Monday 1 May 2017

Real Estate Regulatory Authority (RERA) Bill



Real Estate Regulatory Authority (RERA) Bill 
To regulate the real estate sector, the government has come up with the idea of Real Estate Regulatory Authority (RERA) Bill which is expected to help buyers. RERA is supposed to protect the interest of the homebuyer and ensure timely delivery of projects. Real Estate Regulatory Authority (RERA) Bill was introduced in 2013 and finally the bill got approved in March last year.
Although RERA is a central law, its implementation will depend on state governments, as real estate is a state subject. Maharashtra government had approved the Real Estate (Regulation and Development) Act (RERA) and it will come into effect from today.
Here are few ways in which buyers are likely to be benefited by the RERA Act:
  • Under RERA, each state will have to setup regulatory bodies as appellate tribunals to solve the disputes between buyer and builder within 120 days.
  • Developer will have to put 70% of the money collected from a buyer in a separate account to meet the construction cost of the project.
  • RERA will make it mandatory for all commercial and residential real estate projects where the land is over 500 sq. mt. or eight apartments will have to register with the regulator before launching a project.
  • RERA also seeks to impose strict regulations on the promoter and ensure that construction is completed on time.
  • Carpet area has been clearly defined in the bill to include usable spaces like kitchen and toilets imparting clarity which was not the case earlier.
  • A developer’s liability to repair structural defects has been increased to 5 years from the earlier 2 years.
  • The buyer will pay only for the carpet area (area within walls). The builder can’t charge for the super built-up area, as is the practice at present.
  • Developers will be able to sell projects only after the necessary clearances. Under RERA, builders and agents will have to register themselves with the regulator and get all projects with more than eight apartments registered before launch.
  • To enable informed decisions by buyers, Real Estate Regulatory Authorities will ensure publication on their websites information relating to profile and track record of promoters, details of litigations, advertisement and prospectus issued about the project, details of apartments, plots and garages, registered agents and consultants, development plan, financial details of the promoters, status of approvals and projects etc.
How RERA will benefit builders
The builders will also benefit from the RERA, as it proposes to impose penalty on allottee for not paying dues on time. Also, the builder will have the opportunity to approach the regulator in case there is any issue with the buyer.
But, builders believe that the bill was heavily stacked against them. The bill provides for penalty up to 10 per cent of the total project cost or even imprisonment, if builders do not honour their commitment or fail to register themselves with the regulator.
How Maharashtra worked towards RERA implementation
The Government of Maharashtra had released a draft version of rules in December, after which state government had sought suggestions and objections from various stakeholders. After seeking out all the suggestions and objections which the state government received, the final rules were approved and will come into effect from May 1, 2017.
Anti-discriminatory clause
After getting piles of complaints from buyers about builders denying selling flats due to buyers’ religion, marital status and dietary preferences, Maharashtra Government also incorporated an anti-discriminatory clause under RERA. Also, the Maharashtra government added news rules under RERA such as parking spaces, which can now be sold by builders, to regulate these sales. State government has mandated that builders should disclose the sales of these parking spaces. Prevailing rules grant co-operative housing societies to distribute parking spaces among its members. 
 Few important points
1.  Society to formed once 51% of the flats booked even if the project is Under construction. This I feel will have a greater impact on Developers as there will be 2 Authorities checking on you ie. RERA and the CHS.

3. Plans and layouts can be changed only with the permission from 2/3rd buyers.

4. To update the project details in 3 months but it was suggested to do it asap.

5. If the project is being done phase wise and if in the 1st phase we are not providing common amenities like Club House etc.then we cannot put ads and make brochures showing common amenities.

7. At the time of registration they are asking details of past 5 years projects done and even what was the possession date promised and when was possession given.

8. Details of FSI proposed and approved.

9. Project cost estimation where in we have to bifurcate the Land Cost and the Construction cost. I feel this will make public how much is a Developers profit.

10. Estimated figures given can be changed. But there is lot of information which cannot be changed. So have to be careful will putting information.

11.  Ongoing projects have window of 3 months to register but was suggested to do it asap to avoid last moment delays.

14. Everything will be online (may take a year) so no need to go to RERA office except for complaints hearings.

Thursday 23 March 2017




Government has taken off the cap on political 

contribution

Section 182 of the Companies act, 2013 which has been notified with effect from 12th September 2013 provides for prohibitions and restrictions regarding political contributions.
The board of directors have to approve the contribution to be made through a resolution.
 Salient features of this section are given below:
1) All companies except Government companies and companies in existence for less than 3 years are covered by this section;
2) The maximum amount that a company can contribute to a political party(ies) in year shall not exceed 7.5% of its average net profits during the three preceding financial years;
3) Before making the contribution, the Board should approve of the same by way of resolution passed at its Board meeting;
4) Subscription, donation or payment made to a person who is carrying on such activity which affects public support for a political party shall also be deemed to a contribution to a political party;
5) Expenditure incurred directly or indirectly by a company on a publication, souvenir, journal, pamphlet for or on behalf of a political party shall also be construed as making a contribution to a political party;
6) Every company should disclose in its profit and loss account any amount contributed to a political party in any financial party, giving the particulars of the total amount contributed and also name of the political party;
7) Political party means a party registered under section 29A of the Representation of People’s Act, 1951
Ministry of Corporate Affairs has issued a clarification vide its circular no. 19/2013 dated 10/12/2013 that :-
1) where companies make contribution to “Electoral Trust companies” rather than directly to political parties then they need not disclose separately the amounts paid to each Electoral Trust company. It would be sufficient if a consolidated figure is mentioned in the accounts as paid to Electoral Trust Company;
2) Companies making contribution directly to a Political Party will be required to make the disclosures as required by section 182(3) of the Act;
3) Electoral Trust Companies in turn should make disclosures regarding contributions made by them to political parties as required under section 182(3).

Now,Government has passed a money bill in Lok Sabha on wed(22/03/2017) taking  off 

the cap on political contribution. This effectively means that the parliament has passed 

the bill as Rajya Sabha does not have any power to reject a money bill.

Companies   will also be allowed to   keep the names of political parties confidential 

in their accounts..The amount of donation, however still needs to be disclosed

Object of the bill:  


curb on unaccounted flow of funds into political system and encouragement of 

non cash  funding to increase and curb on anonymous donation !!!!

Thursday 16 March 2017



WAKE UP CONSUMERS

Private Sector Banks (PSB’s) have been robbing customers in broad daylight and despite persistent complaints the PSB’s arrogant statements clearly imply that they are going to continue doing the same.
1.       The Reserve Bank of India (RBI) regulations are very weak, unfair and inadequate to address this issue. RBI has miserably failed to protect the customers from the continuous onslaught of arbitrary charges from these banks.

2.       Miss-selling is rampantly practiced by PSB’s. The “free” services offered are charged for after a specific time period, which is usually stipulated in such a manner that even an ordinary literate individual is not able to adequately ascertain as to where and how these stipulations were stated.

3.       How come banks are unilaterally allowed to deduct money from our account? Although it is clearly stated in almost every bank document that the bank reserves such a right to deduction of charges,such practices should be curtailed. Since a consumer gives his consent for deductions at the time of signing any document pertaining to the bank, ethically this one-time consent cannot be upheld for every rampant deduction. The issue worsens when these charges, fines and penalties increase every year without the knowledge of the customers and as usual RBI has not corrected this malpractice.

4.       Banks charge consumers for availing debit cards and credit cards. Banks charge vendors for machine usage to accept these debit and credit cards, which the vendors pass on to the same consumers. Ultimately, the consumer bears the transactional cost for availing one service (i.e., plastic money) twice. The RBI, pushing its efforts to reduce double taxation on incomes and indirect taxes, has never acknowledged this issue of double transactional cost.

5.       Satisfying an existing liability is a simple right of every consumer which should not attract any transactional cost. However, pre-payment of loan attracts heavy charges and this practice has made its way into mainstream banking to the point that it is now unilaterally accepted everywhere. Till date RBI has not issued any clarification on this.

6.       PSB’s, despite functioning on a central system to provide ‘ease of access’ to consumers, still use the term ‘Home Branch’ to deduct charges for any transactions initiated or conducted in other branches.

7.       Timely supervision and warning is never given by RBI leading to many co-operative banks going down. Co-operative banks are declared insolvent and non-functional only after its assets are eroded to the point that all the consumers have lost their money. Although technically and legally sound, it defeats the core jurisprudence, i.e., saving consumers money. RBI has still not acted upon this draconian law.
PSB’s used to charge customers for the aforementioned transactions and practices to cover for their overheads. However, the advent of technology has reduced these overheads but the charges remain. The RBI can be expected to require the banks to declare income from such arbitrary deductions so as to understand the volume and quantum of these funds that are an overhead transactional cost for every citizen.

Consumers need to wake up and force the banking authorities hand to acknowledge and address these issues. A digital India cannot mean accepting the repression and autocracy of the banking sector.

Thursday 19 January 2017

              

            Feud between Ratan Tata and Cyrus Mistry

Ratan Tata, patriarch of one of the India's most influential families ,has taken over a interim 

Chairman of tata sons after salt -to-software conglomerate's board ousted Cyrus Mistry ,who 

sought to shake up the firm's management.

On 12th Jan,2017, Mr N Chandrasekhran MD and CEO of TCS was appointed as   Executive 

Chairman of Tata Sons.TCS contributes 56% of the Tata groups's combined market 

capitalisation

Tata Sons
Tata Sons is the promoter of the major operating Tata companies and holds significant shareholdings in these companies. Tata companies are commonly referred to as the Tata group and the Chairman of Tata Sons as Chairman of the Tata group.
About 66 percent of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. i.e ( Tata Trusts )The largest of these trusts are the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, which were created by the families of the sons of Jamsetji Tata, the Founder.(allied trusts )

Areas of business

The company's principal activities are:
·         To invest in operating companies to support their growth
·         To promote and invest in new businesses
·         To maintain its shareholding in major operating companies
Tata Business Excellence Group, a division of Tata Sons, assists Tata companies in their business excellence initiatives through the Tata Business Excellence Model, Management of Business Ethics and Tata Code of Conduct.
Tata Sons is also the owner of the Tata name and several Tata trademarks, which are registered in India and around the world. These are used by various Tata companies under a licence from Tata Sons as part of their corporate name and/or in relation to their products and services.
The terms of use of the group mark and logo by Tata companies are governed by the Brand Equity and Business Promotion Agreement, entered into between Tata Sons and Tata companies.

Board of directors

·         Ratan N Tata, Interim Chairman

Tata Sons is the principal investment holding company and promoter of Tata companies. Sixty-six percent of the equity share capital of Tata Sons is held by philanthropic trusts, which support education, health, livelihood generation and art and culture. In 2015-16, the revenue of Tata companies, taken together, was $103.51 billion. These companies collectively employ over 660,000 people.
There are 29 publicly-listed Tata enterprises with a combined market capitalisation of about $116.41 billion (as on March 31, 2016). Tata companies with significant scale include Tata Steel, Tata Motors, Tata Consultancy Services, Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and Indian Hotels.
Tata sons may beef up control of group firms. Tata group promoter holding pattern:
TCS  :                         73.34 %
Tata power:               33.02 %
Tata com:                  48.88%
Tata MotorsS:           33.00%
Tata Steel:                 31.37%
Tata Chemicals:       30.80%
Tata G Beverages   34.41%
Titan Company:       53.06%
Voltas                       30.31%

to be contd:

  


     

   













 




Monday 2 January 2017

2016 -Changes in legal and regulatory environment

1)Rotation of auditors mandatory for certain class of listed and un-listed companies-w.e.f 1/04/2017

2)Indian accounting standards (IND-AS)w.e.f 1/04/2017,which will allow companies to report standalone financial results instead of consolidated results.


3)The Insolvency and Bankruptcy Code, 2016 (IBC) is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy,which can unlock NPA worth Rs 25,000/- crores in next 5 years .


4)Real Estate Regulation and Development Act 2016

  regulatory authorities to be created by the states and union territories within a year of the act coming in force and registration of every real estate project has been made mandatory.

5)  The Benami Transactions (Prohibition) Amendment Act, 2016 is an amendment of the older Benami Transactions (Prohibition) Act 1988.  

The Act defines a benami transaction as a transaction where a property is held by or transferred to a person, but has been provided for or paid by another person. The Bill amends this definition to add other transactions which qualify as benami, such as property transactions where: (i) the transaction is made in a fictitious name, (ii) the owner is not aware of denies knowledge of the ownership of the property, or (iii) the person providing the consideration for the property is not traceable.

6) Revision of tax treaties :

with Cyprus to Mauritius  thus effecting the door on tax treaty abuse..

7)Employees’ State Insurance (ESI) Act(amendment ) 

The government increased  the number of people eligible for Employees’ State Insurance (ESI), which provides medical care to industrial workers and their dependents, by raising the salary cap of beneficiaries to Rs.21,000 per month from Rs.15,000.

This means all industrial workers drawing a salary of up to Rs.21,000 will be eligible for health care—from primary to tertiary—at more than 1,500 clinics and hospitals run by the Employees’ State Insurance Corporation (ESIC) directly or indirectly.

8)The Criminal law amendment act 2013  

  introduced in the light of the protests in Delhi gang rape case.It provides for amendement to IPC,Evidence Act and Cr PC