Enhance Your Awareness Before You Buy Flashy Homes and Flats from Indian Real Estate Developers !

Cities grow in population due to higher job opportunities which causes movement of people from the rural and other areas of lower opportunities. Heavy influx of population further improves business opportunities which in turn propels job opportunities. If the infrastructure also grows rapid urbanization of the the city takes place.

In India such a thing has been happening. India has been witnessing massive urbanization in the recent times.

Personally, I am not in favour of massive urbanization. No doubt, massive urbanization might bring quick money and opportunities to a few for some time. But on the overall, it causes unequal development and inequality. The rural areas are likely to become more and more neglected and vulnerable with regard to law and order and security aspects.

The neglect in the rural areas with regard to law and order and infrastructure has been the sole factor for those affluent class from the villages shift their residences to the cities. More and more rich villagers of India are now are selling off their village properties and buying homes in the cities.

The available space in and around cities are diminishing due to growth of residential and commercial properties in the cities. Peripheral development and suburban growth is slow due to slow pace of growth in suburban infrastructure.

Private developers and colonizers are better placed to acquire land in the towns and cities because they know the process of identifying and buying the land better than the common people. This in turn causes all land to be in the indirect control of such people and their agents. The land prices in India has sky rocketed due to this and it is an all India phenomena now. The state governments of India help them in this process by keeping the land records and transaction processes cumbersome and unaffordable to the common people.

So it is indeed a difficult thing for any one to buy a piece of land and construct a home in any city or its suburbs in India, unless he has abundant patience and time.

The builder and developer come to the rescue of the common man in such a scenario.

They have indeed made the property acquisition process very simple for the common people. Just sign a few papers and documents here and there as advised by the property developer and agree to pay the money, the common man can now own a house or a property in the cities of India. But for this simplicity of process, he has to pay a price through his nose and face some good musics later on !

The property price keep rising geometrically. At least that is the inference you get if you watch and observe the property market. A residential flat that is offered for sale in a multi storied apartment complex at a price of say Rs.3000/- per square feet during its launch would become double or treble in just two three years time by the time the property becomes fully sold out. Whether such a thing actually happens or not, that is the general public impression.

So on the overall population influx to the cities of India is going to continue and there will always be people who want to own a property in the cities by adopting the easy route of acquisitions.

But living in a row house or a flat is different from living in an independent self contained house. Both have its own advantages and disadvantages.

The sole big advantage is the simplicity of becoming the owner of the house with a decent look and finish without taking much physical trouble and efforts. The second advantage is the satisfaction that your property value is rising day after day, regardless of the fact that  you ever encash it or not !

But in this process many people initially forget the hard realities of living in a colony.

If you are deciding to purchase a home from a colonizer or property developer, it is better for you to keep the following things also in mind:

1. Remember that the residential colony or a multi storied building that a developer develops requires constant and efficient maintenance and administration on a long term basis. The colonizer's responsibility expires when all his units are sold out. As per the existing laws, the colonizer cannot maintain the complex for ever. He has to hand over the administration of the complex to an association of the owners and hence forth it will be the sole responsibility of the owners' association to efficiently manage the affairs of the maintenance of the complex as built by the developers. So, it is essential that the owners know in depth about their own responsibilities in this. If they do not have good people who know about managing these affairs voluntarily and efficiently, they are going to face many kinds of problems in the future.

2. The most important functions of management of the property complex are :

a. Managing the security of the complex by appointing reliable and efficient security personnel either appointing their own personnel or hiring from reliable security agencies. Either of these functions are not so easy. It requires good man-management and negotiation skills from the part of the representatives of the owners' association. It is not always necessary that the owners themselves possess these skills or have time to devote for this. 

b. The complex need personnel for cleaning the general areas on a regular basis. There should be some one to check and supervise their activities.

c. The individual residential units generate solid wastes of all kinds and these need to be regularly collected and disposed. One of the biggest issues not addressed by the colony developers is this. It is normally assumed that the ultimate refuse disposal is the responsibility of the municipal authorities. The city governments normally charges hefty development fee from the developers before they give the permission for building their complex. However, it so happens that the system of refuse collection and disposal normally does not come into reliable operation so easily. It is advisable that the owners know about this before they decide to buy the property. They should also discuss this aspect with the colonizer in detail and satisfy themselves.

d. Electricity is an important aspect. It is better that the owner knows about the scheme of electric supply in the complex. It is also important that all the drawings and schemes of the electrical system should be taken over by the owners association from the builder while the builder hands over his responsibility to the owners association. It is better for the association to check the details of all these by some competent professional engineer. Other wise, they might face problems of later day maintenance if some trouble develops. The builders normally declares power back ups through generators. It is better to know how the generators are connected and their safe connection schemes to the main power supply. It is also important to identify the fuel supplies, storage, etc and their location safety and security.

e. Water supply is very important. It is important to know from where the water is sourced for the complex. In the beginning, the water to the complex might be from temporary municipal connections or from bore wells. While the complex is not occupied fully, such water supply may not create any problems to the initial residents. However, when the complex becomes fully occupied, the water supply becomes a big problem if the sources are not properly planned and executed. It is better to know whether the builder has approvals from the municipal authorities for full water supply and how the same would be implemented. It is also better to know the water supply scheme of the complex and get it checked by a competent engineer. In multistory buildings it is necessary to know the number of pumps, tanks, their capacities and the scheme of water supply to the individual units. Remember, if the water supply fails, no one can live in a multi storied apartment !

f. Waste water disposal is equally important. How is the sanitation of the building planned and executed ? What happens if the sanitary pipes get chocked or clogged ? Who will attend the problem ? Are there competent plumbers who know about the scheme and systems available in the vicinity whose services could be sought in case of a problem ? What is the capacity and life of the septic tanks ? Where is the waste waters from the complex connected to for ultimate disposal? What are the sewerage systems for rain water disposal and harvesting ?

g. In multi storied complexes lifts are the life lines. Remember that the lifts are also complex electro-mechanical devices which needs expert supervision and maintenance on a regular basis. While the lifts are taken over from the builder, all their relevant information and safety certification also must be obtained. It is always advisable that the lifts are operated only under the supervision of a lift operator. Automatic lifts are prone to life threatening accidents due to ignorance of the users. It is always better to entrust the lifts to be entrusted with some lift company on annual maintenance contract (AMC) basis.

h. While you live in your own independent house, its maintenance is perhaps fully in your control. But when it is a residential complex, you have to collectively ensure it and incur costs towards it. It is your collective responsibility to earmark a regular monthly sum for the said purpose and pay it to your association.

i. The better and efficient upkeep of your complex ultimately depends on the effectiveness of your representatives of your association who are entrusted with the voluntary task of managing the show. If it goes in to wrong hands, it will be managed wrongly and ineffectively and perhaps it will also costs you more. But this function is a democratic process and it is quite likely that you get bad representatives now and then who could make your life miserable. But that is inevitable. The more you become disassociated from your association, the more such problems you are likely to face.

j. Another thing in the privately developed residential complexes are the movement and parking space constraints. While some of the developers provide ample space, others are not so. Initially when the complexes are not occupied fully, the space appears sufficient. But as the occupancy gets to its full, the parking and movement really become a problem. It is better to check the details of these initially itself.

k. High rise buildings need to be checked with respect to their fire safety and exit arrangements. Some buildings have complex layouts which are difficult for the residents to understand. The free movement areas in the building, common to all, should be carefully studied before taking a decision to buy a unit in it.

l. There should be common facilities like meeting halls, office rooms and staff convenience facilities in the complex, in addition to other welfare and recreation facilities.

m. If recreation facilities like swimming pool etc are provided, it should be known how those will be maintained and the recurring costs for maintaining those.

n. It should be better to know the total recurring costs on a monthly basis for your unit and the likely and the maximum escalation in these. It is also advisable to insist to know the total maintenance costs for the complex as worked out by the developer and the average impact of that for every flat or house owner. Such information could be useful to benchmark the costs of running the complex by the owners association at a later day.

It is better that you are aware of all these before hand and be prepared for such problems.

It is quite possible that in the future our governments may evolve better statutes that would help to resolve these issues.

Governments may amend the present laws for allowing either the builders or other expert professional companies who could be entrusted to carry out the maintenance of the complexes on behalf of the residents and the owners on a long term basis.


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Thinking of owning a home in India ? You may consider these too !

There are basically two kinds of people who consider owning a residential property in India. The first types want to have a house of their own to live in happily ever after. The second types are those who consider houses as real estate assets that can be acquired and accumulated as means of wealth whose value rises with time. The first types would not dispose their houses come whatever may. On the other hand, the latter types might dispose off their houses at the most opportunistic moment of time. The former have sentiments attached to the house while the latter may not have such a soft thought.

The first types might be willing to spend a good fortune in building or furnishing their dream homes. For them home means many things such as a symbol of status, power, sentiment, pride, comfort, luxury, security, peace, showpiece, etc, etc., in addition to being a mere shelter for a living.

Whatever be the case, owning a magnificent home, unique in many ways is the dream of any human being. Whenever man gets enough money he looks towards making a house. For most people, whenever their incomes exceed the levels that are required for sustaining their lives with regard to food and clothing spending on home starts. The only thing that may precede this activity would be perhaps spending on jewelry.

In my home state, Kerala, a good number of people for the last two three generations have got opportunities to earn a few times more by working in foreign countries than their local cousins who toil similarly at their motherland. This excess incomes have translated into palatial homes in the nook and corner of Kerala for the last few decades. Those who could afford it made such huge brick and concrete buildings of all possible shapes and looks in just about fifty years time that consumed all the river sand this coastal state had accumulated ever since it came into being as a geographical entity! House building is such a craze with the Keralites now that all the natural raw materials for making a house such as sand, brick and timber are expensive materials for which the Malayalee would perhaps die or kill !

Taking a cue from the Malayalees and seeing their affluence as reflected in their palatial houses built from monies earned from hostile countries and regions abroad, the rest of India too got into action. Others from Bihar, Bengal, Punjab and Gujarat too began to venture out of India in search of incomes that their home country administrators would not allow them to make at home.

India is the only country in the world which has two types of citizens. Those toiling at home with lower incomes and higher taxes and those doing the same outside with higher incomes and lower taxes with the latter spending their excess in building homes as show pieces to show off their affluence to their less privileged country cousins.

Of late some of the foreign employers of Indians have realised this and began to set up their shops in Indian metros where they could employ them spending lesser than their own countries which have stringent laws in favour of the workforce than India. This has resulted in a spurt of demand for more comfortable shelters of international standards in the Indian metros.

Real estate business that used to be a phenomena of the Mumbai metro culture is now a booming industry all over India. The biggest gainer from this industry is the Indian governments and the colonisers (official name given to the private real estate business men)

Whatever be the case, there are more and more Indians who have excess incomes to divert to their dream homes. Some have more than enough to fulfil their dreams, while a greater number are with a comfortable earning more than that they need for their life routines.

Now the big question for the latter group is whether to venture into owning a residential property by committing their future excess income potentials to bank loan equitable monthly instalments (EMI) or not.

This blog is for this group of people.

My advice for them would be this.

If you have a house any where else such as a likely share from your parents and your income excess is just enough to meet you EMIs, I would advice you not to go for a house. It would be better for you to live comfortably in a rented accommodation and save you excess incomes to accumulate in other safe manner. Never ever make an EMI commitment which is just matching your excess income or higher even marginally.

If your excess income cannot afford a home in your place of work, for example in a metro city near to your work place,  but can comfortably afford one located in some other location, you may think of owning that as an asset. In this case, you should be prepared to dispose it when you are in need of cash or when you find a reasonable appreciation of your savings.

Once you have decided to buy a property, check the reliability of the seller and the details of the property thoroughly. In India, property related litigation and troubles are many. Just because the property is cleared by some authority does not mean that it is a safe investment. In India there are too many authorities who could cut each other at your costs !

Never buy a property which you cannot look after. You should establish your credentials in the locality where you are proposing to own the property and do all such things to physically take possession of it by making your ownership known to a few of your neighbours.

Ensure that all the property documents are properly made  with regard to the identities of the seller and the buyer. Ensure also that your property is well defined in the documents. Checking the details of the property with some legal practitioner experienced in this field is a wise idea.

If you are thinking of buying a new flat or apartment in a multi storied apartment building from a builder, you should know that there are certain things for which you are responsible. There are many things which are common facilities which need to be managed and maintained well for all the years later if the property need to be a good dwelling place. This includes the regular cleaning, garbage collection, lift operation and maintenance, management of security, water supply system operation and maintenance, parking space management, etc. As per the prevailing Indian laws as applicable in different states, these are responsibilities that are to be handled by the association of the owners themselves. These are not the responsibility of the builder of the real estate developer.

In India many buyers of apartments are pretty unaware of this fact. They are made to believe that the real estate company which sold the flat would take care of this always. The real estate company would not tell the buyers about this and they keep telling and advertising these in such a clever manner that the buyer would know about these only by hard experience later.

It is a wise idea to know the details of the other buyers of flats in the same apartment building. If the majority of the owners have just bought it as an investment, the place many not be a good one for a comfortable living, unless there is a responsible society which is in place to manage it.

The apartment owners societies are a type of local government and are formed by democratic principles. For the same reason, there is all possibility of vested interests or incompetent persons managing the affairs from time to time later making things not so palatable to the individual owners or residents.

But awareness of these things by the owners and their tenants would make things much easier for all.

The multi storey apartment management is not an easy thing. There should be a dedicated team of employees and a responsible management who knows fundamentals of good management. If not there will be hardships for the residents.

Future value of an apartment in a multi storied apartment building depends much on the way it is managed and maintained in the future years after the builder has sold the individual units. Much of this depends on the mutual understanding among the owners who form the management association of the apartment building. Mutual distrust and infighting between the owners can cause great damage to the individual owners. It is in the interest of the owners to encourage the few among them who volunteer to take the responsibility of forming their association. If no one comes forward they should be prepared to take up this responsibility themselves. If you are not willing to do this, you should not consider buying a flat.

If you are thinking of making a house of your own in a piece of land, then you should check the details of the land. All lands in India are not suitable for residential purposes. It is better that you check all these matters carefully.

My purpose of writing this blog is not to give all the details concerning property matters here. It is only to remind those thinking of owning a residential property regarding some of the important aspects that they should keep in mind before actually venturing in to it.

Buy or build homes that are of a size that you actually need. Huge sized homes are a liability even for those who have surplus incomes and wealth.

But if those of this kind want to indulge in showing off their riches, let them do it. After all what would such people do with the accumulation of money with them. If they spend those huge sums of money in making palatial buildings that would benefit the architects, artisans, contractors and the governments besides beings eyecatching delights to the commons. In one or two generations time those buildings would either become museums or ghost bungalows or hotels or government offices, if we take the cue from the past !

But ideally a family comprising of less than four members does not need a house which is more than 1500 square feet of carpet area. Any thing half that size I would say just a necessity and any thing double or more I would say an extravaganza.

I am a common man and I cannot think like aristocrats. But I do pity those neorich fellows who do everything in life to live like aristocrats of the past by building palatial buildings, some of them much bigger and stylish than the palaces of the royals of the past. Pitying because of their desparate dependency on servants and household staff on whom they have sold off their self esteem, privacy and personal hygiene. Real big houses are indeed prisons, may be even worse than prisons !

In one way you should be happy if you are not of the vulgar rich type who can afford a palace !