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Sunday, March 17, 2013

Owner or Tenant?

Are you an "Owner" or the "Kirayedar - भाडेकरू" of Special Township?

"I don't understand why property buyers pay such a huge amount to become a tenant of Blue Ridge, Nanded City Pune, Life Republic, Amanora!," said Mr. Vijay Kumbhar, RTI Activist and an authority on Special Township Act.

"Tenant? No! Mr. Kumbhar, only Amanora gives their flats on 999 years lease. So, those who pay for a flat at Amanora can be called "Lessee" - "Renter" - "Tenant". At Blue Ridge, Nanded City Pune & Life Republic - you own a flat. So you are a "owner". Not a Tenant!," I said.

"Owner of what?," Mr. Kumbhar asked.

"Owner of a flat," I said.

"Owner of a flat - means - exactly what? Owner of the cubic space inside the 4 walls, floor & roof of his flat?," Mr. Kumbhar asked.

"This is a temporary phase, Mr. Kumbhar! No developer has - yet - formed 'Co-Operative Housing Society' and has not - yet - done the conveyance deed in the name of society. So, at present, those who live in these flats - do not own the building and the plot of land on which the building is constructed. But eventually - I hope - the developers of these townships will form the Co-Operative Housing Society and will do the conveyance," I said.

"Why 'Hope'? - Aren't you sure?," Mr. Kumbhar asked.

"No. Not sure. Because, there is no clarity - all depends upon the builder's wish," I said.

"You know what? After the 97th Amendment to The Constitution of India - forming a co-operative society has become a fundamental right of every Indian citizen. And, now, co-operative society has received the status of Panchayat - local self government - Gram Panchayat - Municipal Corporation. So, no builder can stop the property buyers from becoming the owner of entire township!," Mr. Kumbhar said.

"As the builders do in the small projects - form society - do conveyance - and get out of the project?," I asked.

"Yes! The builder has no option but to handover the special township to the co-operative housing society of the property buyers. No builder can go against the constitution of India. Constitution believes that Indian citizens are capable of looking after themselves. Indian citizens didn't want - East India Company - then or don't want - any company - by any other name - now!," Mr. Kumbhar said.

What say you? Can you own & run your township?
Would you prefer to be tenant of the builder?
Please, share your views in the comments.

Related Stories:

1) Forming Co Operative society now fundamental right With status of local self Government, under ambit of RTI act

2) Sir, Mein chota sa, pyara sa, nanha sa, baccha hoon!

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  1. very good info.
    So are you saying that if I purchase a flat in township, developer won't accept any money under head "society formation charges" at the time of booking?

    - vijay

  2. very much informative article and tons of thanks to Ravi and Mr. Kumbhar.
    This is eye opener

  3. Nice one Ravi. This is by far the best article so far

    It sad that people do not know how read the title details on the PMC website. All there 'properties' have a "First Owner" attribute with the name of the builder written in front of it.

    And then for those who have taken a loan... all they are doing is paying rent to the real owner - the bank.

  4. Thanks Ravi Sir!

    I have one very popular question and am sure you have the answer to it. Why should I pay extra 1-1.5 lakhs for parking. Ideally space below the apartments is the property of the flat owners. It just need to divide for each one for parking. Why anyone should pay this huge amount to builder????

  5. @Manoj Khope

    Your question is right but unfortunately real estate sector is one place where the deal is like "take it OR leave the place". If you have to fight where will you go ? Court...then keep aside couple of years in hand.
    There is no REGULATORY body to govern this industry(thanks to government interest into this to make black PAPER white!)

    Another trick by builders is to tell negative loading
    i.e super area - % loading instead of carpet area + % loading
    Yes this has been common gimmik now to fool the buyers and we buyers never realize this.

    When you ask for loading % and carpet area they will say the carpet area is super area - % loading.

    Lets understand this with an example. Now a days builders are charging 33-35 % loading. For example if flat size is 1000 Sq ft. carpet area, considering loading % 35 super built up area would be 1350.

    In above case we have 1350 sq ft. super built up, 35 % loading and 1000 sq ft. carpet area but when you ask to builder he explains it in following manner to illustrate to you lower loading %.

    He will say 1350 sq ft. built up - 26 % loading = carpet area. But note the trick. Here he is calculating loading on super built up area.

    1350 sq ft (super built up) - 350 sq ft (26 % loading on super built up) = 1000 sq ft carpet area.

    This is absolutely cheating. In above example you will understand how builder manipulates the calculation and makes you fool. It is actually 35 % loading but builder tells you 26%. And I know so many buyers never realize this. Whenever you visit any project please consider this factor and ask them for carpet area, super built area and calculate exact loading factor. Never ask them for loading %.

  6. Dear Ravi:

    I read this article few days ago and was thinking about few things. I understand that general opinion is that future flat owners in townships will not come together and demand services from builder just like people who live in corporation area (People in corporation area demand services from corporation through citizens forum, local news papers and local activist).

    But I noticed most of the mass which is buying flats in townships is very literate, very much connected to social media and worked in corporate culture. They are very much aware about service industry, it's business model and how to demand services and provide services. Similarly since they are very tech savoy they are connected to internet all the time through phone. I feel that they have more ability to form productive and effective "co-op" society and struggle in systematic manner. We have seen that in "Anna hazare" movement in front of Rastrapati Bhavan. So my point is may be there might be better governance in townships than in municipal area because of following factors...

    1. Average literacy level of people in township will be higher than in municipal area.
    2. Advantage of Global Exposure of people who live in townships.
    3. Effective Political participation due to lower Average age in townships
    4. Connection to social media
    5. Advantage of corporate Discipline(accountability, deliver-ability)
    6. Better outlook due to quality media input (TV, Newspaper, blogs)
    7. Higher average income.
    8. More awareness of constitution and rights due to social revolution (like Satya-mev-jayate show)

    One good example of this would be systematic development of areas in "Kothrud" over "Peth area in pune".