Despite the rule, developers are charging transfer fees

The Maharashtra government had ruled in August 2006 that developers have no right to charge transfer charges on a flat till a cooperative society is formed. However, this notification is being openly flouted

The housing department of the Maharashtra government had passed an opinion in August 2006 stating that a developer has no right to recover transfer charges at the time of sale of a flat by the investor till a cooperative society is formed. But it is an open secret that most builders are blatantly violating the rule and are charging Rs1,000 (or more) per sq ft as transfer fees.

"The Maharashtra housing department has passed the notice long back but builders are not following it. The issue has remained in the industry since a long time but the official authorities are not taking action against such wrong deeds of the developers," said Vinod C Sampat, advocate and proprietor, Vinod C Sampat and Co.

He further added, "There is a lack of transparency, developers are collecting the transfer fee. This is a way of extortion."

Transfer fee is a one-time payment made to the residential cooperative society when there is a case of transfer of ownership. However, the society can be registered only when 60% of the flats are sold. A ceiling of Rs25,000 has been fixed by the registrar of cooperative societies as transfer fee while local developers have been charging as much as Rs1,000 per sq ft. This is an illegal act being carried out by builders.

Property prices are sky-high in Mumbai-on the top of that, developers are charging such a huge fee for transferring the ownership of the flat. Currently property prices in Worli (central Mumbai) range between Rs26,000 per sq ft to Rs37,000 per sq ft while in Lower Parel (central Mumbai) and Bandra (suburban Mumbai) they range between Rs18,000 per sq ft to Rs23,000 per sq ft.  

"If builders charge a nominal fee of Rs25,000, it is fine because it involves an administrative cost, but to charge a certain sum per sq ft is not fair," said Pranay Vakil, chairman, Knight Frank (India) Pvt Ltd.




6 years ago

Good article exposing builders on this front. I have been told that even reputed builders such as Hiranandani charge Rs. 500/- per sft for transfer before society is formed. If this is illegal, the author of the article should also guide readers how and where to lodge a complaint. A good article is one which exposes a wrongdoing in the society as well as also guides to fight the menace. Then leave it to the readers whether they want to fight against the evil or not. Hope the point will be taken in the right spirit and in future all Moneylife articles exposing wrongdoings will also show a path to resolve it.

SBI to raise Rs20,000 crore via rights issue

The proposal is still at the conversation stage with the government and may come up towards the end of the current fiscal

The country's largest lender State Bank of India (SBI) today said it was planning to mop up Rs20,000 crore from rights issue by this fiscal end, reports PTI.

"We are expecting to raise Rs20,000 crore from rights issue," SBI chairman O P Bhatt told reporters on the sidelines of a CII event in New Delhi.

He said the issue may come by this fiscal end since the bank is currently talking to the government about it.

"It is still at the conversation stage (with the government). That is why, if at all it comes up, may be it would be coming up towards the end of this fiscal," Mr Bhatt said.

On the liquidity in the system, SBI said it will remain tight in June due to payment towards third generation (3G) spectrum auction and expected outgo for broadband wireless access (BWA).

However, the liquidity position should ease by next month, he said.

Over Rs67,000 crore was paid by telecom operators for spectrum for third generation telephony. The BWA auction so far will lead to cash outgo of Rs34,000 crore.


SKIL Infra plans to invest up to Rs5,000 crore in the logistics segment

The Nikhil Gandhi-promoted entity has planned investments of around Rs5,000 crore in the logistics segment in the next five years

SKIL Infrastructure Ltd (SKIL Infra), which plans to come out with a public issue soon, is looking at investments of up to Rs5,000 crore in the logistics segment in the next five years. The group plans to emerge as a complete door-to-door multi-modal logistics company.

"We were the first private players in the Indian railway arena and now we plan to become a multi-modal logistics firm providing complete door-to-door services," said Nikhil Gandhi, group chairman and executive chairman, SKIL Infrastructure.

The group was responsible for the first public-private project with the Indian Railways involving conversion of metre gauge to broad gauge.

The group plans an investment of around Rs1,500 crore to Rs2,000 crore in the next three years for horizontal expansion in the logistics segment. Going forward, it also envisages scope for vertical expansion investments of up to Rs3,000 crore.

"Horizontal and vertical (expansion) put together, there is an opportunity to invest up to Rs5,000 crore in the next five years," said Mr Gandhi.

Currently, the group is developing logistics facilities at two locations-Navi Mumbai and Jhansi. The facilities are being developed on the hub-and-spoke model. In the next five years, SKIL plans to have around 60 such hubs all over India.

Apart from developing these hubs, the group is also actively looking at the new rail freight privatisation schemes announced last week. Indian Railways had announced entry of private players in the freight terminal and train operations business through two schemes-PFT and SFTO. The private freight terminal (PFT) segment will allow private players to operate rail freight terminals, while the special freight train operator (SFTO) scheme facilitates private players to own and operate freight trains for movement of certain commodities. SKIL is closely pursuing both these schemes.

Mr Gandhi is optimistic over the growth prospects in the logistics segment.
"In the next ten years, this sector will grow from $80 billion (currently) to a market of $200 billion to $300 billion. There will be only 10 to 15 large players who will occupy around 90% of this space. Experience will help us become a strong player," he said.

The SKIL group soon plans to raise around $300 million through the initial public offer (IPO) route. A few months back, the group purchased a significant stake in Pipavav Shipyard from engineering giant, Punj Lloyd.

The group also plans huge expansions in the power and port sectors. Mr Gandhi in one of his earlier interviews (see to Moneylife had detailed plans for setting up thermal power capacity of up to 1,320MW. The company also plans two ports, one each on the western and eastern coasts. This infrastructure group is looking at partnerships with international players for its expansion plans.


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