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5 factors that should decide your home purchase

A lack of choice or awareness makes people buy the best homes in bad localities. Seek the right information about your home first.
by Reyna Mathur

If you are on the lookout for a new home, first tell yourself this: what is on the outside of the home is sometimes more important than what is on the inside.

For, you can always renovate your home and set that leaking ceiling right with expert guidance, but how can you change an unfriendly neighbourhood, or the lack of a grocery store in the vicinity, or your child’s school being 5 kilometres away from home? Hence, it is important to take into account certain factors that should influence your decision to buy or rent a house in a certain locality. These are:

The house itself. You can sense the vibe of a new place the moment you step into the house. The house itself will welcome or repel you, and you may not always be able to explain why. However, go with your instincts – does the house feel right on entering it, or does it have a cold vibe that disconnects with you? Don’t purchase a house just because the price fits your pocket.

Also, examine the house thoroughly when you take a tour. All faucets, electrical appliances, plumbing utilities, etc should be in good condition before you take possession of the house. If you are being short-changed on the maintenance of the house before you move in, you will have to be firm about getting the situation rectified. Else, seek another house that will give you value for the price.

The neighbours. It is not enough to merely fall in love with a house in a certain building, even the neighbourhood should be a good one. Some building societies actively discourage single people or persons of a certain religion from buying or leasing flats, so even if you want a house there and have the money to purchase it, you will not be allowed to (if you fall under these categories). At other times, immediate neighbours are not very welcoming towards new families or couples. Though this cannot be a reason for you to not opt for a dream house, you will have to work extra hard to change your neighbours attitude towards you. If you are the sensitive sort, unfriendly neighbours will cause you unnecessary stress, so examine your own feelings on the subject before you proceed.

The locality. Take a walking tour of the locality where your dream house is located. All grocery shops, the milkman, paper delivery agency, the dhobi and even vegetable vendors should be within walking distance from your house. A chemist shop in the vicinity is an added bonus.

If you are married and have children, find out where the nearest playschool, secondary school and college is. Ideally, your child should be able to walk to school daily instead of relying on transport. If the school or tuition classes are far away, see if the roads are safe for your child to ride a bicycle or scooter on.

Entertainment spaces. People don’t just come home from work and sit in front of their TV sets, though a large number of people actually do that. However, it may be because Mumbai does not have too many open spaces or gardens where people can hang out in for recreation. Explore the area and be on the lookout for open grounds and gardens where you and your family can unwind after a hard day’s work. Alternately, look for the nearest shopping mall to spend an evening in watching a movie or just chilling with the family. Besides this, there should be a public library, a DVD renting library, a good restaurant and spaces for you to hang out with people our own age, such as a book club or cooking class. These spaces are most important, especially if your house itself is quite small – you might not enjoy being cooped up at home always.

Well maintained emergency utilities. This is hardly a consideration for many people, but in Mumbai, where building collapses and fires are imminent; there have been many cases where fire brigade tenders have been unable to enter narrow access lanes to provide assistance in a disaster. When you make a tour of the property, walk around the building to see if the society has ramps for fire brigade trucks, a service staircase in good condition, a well maintained front access road, and a functioning fire lift and apparatus in the building. Examine if the building lifts are in good condition. The absence of any of these amenities should instantly raise a red flag in your mind.

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Works your building society must carry out

There is no excuse to not carry out regular repair works – insist that your building society carries them out.
by Dipen Tewari

The building you stay in collects monthly dues from you in lieu of maintenance charges, lift charges, parking fees, open space maintenance, amenity maintenance etc. This money collected goes into the society’s coffers, and is to be used in times of repair work and painting and plastering jobs.

However, many buildings default on carrying out these repair works. As such, they do not have the option of not conducting safety and structural audits (especially for old buildings) and getting the premises repaired every five years, since they are legally mandated to do so. Many buildings even fail to furnish receipts of the collected money, and do not even hold obligatory general body meetings to discuss the need to increase charges and other matters of common interest.

Apart from these, building society managing committees also have other important obligations:

Intervene in disputes. If a house is affected by leakage from the house above, and the second party refuses to carry out repairs and painting to provide relief to the first, the managing committee must intervene in the matter. They can call for a special meeting for members to air their grievances face to face, and ask the offending parties to rectify the situation. The committee performs an important arbitrator’s role in this way.

Stop unauthorised repairs. Some members may decide to knock off important construction elements like columns in their houses. This is the number one reason for building collapses. As such, members are required to inform the committee of the nature and extent of repair work they are about to undertake, and the committee is legally bound to object if the proposed work will endanger the overall structure.

Conduct regular repairs. As buildings age and face wear and tear, it is necessary to optimise their overall life by carrying out periodic repairs. These may be as simple as re-plastering and repainting the external walls, or as tedious as replacing crumbling water lines and sewage systems for the entire building. The building is duty-bound to conduct necessary repairs, spanning from rebuilding broken compound walls to replacing old tube lights in the premises, to getting the water tanks thoroughly cleaned at least once a year.

Initiate action against defaulters. Some members of the society regularly default on their monthly dues to the building, for various reasons. The committee is fully empowered to initiate proceedings against such errant members if they do not respond to written intimations or pay up the dues within 30 days of being informed to do so. The committee can approach the Registrar of Societies for redressal in the matter.

Maintain essential services for the building. It is the managing committee’s job to ensure that water and electricity are being provided to the society without interruption, that garbage collectors go to all the flats in the building and dispose off the trash safely, lifts are running smoothly, the swimming pools are cleaned periodically, that gardens and potted plants in the premises are being trimmed regularly, and that no stagnant water is collected in the building’s open spaces, among other duties. The committee must maintain a log book of all service staff such as the building watchman, garbage collectors, plumbers, electricians, construction and repair staff, etc.

Cannot take decisions without members’ consent. The managing committee cannot take financial and other decisions for the building premises on behalf of the members and without consulting with them via general body meetings. Similarly, the managing committee must change every year via a fair election process. Some societies levy arbitrary charges for parking, or increase maintenance charges without adequate reason or notice. Members can refuse to comply with any diktats that have not been arrived at after proper consultation with all residents.

(Pictures courtesy www.indiamart.com. Image is used for representational purpose only)

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Houses get smaller in Mumbai

Unable to sell large apartments in a sluggish market, developers are shrinking the sizes of houses while not reducing costs.
by The Editors | editor@themetrognome.in

Since nobody is buying houses in Mumbai and other cities, developers have hit upon a better idea: sell smaller homes. But don’t go running away with the idea that these smaller homes are more affordable. Their per square foot area rate is still unchanged.

As per JLL India Research’s latest report ‘Is Indian Real Estate Heading Towards A Tectonic Shift?’, ‘among the major trends is how developers have been decreasing apartment sizes to suit affordability of buyers.

‘Builders are exploring innovative ways to make residential housing across major cities more appealing to potential buyers at a time when it is increasingly becoming difficult to sell expensive apartments. Unable to sell expensive homes in a sluggish market, builders across India are making smaller apartments without lowering the price per square feet and compromising on the quality of product. In the last five years, average apartment sizes are falling across all major cities of India.’

The report details the Shrinking House syndrome in Mumbai thus: ‘Mumbai Metropolitan Region (MMR) – including Mumbai, Thane and Navi Mumbai – witnessed the maximum fall in apartment sizes on annualised basis, along with Bangalore, Chennai and Kolkata. Other cities also witnessed varying degree of fall in median apartment sizes.’

As per the report, Mumbai, which ‘already had smaller and compact apartment sizes compared to other cities, saw a decrease of 26.4% in the past five years.’ The report adds, ‘The dynamics of apartment sizes have a tale to tell – that developers are paying conscious attention to consumers’ requirements. The fall in average apartment sizes across all top seven cities [in India] is a clear indication that developers intend to make houses affordable for buyers by reducing average apartment size instead of reducing the capital values.

‘While property prices are not purely a product of developer’s discretion, the decision to alter apartment sizes as per the needs and spending power of buyers is definitely within their ambit.’

Read more about this trend on JLL India’s blog.

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Who is buying flats in Mumbai?

Despite developers’ many claims of ‘sold out’ projects, Mumbai’s real estate market is still in a continuing state of stagnancy.
by Reyna Mathur

Any major newspaper in Mumbai these days normally carries a full front page advertisement for yet another ‘dream housing project’ in the city limits or on its outskirts. Big or small, most real estate developers are advertising for their upcoming projects like no tomorrow, spawning theories that the city’s real estate sector is finally out of trouble.

However, experts are divided on the issue, and on-ground realities say otherwise. Despite aggressive advertising and appearances at property fairs, developers are finding it difficult to sell already built housing units, or get customer interest in new proposed projects. Each year, property prices are continuing to rise, making it virtually impossible for first-time buyers to even consider purchasing a property without the burden of large home loans.

Add to this the fact that several pockets of Mumbai – which were earlier considered a solid investment – are now simply saturated, having hit the boundary for growth. People then started considering the northern suburbs beyond Borivali, but with an overall slowdown in the industry, even these houses are not yielding the kind of returns they normally would.

A departure from earlier investment patterns

A common-sense approach to investing in houses is to select a site that promises future growth, and hence a doubling of the initial investment. Another way is to invest in under-construction houses so that payment instalments are easier on the buyer. However, cases of developers abandoning projects mid-way in the recent past have scared off potential buyers.

Another problem plaguing the real estate sector in Mumbai is the lack of implementation of planning and building norms. These cause huge hassles at a later stage, when builders seek OCs (Occupation Certificates) and CCs (Completion Certificates) which the BMC does not furnish on finding that several norms have been flouted in the construction process.

A lean period like never before

The first signs of a crash in the city’s real estate market came with the worldwide economic recession of 2008-2009, when prices crashed dramatically. However, a year later, the sector consolidated and made good on its losses, but elsewhere, inflation and rising prices made buyers and investors think twice before taking the plunge. Interest rates on home loans also started climbing post 2010, and have continued to climb since.

All of this resulted in a curious ‘more supply, less demand’ scenario for housing in Mumbai. What was expected to be a ‘drought’ period of about three years has now extended to seven years.

Even the big developers are hit

Only major names in the real estate space in Mumbai, and indeed the country, are doing somewhat good business currently. With their strong market presence, they are able to not just generate more projects but complete the ones in hand. Yet, experts say that it is becoming a tough task even for these moneyed developers to sign up for new townships – there are no huge tracts of land now available in Mumbai, and the lands that are available are caught in a maze of reservations, permissions and modified Government policies.

The major projects currently underway in Mumbai, however, seem to cater only to the wealthiest sections of society, with each square foot of built space being sold upwards of Rs 50,000 or more (depending on the area of Mumbai).

The most badly hit are the middle-level developers, who mainly rely on small redevelopment projects or single-tower projects for business, and which are currently not forthcoming. With them are hit the middle classes, who are actually in need of housing but are forced to either move out of Mumbai or spend money every year on rental accommodation – even as their eternal quest for a house in Mumbai continues!

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6 rules for renting a flat

Several people in Mumbai live in rented accommodation across the city. Handle the entire process right to make your stay comfortable.
by The Editors | editor@themetrognome.in

Living on rent in the cities is not a big deal for people any more, whether single or with families. The high price of accommodation all over the country makes it difficult for most people to purchase homes, while others may be in a particular city for a brief period for official purposes. By now, the rental ecosystem in India is clearly defined by a certain set of rules.

In the light of people planning terror strikes from rental accommodation, or inconveniencing the neighbours with loud parties every other day, building societies are a bit sceptical about allowing people to rent out homes in their premises. There are several cases of societies refusing homes to people of a certain religion or gender, or specifically to bachelors or spinsters. Many buildings turn away live-in couples and persons belonging to the entertainment industry. Societies are not legally empowered to discriminate among potential licensees, but these instances still take place regularly.

However, there are some ways in which you can make a good first impression and follow some rules to make your stay in a rented accommodation easier:

1. Get a referral if you are single. If you discover that there is a good house in a locality and building of your choice, but the society will not entertain your request because you are single, try and get a referral from a resident of that building, or somebody who knows the managing committee well. This referral will help you get your foot in the door for future negotiations. Also try and get a character certificate from your place of work, and take a copy with you when you get an interview with the society chairman and secretary.

2. Meet the managing committee members. Most people skip this crucial step. In fact, the first thing you should do once you and the flat owner decide to seal the deal is to meet the building society secretary and chairman and ask the flat owner to introduce you. Then take over and tell them what you do, how long you will be using the flat, and assure them that you will submit the registration documents as soon as the flat agreement is registered.

3. Sort out bills and payment arrangements. If your flat owner lives close by, he or she may want to collect the monthly rent in person. If not, you will have to write out a series of PDCs (Post Dated Cheques) and hand them over to the flat owner at the time of registration. Secure the flat for yourself by paying a token amount, so that the owner does not continue scouting for more candidates. Also discuss how you will settle the flat’s electricity, cable and gas bills. Note that the building maintenance and water bills are to be paid by the owner and not by you.

Agreement4. Register your flat agreement. Insist on registering your flat agreement, more for your own safety, and insist on a lock-in period of six months, under which the owner cannot evict you from the premises till six months have elapsed after the first day of your occupancy. The document must clearly state the lease period, the complete names and permanent addresses of the owner and you, the purpose to which you are leasing the flat, the monthly rent you are paying and the mandatory one-month notice applicable to both parties for vacating the premises. On the last page of the agreement should be a list of the PDCs you are giving to the owner, with details of the cheque date, name of bank, and amount.

5. Submit all your documents. Once the document is registered, you will have to undergo a compulsory police verification process. This is normally handled by the broker who is handling your transaction, or you can do it yourself by going to the area’s police station. Do not omit this step at any cost. Once the verification certificate arrives, attach a copy with a copy of the registered agreement, and a copy of your marriage certificate if you are married. Submit the whole lot to the building society and take an acknowledgement receipt.

6. Follow all building rules. Every residential locality has its own rules, and you cannot challenge them. Do not behave in a way that will inconvenience or Rulesdisturb others, and pay all utility bills on time. Further, if the society insists that you cannot throw parties, refrain from defying this rule. Additionally, participate in building society functions and get to know the neighbours well. Creating a positive impression about yourself will keep you in good stead while you are living there, and if you some day decide to buy the house for yourself.

(Pictures courtesy labor-employment-law.lawyers.com, breathingmeansmore.com.)

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