Renting Tips For First-Time Landlords

Does that ‘FOR SALE’ signboard outside your house look old and worn out after months of inactivity? May be it is time you started thinking about something different. One of the trending ways to get regular extra income is to rent out your house. While most of us think that letting out a house is a cakewalk, landlords who are actually trying to sell their properties would probably disagree. Misuses of the flat, low or no maintenance by the tenant, delay in rent payment are some common problems faced by landlords.

To avoid these hassles in future, one needs to do a little bit of homework before letting out a flat. Here are a few points you need to keep in mind:

Decide the Rent

The first step is to research about the renting trends in your area. Find out the rent of nearby let out homes and then calculate the rent per sq. ft. You can now apply the same to your flat to arrive at an approximate rent value of your house. The main elements to be considered for deciding the rent should be the capital value of the property, amenities offered and the locational benefits. Usually, the annual rent is 2-3% of the capital value of the property but this cannot be considered as a hard and fast rule. If your flat is in a housing society, it will be easier to decide the rent since all flats are more or less similar and so should be the renting criteria. However, if your flat is furnished or offers an exclusive view, you can charge a little more as premium.

Spread the Word

A traditional method to advertise your house is to hire a broker. In addition to bringing the tenant, he can also assist you in verification and other legal processes. But a broker usually charges half-month or a full-month’s rent as his commission. You can also post an advertisement in popular newspapers. And today if things have gone online, then so has the renting process. So if you are an internet savvy, you can advertise your home on the internet. There are a number of websites that provide relevant platforms with advanced listing, searching and sorting options.

Do Not Take That Rent Agreement Casually

Most of us are quite careless about the rent/lease agreement. But it is a crucial document and much care should be taken for its drafting. A rent agreement is document that mutually binds the landlord and tenant to comply to each others terms and conditions. Important information such as the rent and its categorization, date of rent payment, security deposit, rent period, facilities and amenities, etc., should be clearly mentioned in the agreement.

A rent/lease agreement can be used as evidence in the court only if it has been registered. Section 17 of the Registration Act says that every lease agreement for more than a period of 11 months needs to be legally registered. You may have to pay minimal amounts for registration along with the stamp duty.

Know Your Tenant

Will you ever give your house to a criminal or a drug dealer? A felonious person will not tell you about his illegal practices himself. So, knowing your tenant is not all about introduction. You also need to check his background. And you would be surprised to know that not checking the background of a tenant is a punishable offence under section 188 of the Indian Penal Code. Verification forms are available online. You just need to download it, fill the form and submit it at the police station of your area, along with your tenant's ID proof.

These are some of the points you need to keep in mind before you finally rent out your flat/house. But your duty does not end here. You should visit the flat periodically to check if the tenant is violating any conditions, and if they are then proceed accordingly.

The Craze Around Wi-Fi Cities: Is India Really Internet Ready?

Many people compare the advent of Wi-Fi cities with the recent ‘Digital India’ campaign. This is not completely true as the proposal for free Wi-Fi hotspots was under discussion even before the NaMo government. The present government only accelerated the development of a digitally equipped India.

Currently, we have numerous free Wi-Fi spots across the country and many others in the pipeline. Additionally, the government is carrying out pilot projects in trains, metros and airplanes. But is India really ready for it?

Although elaborate plans have been made in the past, there’s been little in terms of delivery and quality of services. Thus, the country doesn’t have a great track record in this respect.

Firstly, the concept of ‘free’ Internet is itself a bit controversial. Free internet is only available for a particular time span or data usage. For example, in Bangalore one can surf the web for free for the first three hours only and post that one need’s to buy a recharge card. In case of Delhi’s Connaught Place, only half an hour worth of web surfing is free of cost.

Another problem that irritates the free Wi-Fi users in India is the limited coverage. In Patna, there are many spots in the specified 20 kilometer Wi-Fi stretch where Internet cannot be accessed at all. The situation is no different in Bangalore and Delhi’s Connaught Place. Quality of services is also a big question with the free Wi-Fi. Slow speed and weak connections are common experiences of the users.

It’s also not unfair to say that India is still uncertain when it comes to the issue of Internet Security. Wi-Fi spots are a haven for Internet hackers and users are still waiting for strong firewall mechanisms to prevent foreign intrusions.

With the Digital India campaign due in 2019, the country has a long way to go. We can only hope that things fall into place soon.

 

What Does The Land Acquisition Ordinance Mean For Industry?

The government on 29th December, 2014 introduced an ordinance to bring major reforms in the Land Acquisition Act, 2013. This ordinance is seen as a course correction strategy by the NDA government as the Act championed by the UPA was termed restrictive by the industry bodies and was hurting growth. Though through the ordinance, the government has tried to balance the interests of both farmers and industries, yet it has also created a difficult situation for the landless laborers.

Here come the major changes the ordinance has brought in the Land Acquisition Act and what it means for the industry.

Removal of consent and Social Impact Assessment (SIA) Clause

The key amendment has been made in the Section 10 A of the Act. Government has expanded list of sectors where Social Impact Assessment (SIA) and landowner consent is not required while procuring land. The list now includes rural infrastructure including electrification, industrial corridors and affordable housing apart from national security and defense. PPP projects where ownership of land continues to be vested with the government are also exempted from the clause. Earlier, a written consent from 70 percent of the affected families was mandatory before progressing with other transaction formalities.

Exemption from SIA clause will kick start long stuck infrastructural projects which are essential to improve GDP growth rate. The assessment clause in the original act implied compensation for everybody (not only landowners) who will be impacted by land acquisition. But, according to the new ordinance, only land owners need to be remunerated. This also indicates that whether the land is fertile or not it could be acquired if it is needed for the above mentioned categories.

No change in Compensation Packages

To contain the interest of affected farmers, the compensation entitlement has not been changed, despite several recommendations being made by numerous state bodies. It is four times the market price for rural land and two times for urban land.

Ordinance addresses the issues of Farmers Country-wide

The waiving off of the consent clause has been balanced out by including 13 other excluded Acts under the purview of the main Land Acquisition Act. Till date, land acquired under these Acts followed no uniform policy.

The Acts include the Coal Bearing Areas Acquisition and Development Act 1957, the National Highways Act 1956, the Ancient Monuments and Archaeological Sites and Remains Act 1958, the Petroleum and Minerals Pipelines Act 1962 and the Damodar Valley Corporation Act 1948. The Electricity Act 2003, Land Acquisition (Mines) Act 1885, Atomic Energy Act 1962, the Indian Tramways Act 1886, the Railways Act 1989, Requisitioning and Acquisition of Immovable Property Act 1952, the Resettlement of Displaced Persons Act 1948 and the Metro Railways Act 1978.

So, now farmers whose lands are acquired under the above legislations would be compensated according to the provisions of the Land Acquisition Act, 2013

The Future Course

As it is just an ordinance and not a full-fledged Act, the proposal will now face the test in upcoming budget session in the parliament in February. Presently, the main opposition UPA is against the ordinance. However, if we go by the current media reports this won’t be hurdle for the ordinance to become a law. Despite having a lower numbers in Rajya Sabha, the current government has a majority in Lok Sabha. The government is expected to go for a joint parliament session to get the ordinance passed.

For the meantime, one can say that the ordinance is a positive move by the government which reflects its pro growth and pro industry orientation.



 

What Is Stalling The Mumbai Metro Phase II Project?

After the success of Mumbai Metro Phase I, Mumbaikars were eagerly looking forward to the next phase. However, the Mumbai Metro Rail Corporation terminated its agreement with Reliance Infrastructure recently, thus bringing the Rs 12,000 crore project to a halt.

Though the termination was mutual, things had never been smooth for the Charkop-Bandra-Mankhurd Metro Corridor (Phase II) anyway.


So, what is exactly stalling this Mumbai Metro project?

Apparently, the foremost reason for the termination of contract by Reliance Infrastructure is the lack of environmental clearances. The proposed sites for car depots at Charkup and Mankhurd fall under the Coastal Regulation Zone (CRZ). Previously, the government gave a conditional clearance for the same that allowed construction of car sheds over stilts so that the mangroves were not affected, however, washing of trains was not allowed. In words of Reliance Infrastructure spokesman “this makes car shed depot impractical”. The search for alternate sites for the car sheds has not been successful till date.

Another problem with the Metro route is seen as the incapability of Mumbai Metro Rail Development to provide 100 percent right of way for the project. Right of way is a critical part of any transport corridor and if government finds it tough to take up then there is no use of taking a project forward. According to recent media reports, only around 55 percent of right of way has been granted and that too is non-contiguous.

Whenever a high profile project like the Metro is drafted, the major problem for the authorities is the shifting of existing utilities. Mumbai, being a congested city, makes the shifting of utilities like water, electricity and telephone connection not only difficult but sometimes impossible. For the Mumbai Metro phase II, the government is unable to draft any concrete plan regarding this aspect as of now.

Previously the constraint by Airport Authority regarding the construction height of the metro station near Juhu was also posing a problem for the phase 2 portion of the project. Nevertheless, thankfully the issue has now been resolved.

Therefore, there are numerous issues acting as road blocks for the metro project

Understanding Service Tax And VAT On Under-Construction Property

Rakesh (name changed) has always dreamt of owning his own home. Now with a salary increment, he was closer to realizing his dream. He shortlisted a few under construction properties that met his budget of 60 lakhs. However, as he readied himself to pay, he enquired about the actual cost of the apartment from the builder. The cost sheet supplied to him included two additional charges – VAT and Service Tax which he had no clue of.

Are you also unaware of these additional charges as Rakesh?

If your answer is yes, then you should know that Service Tax and VAT applies on all under construction property transactions. However, their actual value varies with states in which the property is being constructed.

Let us learn more about these taxes and the calculation behind them.

Service Tax
 Service tax is levied by the Central Government on the construction services offered by the builder to buyers. Presently the rate of service tax is 12%. Taxes like Education cess and higher education cess is calculated on top of the service tax which makes the effective rate of service tax to 12.36%.

Though it sounds simple, calculation of service tax is a bit complicated due to its applicability to various cost heads. The basic cost of the property you pay includes the cost of land and construction. Service tax is applied only on the construction component. As it is difficult to calculate land cost and construction cost separately for majority of the properties in the country, the government offers an abatement (relief) scheme. According to this scheme, relief is given on 75% of the value of the property. Service tax is charged only on the balance 25%. This effectively brings the service tax rate to 3.09% (12.36% * 25%). It is to be noted that abatement is reduced from 75% to 70% in case of flats having a carpet area of more than 2000 sq. ft or property value is Rs 1 crore or above. In all such cases, service tax of 3.71% would be levied. However, this abatement is not available on other cost items such as Preferred Location Charges ( PLC), Floor Rise Charges, initial maintenance charges and club house etc. In all these cases service tax is charged at a flat rate of 12.36%. EDC/IDC and lease rent to the extent paid to state government are excluded from service tax liability. Parking charges are exempted from the service tax ambit.

Service tax is payable only on property purchase directly from builders and is not required in case of resale property purchase as there is no service provided.

VAT 
VAT or Value Added Taxes are levied on the sale of goods (movable properties). For any sale to attract VAT, it should involve transfer of goods from a person to another. In case of under-construction properties, the transfer of goods applies to the transfer of ownership rights from the builder to you in the form of a sale agreement. This tax is governed under the ‘works contract’ in the VAT law. However, currently VAT is only applicable on properties bought in select states. For example, VAT is charged at the rate of 1% of “agreement value”in Mumbai and Pune and 5% in Bangalore. There is no VAT on properties bought in Noida-NCR, Chennai and Kolkata.

We hope that you would be clear on the aspects of Service Tax and VAT by now. In case you have any queries, please post it down in the comment box. We would definitely try to resolve them.

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Arrange Furniture To Give A Quick Makeover To Your Home

Even the most beautiful of spaces can look utterly unimpressive if the furniture is not arranged correctly. If you are longing to give your home a fresh look, re-arranging your furniture is the easiest way to give your home decor a new look without a spending a bomb.

So, how do you know it’s time to rearrange? When you find less space to walk around your room, need to push aside chairs and tables or start facing trouble in locating everyday stuff in around the area, it’s time to get serious about a furniture makeover.

Consider flexibility of movement

Besides arrangement of furniture, consider the traffic flow and the flexibility of movement of people when they enter and navigate to other areas. For e.g., if your room has several entrances and exits, make sure people can easily get in and out without awkwardly having to push around furniture.

Assess the situation beforehand

Is it uncomfortable to open your drawer in front of guests or do you topple over furniture to get to your closets? Try to arrange furniture to avoid such discomfort.

Use platform beds that do not block the view

Is your bed partially blocking your window view? A bed that peeks over a window looks odd and blocks light. Make it look better with bottom-up shades which will act as a backdrop and allow light to come in. If you’re feeling ambitious, you can also go for a platform bed which is low enough to fit beneath the window trim. Also, to make it look chic and trendy, install an entire wall of colorful curtains as a fabric backdrop.

First furniture that you notice should be appealing

If a dull looking piece of furniture is the first thing you notice as you enter the room, replace it with something more catchy and welcoming. You may even go for reupholstering a worn out piece of furniture with some colorful fabric and give it an all together new look.

Replace Big Furniture with smaller versions

Big, oversized furniture can be conveniently replaced by smaller substitutes that occupy less space and serve the same purpose. This makes the house look less cluttered and the smaller versions can fit in multiple places, thus allowing you to rearrange your room without any hassles.

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Five Top Tips To Care For Your Art

Decorating walls with paintings is classy, exquisite and more than a little daunting. Here are five things to remember that makes caring for them a piece of cake.

Handling:

The key is to minimize contact with the painting – it keeps dirt and fingerprints away. Always remember to hold your paintings either from the outer edges or the bottom. If your piece of art is exceptionally large or heavy, feel free to call for extra help.

Hanging:

Appropriately sized, sturdy hardware must be used to hang the painting to ensure maximum stability. Be sure to keep the back of the painting from sticking to the wall – this will help reduce the possibility of damage through moisture in the walls and of dust accumulating. Ensure that none of the hardware is pressing into the canvas and that the tension of the canvas surface remains consistent.

Displaying:

While putting your art up for display, remember to pick a space that is away from any source of heat, has a relatively stable and reasonable level of humidity and is away from direct sunlight. Humidity can cause canvases to get fungal while heat and light can cause the paint to fade or dry and flake.

If you intend to light your painting, opt for low energy lights that tend to give off less heat. Also, do not place light directly above or beneath your canvas. It’s always better to choose lighting that does not emit any UV radiation.

Cleaning:

After ensuring that there is no loose or flaking paint, the painting should be dusted using a clean and soft artists’ natural hair brush with a tip between 3.5 and 5 cms. Position the painting on a clean padded surface, held upright and at a forward angle; this will ensure that the dust will fall away. Brush gently first in one direction and then the other. Never use a cloth, sponge or other material on the canvas and make sure that the cleaning materials are always dry or you risk compromising the texture of your painting!

Storage:

The best possible storage space for your art is a cool, dry one with good air circulation. Using packets of silicone gel if you suspect any amount of moisture or humidity is always a good idea. Keep your art wrapped in a material that allows breathing, like light muslin. Keep it away from heat and direct or harsh light. Also ensure that your storage area is not prone to attracting insects or rodents of any kind.

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