Green Buildings - Indian Perspective

Green Buildings – Indian Perspective

Deteriorating Environmentmal conditions pan India entails we MUST focus more on Environment Friendly Buildings & Infra development. We are a country of 1.5 billion people and counting , in which 32% of population lives in urban areas.India’s  increase in commercial energy consumption in the last four decades has been 700% and is growing. Energy consumption in india will grow upto 3 times of current consumption by 2030. There is a shortage of about 250 million liters of water per day, if we only consider the major Indian cities. The crisis is approaching, lest we stem it. Green building construction presents a solution for sustainable growth.

What is Green Building? Green building, or sustainable design, is the practice of increasing the efficiency with which buildings and their sites use energy, water, and materials, while reducing the negative impacts of the building on human health and the environment over the entire life cycle of the building. Green building concepts extend beyond the walls of buildings and should  include siting, design, construction, operation, maintenance, renovation, and demolition; as also, community and land use planning as well.

There are numerous ways to make your buildings more Eco friendly. We list a few below

Sustainable Site Selection:

Easy availability of public transport/ Mass Transit system and conveniences helps cut down energy consumption for transportation. Rehabilitation of sites damaged by environmental contamination is a better option than any new piece of land where large amount of energy and resource is needed to make the land worthy of building on, thus saving large amount of energy. 

It is very important to protect the existing Flora & Fauna, the soil and natural features. Avoid hard paving on the site to preserve top soil and ease rain water harvesting. There should be minimum storm water runoff.

Sustainable Building Components / Material

Material which can be recycled, have low toxicity, nil / low harmful air emissions, as also, have a long shelf life are better. Planning the Building’s structure and dimension can reduce the construction costs. Construction and demolition material can be reused and recycled for landfills. Proper planning for managing materials through deconstruction, demolition and construction is done. 

Using renewable materials like bamboo flooring, wool carpets, strawboard, cotton ball insulation (made from denim scrap) is good. Locally available materials must be given priority; Saves transportation costs. Alternative materials that can be generated from waste with lesser energy is used over conventional building materials, e.g. alternative materials for timber, like MDF board, Mica Laminates and Veneers on composite boards should be used instead of natural timber. Industrial waste based bricks and blocks, aerated lightweight BPC concrete blocks, can be used for masonry structures and Fly ash, for bricks, outdoor paving and in concrete.

Solar Energy

Indian Govt is giving numerous subsidies, including sharing of Solar energy generated in the Grid so that excess energy generated during day can be bartered for energy at night, thus being economically efficient, as also environment friendly.

Water Efficiency

Installation of water efficient or low flow equipments in kitchens and bathrooms to reduce water consumption is very important. Newly designed Vapor generating taps save 80% water while being as efficient.

·      Incorporating waste water management technologies like dual plumbing for using recycled water in toilet flushing or using water conserving fixtures such as low flow shower heads, self closing nozzles on hoses, water closets with dual flush options.

·      Use of Micro irrigation techniques at sites instead of high pressure sprayers.

·      Recirculation system for centralized hot water distribution.

·      For landscaping purpose, local plants and trees are used as they consume less water.

·      Provisions for reusing and recycling water are made to ensure efficient water management.

·      Using treated waste water, non potable water for site irrigation. Raw sewage can be recycled using aquatic plants like duckweed and water hyacinth to produce clean water suitable for re-use in irrigation and industry.

·      Integrating Rain water harvesting system in building design to ensure maximum possible utilization of rain water.

1billion square foot building area has been certified as green by leading green building rating system LEED-INDIA.

There are two established Green Building rateing system in India.

-       LEED-INDIA

-       GRIHA

Some Green Building Projects in India

·         Suzlon Energy Limited - Pune

·         Biodiversity Conservation India - Bangalore

·         Olympia Technology Park - Chennai

·         ITC Green Centre - Gurgaon

·         The Druk White Lotus Schoo l- Ladakh

·         Doon School -  Dehradun

·         Raintree Hotels - Chennai

·         Nokia - Gurgaon

·         Rajiv Gandhi International Airport - Hyderabad

·         Palais Royale at Worli – Mumbai

Taking / Giving Property on Rent? Our Advise; ----- Be Wise

Hiring a place may seem very simple for the Landlord, as also the Tenant. Sometimes these become very unnerving if you miss out on some important aspects that need to be considered before moving into the house / letting out your house. Taking the paperwork lightly, may have serious implications for both parties. Apart from checking out the exteriors and interiors, the legal check on various aspects is equally essential. . Points to be considered:

Tenants. 

·       Check property ownership documents. Conveyance Deed is the best proof, however, Electricity / Water / Gas Bills are also acceptable.

·       If a Broker is involved, his registration should be checked. 

·       Brokerage to be paid to the broker varies from 15 days rental to 1 month in North India. It could be more at places. Must negotiate it.

·       Brokerage paid is part of expenses & you can use it for tax purposes.

·       You must inspect the house and see the house in detail before finalizing. Bring out the repairs required, like; toilet flushes, electricity points, modification required for ACs, Doors & windows, etc.

·       Photograph broken or dilapidated fixtures / fittings & exchange it on mail with owner to avoid problems while handing back.

·       Major & minor Repairs; major repairs due to fair wear-and-tear are done by the owner. In case of negligence, cost is borne by the tenants. All minor repairs are responsibility of the tenants.

·       You must read through the RWA by laws of the society to avoid inconvenience / regrets later.

·       Get a clear idea about the amenities near / around the property, public transport, neighborhood gentry, proximity to essential markets, schools, hospitals, etc.

·       Check the safety aspects, especially for working / single women. You could get the crime rate in the area on internet.

·       Find out the age of the property. If possible, speak to the previous tenants or the neighbours.

·       For Fully furnished apartments, normally a Lock-in period is required, as expenses are incurred on furnishing the house. Must check the deed in detail, including the rent increase percentage after expiry of contract must be mentioned in the Rental Agreement.

·       Lease Deed/ Rental Agreement - A rent agreement or a lease deed is a legal document that contains the details of the rights of a tenant to occupy certain property for a fix period of time in return of the rent paid by him to the property owner. This agreement is ideally drafted before the tenant occupies that place. Necessary Inclusions of the rental agreement or the Lease Deed would be;

·       Include start and end date of the tenancy

·       Monthly Rent amount payable and the date of payment- should generally be 10^th of the month, especially for salaried persons, to avoid cheque bounce.

·       Security deposit amount to be paid. This is refundable & should be mentioned in the Deed.

·       Service/maintenance charges. Is it included in the Rent or over & above the Rent.

·       Responsibility of the payment of repair and maintenance.

·       Conditions of termination of Agreement.

·       Notice period for vacating the house.

·       Provisions of electricity, water and power facility & their payment procedure.

Property Owner / Landlord. 

Rented Property generates additional income by way of lease or rent. But if leased to a wrong person, could cause numerous problems. It requires substantial care and a lot of aspects have to be kept in mind while selecting the right paying guests (PG) or purchasers on rent (rent party):

·       Must check financial capability and background of the prospective tenant (Second party). (Too good offers are dangerous. If the going rental is Rs X and you get offer of Rs 2X, reject it)

·       Police verification of the prospective tenant is a must. This process helps in background check of the tenant. Not doing this is a punishable offence under Section 188 of the Indian Penal Code.

·       Take the permanent address proof of the prospective tenant.

·       Take the bank statement of the bank from which the payment cheques are made.

·       Meet the tenants one on one, interact with them and get to know them. Don’t leave it on the broker – his sole interest is Brokerage.

·       Services of Registered Brokers only must be used. If he charges service tax, (currently 14%), he should deposit the challan & give details of it to you.

·       It is imperative for the landowner to ask the appointed broker to provide the agency registration number, valid signature and agency seal/ stamp on every page of the 'Lease and License' accord so that the broker can be held accountable to look after any legal disputes in future.

·       If possible, rent your property to Tenants with families. If renting to Bachelors, obtain “Comfort Letter” from the Employer of the prospective tenant & do a call check with the Company’s HR / Admin.

·       Lease Deed/ Rental Agreement - A rent agreement or a lease deed is a legal document that contains the details of the rights of a tenant to occupy certain property for a fixed period of time in return of the rent paid by him to the property owner. This agreement must be drafted before the tenant occupies the place. Necessary Inclusions of the rental agreement or the Lease Deed would be;

·       If the period of time is 12 months or less, registration is not compulsory. If more than 12 months, you are legally bound to register which costs a miniscule amount (nearly 1% of the total rent value, depending on the local laws), making it a very authentic legal document.

·       Clear mention of Dates; to and from.

·       Notice period required from both sides; owner and tenant.

·       Rental value and the security deposit made by the tenant and any advance payments done.

·       The annual rent is generally 2-3% of the capital value and differs according to the location and amenities provided. 

·       Date of monthly rent payment (usually around 10^th of each month, especially for salaried tenants).

·       Annual increase in Rent Clause.

·       Mode of payment; ECS mandate or Post dated cheques. AVOID CASH TRANSACTIONS.

·       Clear mention of the size of the property and the number of rooms, bathrooms, kitchen, etc.

Wishing you a Happy Letting out / in. You may make lifelong friends with your Tenants / Landlord. Happy Safe homes is what is important.

Know Your Lender For Your Shelter!

“A house is not a home unless it contains food and fire for the mind as well as the body.”

Benjamin Franklin

We have all dreamt of a perfect home where we’d like to experience life with our loved ones. Big or small we all have our own ideas of a dream home. But sadly, not always can we afford the home we dream of and that’s where the banks come in; helping us finance the home we want. But, do they actually help us? Let me help you find the best loan for YOU!

Costs related to a Home loan:

1. Pocessing Fees- This is the first prominent fee one needs to pay with the loan application. The fees varies from 0.25% to 1% of the loan amount and is non-refundable i.e. you have to pay it irrespective of whether your loan gets sanctioned or not.
2. Legal Advisor Fees- The fees you bear to get the property’s papers verified and scrutinized by a legal advisory or a lawyer and prepare a report on the basis of which bank will decide whether the property can be financed or not. This fee is also non-refundable and needs to be paid with the loan application.
3. Stamp Paper Cost-This is a nominal expense of about INR 300 which is required to buy legal stamp papers once the loan has been approved and write down legal home loan agreement between you and the bank.
4. Cost of Home Insurance Premium- Insuring your home is a recommended option, which some banks have as a mandatory requirement. This insures your home against any natural calamity and other threats which can potentially destroy your property.
5. Cost of Home LOAN Insurance Premium- Home loan insurance is different from home insurance. The first insures you against the home loan liability; the second i.e. home insurance, insures your property. Home loan insurance can also act as your guarantor, in case your credit report is NOT good and the bank wants you to provide a guarantee to support your home loan. This is a big expense if you opt-in for it. However, it is recommended to cover the Buyer’s dependents, in case of his demise.
6. Service Tax on Bank Fees- Service tax is another amount that is charged by banks on the amount that you pay them as fees.

Right Loan Provider  - Factors to Consider. Six factors for selecting right home loan provider:

1.   Processing speed- It should take not more than 10-15 days for a loan to be processed and additional 3-5 days for the loan amount to be disbursed.

2.   Lending criterion- Different banks have different lending criterions for the estimation of the loan amount and in general the approval of a loan. For eg- age, job profile, credit history, etc of the borrower.

3.   Repayment of loan-  Banks have terms and conditions for the repayment of the loan and also for an early part payment / repayment of loan. You must refer to the terms related to the settlement/ foreclosing the outstanding amount in detail before finalising a lender. As per RBI Directions, a bank can NOT charge Foreclosure Charges.

4.   Cost of loan- Banks have certain other charges related to loans, irrespective of the loan being sanctioned. Refer to the beginning of the article for a detailed explanation.

5.   Fixed vs. floating rates- In Floating Rates, Rate of Interest keeps changing, where as in Fixed, it is Constant. In Hybrid, the rate is Fixed / Floating for a period & changes thereafter. As a thumb rule, if the loan period ranges between 2 to 5 years, going with a fixed interest rate is better, and Floating rates are more suited for long term loans. You can even go for a hybrid loan, which enables the borrower to enjoy the best of both fixed and floating interest rates.

6.   Hidden charges- Hidden charges is something that tends to prick the pocket of borrowers the most. Thus, while narrowing down the options, it is advisable to compare the processing fee, down payment, valuation fees, prepayment costs and other charges levied by different lenders.

     In case of any further queries, we would love to hear from you. 

     Leave us a message on -Facebook; Blog; email- biraj@colonelz.com

Check it before you Cheque it!

“Home is a place you grow up wanting to leave, and grow old wanting to get back to.”

John Ed Pearce

Purchasing a home, while being very exciting, is also an extremely tedious experience. There are truck loads of options in the market, but not much information about them. To help you tide over your delusions & worries, we have created a 10 point checklist to rate the properties you are interested in, so as to help you take an informed decision.

Check It Before You Cheque It!

Before you decide to invest all your Green (or should I say Pink) Bucks, take a step back and get informed. Check the following before taking your Call.

·         Builder Related

Credentials of the builder- Make sure you do some research on the builder. Find out about a previous/old project done by the builder and pay a visit. You are likely to get similar Property & Services. Talk to the residents, get a feedback on the following:

a.        Condition of the Building, to include Sanitary & Plumbing fittings, Furnishing, Plaster work.

b.        Paint, Polish & state of walls & furnishings quality

c.        Sewage issues & Seepage problems

Amenities- State of maintenance & upkeep of Club, Sports facilities, Banquet halls, lawns, pathways, etc.

Maintenance & Security. While visiting the old project judge the security and over all cleanliness of the society. Find out how efficient is their waste disposal system.

Air & Lighting- Better ventilated property is more naturally lit & reduces electricity bills.

Price- Its Basic Price (BSP) & allied costs like Maintenance etc. Compare it with Similar Quality societies nearby.

·         Location. Extremely Important. General location (like next to NH, means high noise level) & specific location (park facing –so good view).

·         Connectivity- See it to believe it. Proximity to schools, bus stations, your work place, etc., as travelling relates to your fuel / travel costs.

Dwarka Expresway property buyers are stuck as road construction is stuck due to litigation. Avoid options where a road is to come up in the next 6 months, because it may not come up in the next 10 years.

·         Resale Potential-

o   Higher Occupancy of new flats means better Resale chances & value.

o   Enquire from Local brokers for resale price. Remember, they will praise the property on which they are likely to earn more –take it with a pinch of salt. Compare with prices of properties in the vicinity; would help you judge the market reputation of the property you are interested in.

·         Right Price – If you are selling, ask Brokers for Purchase Price & vice versa. Average the Sale & Purchase costs offered by Brokers. This is probably the Market price of the property.

·         Road Conditions Around Property –Must check the road condition & lighting, at least up to 500 meters from the project;  the condition of the roads as well as the lighting on the road.

·         Rental Potential- Often one buys a house for self use, but later changes his mind. Before investing in a house, find out the rental value. Annual rent of a house should be 2-4% of the total cost of the property.

·         Young Investor.   If you have a transferable job, or are planning to use the house a decade or later, most important aspect is – Is it likely to give Good returns on sale? 70% people change their mind in a decade or so, as to where to settle. So your Investment should be able to get you a property at the Place You Finally Decide to Settle.

In case of any further queries, we would love to hear from you. Leave us a message on -Facebook; Blog; email- biraj@colonelz.com

      An aware buyer is a smart buyer.

Real Estate Purchase, Sale, Taxation, Capital Gains, Reinvestment

1.            Purchase of Property. Once you book a property with a Developer / Builder, it is deemed as acquisition. When you sell your real estate for a profit, you have to pay capital gains tax on the profit earned. The capital gains tax could be Sort Term Capital Gain (held for less than 3 years) OR Long Term Capital Gain (held for 3 years or more). In case of ancestral property, date of initial acquisition is taken.

2.            Short Term Capital Gains (STCG). In case the property is held for less than 3 years, you pay tax on the profit as per your Tax slab. It is deemed as normal income like salary.

3.            Long Term Capital Gain (LTCG). In case you sell after 3 years, it is Long Term Capital Gain, taxed at 20%.

4.            Indexation. To cater for inflation, Indexation is done. So, if a property was bought in 2000, for Rs 10 lac & sold in 2013 for Rs 30 lac, the taxation will be as below:

Cost of property                                              10, 00, 000

Year of property purchase                                          2000

Selling price                                                    50, 00, 000

Year of sale                                                     2013

Cost inflation index (CII) in year 2000             389

Cost inflation index (CII) in year 2013             852

Indexed purchase price                                  =          (2000000 x 852)/ 389 = 43,80,462

Capital gain                                                     50,00,000- 43,80,462 = 619537

Tax (20% of Capital gain)                                   123,907

5.         Date for Taxation / Tax Exemption.

          A capital asset means property of any kind. A right to obtain conveyance of immovable property is "property". Hence, if the booking agreement and allotment terms and conditions of the builder gave a right to obtain conveyance on the said property, the property after fulfilling certain conditions, that itself becomes "an asset" under the Income-tax Act. The issue which arises w.r.t. transfer of rights in the property under construction as well as in case of transfer of property (after taking the possession) is - whether the gain on transfer is short-term or long-term?
The date which decides the nature of capital gain is “The date of acquisition" In this regard, there can be various views. To qualify the investment in case of builder flats, the date is the date of allotment of the residential flat and the payment of installment is a follow up action. However, you will need to pay Service Tax on 25% of the Cost of flat. In case of ready to move in Flats, the Registration date is taken into account.

6.       Cost of Property. The cost of property includes Brokerage paid, cost of improvement etc, which is also Indexed. So if you paid 1% as brokerage, say 20000/ & spent 3 lac on house improvement over 3 years, these could be included in COST & reduced from profits (duly indexed).

7.       Saving Tax. If you reinvest the accrued amount in ONE Residential property of equal or greater value, or in Govt Specified Bonds, the tax could be saved.

8.       Guidance. You could go to my blog https://www.blogger.com/blogger.g?blogID=1402354733683241338#editor/src=sidebar         Or contact Biraj@colonelzinfracon.com; 9818744711, for specific advice. We don’t charge for routine advice. Costs, if any, depend on the case. 

Rail Freight Corridor OR Passenger Corridor

Should Railways have Freight Corridor OR Passenger Corridor – Food for Thought.

There has been a lot of positive development on Upgrading the Railways.

The current Passenger Train tracks are severely & adversely affected by Speed Limits due to their Quality & vintage. Repairs / up gradation may cost as much as laying new tracks.

The existing Railway Stations are also constrained for space, accessibility, parking space and are quite unorganised.

Is there a requirement of having a complete new set up of Train lines, maybe spread over a period of 10-15 years, wherein the existing Routes & Stations gradually get replaced by freshly laid next generation tracks, with State of the art Stations coming up. PPP is good option. If DLF can lay Mono Rail, what is wrong in Pvt players in Railways?

The existing lines could be used for Freight, with Freight Stations being developed close to the Bigger / existing Towns / Cities. Imagine the Infrastructure & Job Creation, as also effect on GDP by efficiently speeding up transportation.

If we can have completely new airports at fresh locations, in major cities like Hyderabad & Bangalore, why can’t we have new Railway Stations? It is neither too difficult nor impossible.

A small country like Nigeria shifted its Capital, we can surely take this on.

Buying a House?

One is often pained to meet unsuspecting Friends (specially Faujis), taken for a ride by some Builder or the other incl some very High ranking people. Some of the Basic principles you MUST follow;

·                     In Money matters, NO Friends. Its business & NOT Charity. NO FAITH, just go by BLACK & WHITE.

·                     Not all that shown in the Brochures are true, as they are in 2 dimension & virtual, whereas the promise is in 3 dimension & Real.

·                     Seeing is believing, so see the Proposed Sight, Property papers, Land registration, Govt clearances etc.

·                     MUST visit at least two properties made by the Builder, interact with the Resident users & you will come to know of the Truth.

·                     Read Complain Forums of the Builder before buying. Check No of cases pending against the builder. I know of a Builder Promising Moon, but having more than 200 litigations- none from the moon.

Anyone needing help in my friend Circle, pl feel free to contact. Its Your money, don’t donate to a Cheater Builder.