing open more stocks to the prospective tenants. The tenants would also not hesitate in paying the rent, especially when they would have a wider range of properties to choose from.

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Real estate company Sunteck Realty has announced the purchase of a 50-acre piece of land for a residential project in Vasind, Mumbai. Sunteck Realty said that the project would generate revenue of Rs 1,250 crore in the next four to five years.

However, the company has not said at what price it is buying the 50 acres. Kamal Khaitan, chairman and managing director of Sunteck Realty, said, “This is our second strategic acquisition in an era of epidemic, which reflects our strategy to strengthen our brand presence.”

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In order to accurately map land areas across the district, the Gurugram Metropolitan Development Authority (GMDA) has launched a survey using Geographic Information System (GIS) technology.

The method of land demarcation will be modernised. The decision was made after officers of GMDA were informed of illegal land invasions, which they were not aware of.

Marking of the monuments on every 500 metres will be part of the process. With the GIS-enabled technology, all encroachments and land scams will be determined by the authorities and elected officials.

“This will help us keep an eye on the land of GMDA and eliminates intrusions. It will provide an insight into the ways to conduct an anti-intrusion campaign against invasive individuals. So far, we’ve done it manually, but now the information would be technology based,” said GMDA, CEO, V.S Kundu.

The official said the survey began a few weeks ago and is expected to be finished shortly. Officials from GMDA said land demarcation would help them understand district-wide revenue records.

In addition to the land survey, the process also tends to lead to an online district record of GMDA land. The official said the main objective will be timely action against the invaders and the end of any obstacles that could prevent invaders from freeing land that can only be done with precise land registrations.

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More than a decade ago, this prime sea-side plot of the Charni Road in southern Mumbai was to build the country’s tallest 125 storey luxury hotel. Some years later, a plan was revised and two 60-story residential towers were built on the 2.2-acre land. However, all of the plans have been void.

The land would be auctioned this 21 August after Rs 439 crore loan from the IFCI and the Central Bank of India is defaulted by the builder, Marine Drive Hospitality, part of the DB Realty Group.

The Edelweiss Asset Reconstruction Company (EARC) has blocked the property and set Rs 485 crore reserve prices.

On the 21st August, it will be sold “as is” and “as planned” based on dues, totalling Rs 473 Crore, with interest, charges and expenses, for the whole. Last November, after “the borrowers/guarantors failed to pay the amount,” the authorized EARC officer symbolically took possession of the estate.

Roughly three dozen tenants residing on the estate that had been rehabilitated by the DB on the same land have protested to the auction.

These tenants released a public notice opposing the auction and stated to have granted a “specific developer’s rehabilitation consent.” ‘Under such a situation, no other person or party can conduct the redevelopment,’ they added.

In 2011, BMC gave a stop-work notice to the hotel project stating that Rs 200 crore was not paid in arrears. It imposed a premium for the developer’s demand for construction concessions. DB eventually shelved the hotel plans on financial viability and began searching for a partner for the construction of the property for a residential project.

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India is considering a relief package for Goods and Services Tax (GST) to fight Covid-19’s effect and help support the economy, said people with knowledge of the issue. The package under consideration could include a six-month suspension of GST payments for the worst-hit sectors such as restaurants, aviation and hospitality and a lower rate for the real estate sector.

Other proposals involve a move to a cash-based principle by levying tax from the existing invoice-based system by offering GST relief on a transaction on which payment due to the lockdown is not obtained by considering them as bad debts.

These steps are supposed to reduce the liquidity burden on firms struggling for funds, the people cited above said. The GST Council, which is the apex decision-making entity for the tax, should make a final judgment on the proposals.

While there has been a demand for full GST exemption, the government is veering back to the view that it would work best to suspend the tax, the official said. Exempting a sector from the tax will involve cutting the credit chain, contributing to further downstream issues.

A cash-based system would entail companies paying GST when they receive the money and not when the invoice is raised, making sure they don’t have to spend the tax out of their wallet and get pressured on working capital. It is particularly important for services, where reimbursement after bills are raised, is received with a lag.

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A construction company, which planned to take care of its workers, support staff and employees during the Covid-19 pandemic and was unable to do so because of the pending Income Tax (I-T) claim for Rs 2.91 crore, frozen bank accounts and the attachment of its debtors, received a favourable order from the Income Tax Appellate Tribunal (ITAT).

The ITAT’s Mumbai Bench intervened by considering the issue as urgent, as government advisories had called on employers during the pandemic to take care of their workforce. It also acknowledged that the builder had paid their tax dues for the financial year 2009-10 and the amount of Rs 2.91 crore related to interest and penalty outstanding.

However, Pandhes Infracon’s business activities, the construction firm, also had come to a standstill and it could not meet its obligations towards its employees.

The ITAT bench granted a stay of tax dues and suspension of the garnishee orders imposed by the I-T authorities on the company’s bankers and debtors in its first hearing, through video conferencing.

However, this favourable judgment given on April 24 by ITAT president PP Bhatt and vice president Pramod Kumar comes with conditions attached.

The funds received from a stay of the I-T claim, the unfreezing of bank accounts and the removal of garnishee orders on debtors are first to be used to pay their labourers and employees the unpaid and current wages and salaries.

The builder also pointed out that the company has to make a partly constructed building accessible to Covid-19 patients to provide quarantine services, as per the Collector’s order.

The ITAT bench claimed that to construct the quarantine facilities, the amount available after payment of wages and salaries should be used. The remainder will be used for the benefit of its construction business after fulfilling all of those obligations.

For the 25 years, Pandhes Infracon has been active in the construction business and received many contracts from government departments under the affordable housing scheme of the Prime Minister.

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A representative of homebuyers in Greater Noida, the Noida Extension Flat Owners Welfare Association (NEFOWA) urged builders not to increase maintenance charges in the housing society during the lockdown.

When a few developers in the area increased maintenance prices, the Association wrote to the Confederation of Real Estate Developers Association of India.

Eros Group, which operates a housing society named Eros Sampoornam, has released a notice for raising maintenance fees from Rs 1.95 per sq ft to Rs 2.5 per sq ft.

“We got to know that many other builders have been attempting to increase charges during the lockdown. This can be prevented at this period because most of us are indoors. We will protest from the balconies and if the rise in charges is not rolled back, we can protest on the ground, pursuing social distance rules,” NEFOWA’s Dipanker said.

Eros group, in a circular to the residents, said that “it has become necessary for the maintenance agency to raise maintenance fees and the same has been revised with an increase of 8% compounded annually since 2017 due to minimum entitlement as per maintenance contract.”

“Over the last three years, the maintenance charges have never been updated, keeping in the interest of the residents and giving them ample time to settle in the society. The circular specifying revision to maintenance costs at R 2.50 per sqft. + GST with effect from 01.04.2020 was shared with tenants in January 2020 and is not related or linked to the lockdown,” a spokesperson for the Eros group said.

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The central government is seeking to take a leaf out of the drone survey carried out by the state government to map housing in rural areas and replicate it across the country.

Last year, the first survey of state property using Unmanned Aerial Vehicles (UAVs) was conducted at Sonori village in Pune District to map spatial details.

The aim was to offer property titles in about 40,000 villages to residential and other properties and to enable residents to obtain better liquidity on those assets.

“We began the survey in Pune and then planned to replicate it all over the state. We were going to establish teams to do the same, but couldn’t do it because of the COVID-19 pandemic. The work will begin after the monsoon,” Settlement Commissioner S Chockolingam said.

He said the program would be carried out under the Panchayati raj ministry’s SVAMITVA scheme to provide an integrated real estate validation solution for rural India. Inhabitant land demarcation in rural areas will be achieved using drone surveying technologies with joint initiatives from the Panchayati raj ministry, state Panchayati raj department, state revenue department, and the Survey of India (SOI).

The SOI has developed basic operating procedures to collect extremely high-resolution aerial images and to use drones to produce extremely wide scale maps at a scale of 1,500/1,000. The mapping of rural households in collaboration with different state governments viz Maharashtra, Haryana, Karnataka, Madhya Pradesh etc. had been conducted by SOI over the past one-two years mainly for use as revenue maps to grant ownership rights.

Based on these maps or info, the government of Maharashtra and the Haryana government provided property cards to the citizens in Sonari village and SIRSI village. The high-resolution and precise image-based maps also enabled the creation of the most reliable database of real estate holdings in such areas with no records of legacy revenue, officials said.

The pilot phase will extend to around one lakh villages comprising six states (Haryana, Karnataka, Madhya Pradesh, Maharashtra, Uttar Pradesh and Uttarakhand). At the time of signing the MoU with Survey of India, the respective state governments will finalize the list of villages.

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The Delhi government released an order asking all landlords not to ask rent for one month from workers, including migrants, who have been affected by the lockdown caused by a coronavirus. Any landlord identified to be in violation of the order is charged under the Disaster Management Act 2005.

The order issued on April 22 specifies that action should also be taken if landlords compelled students to pay the rent immediately or threatened to evict them. The government also urged workers including migrant workers and students who are coerced to pay house rent by their landlord can call 100.

A large number of citizens stay in the city in rented accommodations. The tenant population is mainly made up of workers and migrant workers and students living in nearly every area of town. The compulsory lockdown of coronavirus has generated tremendous financial hardship for employees, migrant workers and students in addition to citizens involved in various economic activities leading to the closing of business establishments, trading centres, construction activities etc.

The landlords who claim rent from the tenants will add to their distress and may inspire them to move out which is adverse to the lockdown measures.

The chief secretary has ordered all district magistrates to conduct awareness campaigns on the problem especially in areas with a higher density of workers, migrant workers and students to advice affected persons to file complaints in the police control room by calling 100 against the erring landlords.

The chief secretary asked police deputy commissioners to send weekly reports on these complaints lodged by tenants and action taken on the complaints to the DMs on April 27 evening.

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