Cancelling Your Booking and Securing a Refund

Cancelling Your Booking and Securing a Refund

CancellingIn the previous segment of this sequence titled Non-Legal Options When Cancelling Your Booking, we spoke of the non legal options through which you can cancel a booking. Here we will talk on how you can cancel your booking and get a full refund.

Naveen Thomas recently booked an apartment in the city after securing a home loan from a well-recognized bank. However, circumstances were not really in his favour and he found himself in a financial quandary. He requested his builder to cancel his booking and refund his money but was soon faced with several obstacles. As a friend in need of sound advice, he came to me and we discussed his options extensively.

Our first step was to look through his sale agreement to read clearly the clause related to cancellation. In his case, a cancellation meant that he would have to forfeit Earnest Money which was 10% of the total value of the property booked. Besides this, his builder went on to say that the money would be refunded only when he found another buyer for the apartment. The wait for Naveen was an indefinite one.

If you, as Naveen did, decide to take legal recourse, here are some things you need to be aware of:

  • Your lawyer will first issue a notice to the builder to make the refund within the stipulated time in the sale agreement. If this period is crossed, your lawyer will file a suit for the recovery of your money.
  • You can file for the recovery of money with a civil suit or file a consumer case for recovery of money with interest. A civil court case is time consuming and you are liable to pay a court fee. A consumer court may get your redressal quicker.
  • Besides this, in a consumer court case, you are also eligible to file for interest on your booking amount as well as monetary compensation for the distress you have undergone.
  • If you have paid stamp duty, registration charges, VAT and service taxes during the course of your transaction, you will not be able
    to claim a refund on this.
  • Ensure that all correspondence between the builder and you in relation to a refund is completely vetted by a lawyer.

You have to understand that legal recourse can take a long while and even then you will receive your money only after deductions have been made. To avoid getting into a sticky situation as far as cancellation and refunds are concerned, you will need to keep some pointers in mind:

  • Read the sale agreement multiple times and have it vetted by your lawyer. Make sure that you understand the cancellation clause clearly.
  • Consider your decision to cancel your booking thoroughly. You will need a good reason to file for a refund if the builder has maintained his part of the deal. Financial trouble is an understandable reason.
  • Do try and consider all non-legal methods of recovering your money.
  • Speak with other others of apartments to see how they fare and where they stand.
  • Always ask for a clearly defined cancellation clause.
  • Never pay by cash and always ask for a receipt for the complete money paid.

Consider going the legal way only if you have exhausted all other means of securing a refund. Always have a good lawyer by your side.

Take-aways

 

  • You may file a civil suit or a consumer case against your builder.
  • The case may be long drawn and you may still have to absorb some deductions.
  • Financial distress is an understandable reason when asking to cancel a booking and securing a refund.
A Feng Shui-Based Colour Scheme for Your Home

A Feng Shui-Based Colour Scheme for Your Home

Feng ShuiA friend was recently doing up the interiors of her already vaastu-compliant home. But as with all new home owners, she wanted to know if there was something more she could consider doing for it. Feng Shui (pronounced ‘fung schway’); the Chinese equivalent of vaastu was something she began looking into. If you are unsure of the art form, here are some thoughts I believe you may like to consider.

The Premise of Feng Shui

The foundation of Feng Shui is based on the principle of people getting affected by their surroundings in positive and negative ways. It is an ancient Chinese art where you manipulate and organize your surroundings in such a way that it attracts positive life energy, or chi, allowing it to flow unobstructed through your body and environment.

When you decorate with Feng Shui you work on the movement of energy and unblocking of areas so that energy is able to move in a balanced manner around your entire home. There are a number of Feng Shui décor pieces that can be used for this such as decorative mirrors, water bodies, plants, colors, sound, smells and more.

When you are taking Feng Shui principles into consideration, make sure that they correspond to the Bagua which is a set of 8-diagrams related to Taoist cosmology and are a color scheme that you will need to work with. For example, when it comes to wealth and family, you will need to include elements of wood in your décor such as plants with broad healthy leaves.

Using blue wallpaper and carpeting or soft furnishings is a good idea as they are representative of water and water nourishes wood. Using fish in Feng Shui, as a decorative element, is symbolic of wealth.

Fame and reputation are represented by fire, which of course doesn’t mean that you set the place on fire. Rather, including a touch of red would be nice. Using red and fire elements will bring you luck and recognition.

You could use a warm peach or maroon shade on your wall and have decorative furniture with shades of red. Tone the colors down as per your requirement as they don’t really need to be all that bright. Use multiple light fixtures such as floor lamps and decorative candles.

Consider natural crystals, terracotta and tiles in your décor to encourage better relationships and enhance your knowledge areas. These are representative of the earth element in Feng Shui. Hues of orange, yellow, and browns will work ideally. Mixing fire elements with earth will give your décor an added punch.

Including metal chimes is good for children and for enhancement of creativity. Wrought iron is a great choice. In Feng Shui, it is believed that gold and silver bring good fortune as well. For rooms related to this, use white or metallic colors and include a few earthy tones. Always have music of some sort playing in the background.

The area in your home where you work out of, may be characterized by a small water body. Too much water is representative of flooding. Have a small water fountain or an aquarium near you. Add in a painting of a water scene as well.

Decorating through Feng Shui principles is all about feeling the space and following a few basic Feng Shui ideas. You will then have a home that becomes a pleasure to live in.

 

Take-aways

  • Feng Shui is the Chinese version of Vaastu.
  • It works on the principle of good energy or chi.
  • The premise of Feng Shui is the Bagua which is a set of 8-diagrams related to Taoist cosmology.
  • Different decorative elements may be used to enhance the energy of your home.
Gift Your Family a Secure Future with Home Loan Insurance

Gift Your Family a Secure Future with Home Loan Insurance

home-loan-insuranceUnexpected late night phone calls always carry a sense of foreboding.

When I received the call that my younger brother (in his early 40s) was hospitalized for a minor heart attack, I was understandably shocked. Here was a man, with a young family, good job, who had recently invested in a luxurious home, now lying supine in a hospital.

Of course, being young and overall healthy, he sprung back up pretty soon. With stern instructions from the doctor, he got back to his routine and took the trouble to reduce the stress in his life. But one of the first things he asked me when he got better was, “What will become of my family if something happens to me. I don’t want them to be financially burdened with this new home; what can I do?”

I was quite surprised that my brother had not opted to include home loan insurance as a part of the deal. Of course, he did get an admonishing from me on trying to cut corners, but I followed it up with advice on why this should be a New Year gift to his family!

What You Should Know About Home Loan Insurance

  1. The insurance is for the loan and not for the home and its contents.
  2. This insurance covers the family’s liability to pay EMIs if something happens to the principal borrower – you.
  3. If availed of – this insurance will cover all future EMIs that need to be paid. Some insurance providers also have a provision where the principal amount is returned to the family to make their future more secure.
  4. The cost of home insurance will decrease each time based on the amount paid to the bank.

Main Criteria on Which Premium is Arrived At

  1. Your age – the older the applicant, higher the premium.
  2. Your loan amount – higher the loan, higher the premium.
  3. Your loan tenure – longer the repayment period, higher the premium.
  4. Your overall health – Since my brother had a heart attack already, he will be considered a high risk and will have to shell out a higher premium now. If you are healthy, this will not be a concern.

Questions to Ask Your Home Loan Insurance Provider

  • Is the insurance applicable for death by any cause or only by accident?
  • How easy is the claims process?
  • Does my home loan amount have to be of a certain amount?
  • Can the EMI be paid in installments?
  • What are the exceptions?
  • Is a health check-up mandatory?
  • What happens in the case of pre-payment of loan?
  • Are there tax benefits?
  • Are there any implications if the loan is a joint one?

With these considerations, my brother has already got his home loan insurance taken care of. This New Year is going to be a much secure one for his family. Perhaps, its time you ensure the same for yours.

Major Take-Aways

  • Home loan insurance is often optional, but you must take it.
  • Home loan insurance covers the loan and not the home.
  • Some providers also give your family additional monetary benefits.
  • Home loan insurance premiums may be paid in installments or at one go, but there are implications with both.
Earn Well from Your Property – Play Your Cards Wisely

Earn Well from Your Property – Play Your Cards Wisely

Annual-Value-of-House-PropertyFor those of us with a remote understanding of investment in real estate, one thing is very clear – there will be steady appreciation over the years and it is a rock solid investment.

Based on these two facts, you may be under the impression that property will get you instant returns. Unrealistic expectations are a common mistake made by most investors. Real estate, just like any other asset form has its ups and downs. You have to make certain smart decisions to make the investment work well for you.

Here are a few common mistakes committed by novice real estate investors

Not understanding the market

If you are looking to invest in real estate purely to sell or to earn rentals, then you should have a clear understanding of the market. Look for places where the demand lies and see if you can find a property to leverage this demand.

Being unrealistic

What many real estate investors fail to understand is that real estate is not an overnight money spinner. If you are renting out the space, your gains will increase over the years, with the annual increase in rents. You will also earn interest on capital based on the deposit amount with you.

As far as sales go, a home will not show you a substantial appreciation for at least 5 years after it is bought. If you are looking for instant high returns, then banking solely on real estate may not be the way to go.

Now if you have investment in residential real estate, here are a few ways to earn on your investment:

1.Rentals

Of course renting out your home will be the first means of earning from real estate. Be sure to have competitive prices that are in keeping in the prevalent rates in the locality. Also keep in mind the rentals will vary based on location and proximity to amenities. You may use the rent to pay your home loan EMIs each month or avail of the 5% to 6% returns you get on it, each year, exclusive of taxes.

2.Leases

You may consider a company or an individual lease. Handing over your property to a corporate is a good way of ensuring a fixed income and having your space looked after by responsible entities. The paperwork is always in order as are all legal requirements. You may also consider the same with an individual tenant. It ensures that you have a long term tenant and are prepared to look for another when the time comes.

3.Short term guest house

If you plan to use the house on occasion, then you may consider renting it out as a guest house, perhaps with domestic help included, to short term tourists. Alternately, you may also consider the popular option of running a paying guest establishment.

4.Service apartment

If you plan to use the house on occasion, then you may consider renting it out as a guest house, perhaps with domestic help included, to short term tourists. Alternately, you may also consider the popular option of running a paying guest establishment.

There are several ways to earn a profit from your real estate asset. The key is to remain realistic about your expectations and give your asset time to grow and appreciate in value. Diversifying your investment portfolio into other assets helps.

Main take-aways

 

 

What You Really Pay for When You Buy a Home

What You Really Pay for When You Buy a Home

B7-Hidden-costs-of-owning-a-homeBuying a home is a serious decision.

While you may be satisfied with the fact that you are paying a monthly EMI towards your home, there are several charges that go into the purchase of your home that may not be clearly discernible in the beginning.

 

These may catch you unawares and may derail your financial situation. A commonly known break-up of costs involves:

  • Stamp duty
  • Registration
  • Property tax
  • Service tax
  • Cost of furnishing
  • Miscellaneous charges related to parking, club house, maintenance, society charges and the like.

However, there are several other charges that add on to the basic value of your home that you need to be aware of:

When Buying Your Home From A Builder

Tax Deduction at Source (TDS)
Many home buyers are unaware of this charge that is a part of buying a home. If the value of the property exceeds Rs 50 lakh, you are liable to pay 1% of the value of the property in the form of tax. In this case, Rs 50,000.

Floor rise

Most high rises charge you a premium for each floor, going all the way to the top. This gets added to your base price. It is a price that varies depending on where the apartment is located, the floor of your choice and even the direction it faces.

These additions may be in 2 or 3 digits per sq foot and has to be discussed with your builder.

Cost Escalation

Most agreements include a cost escalation. Should the price of raw materials such as sand and cement increase, the builder reserves the right the increase base prices accordingly.

This is a cost you have to look for and understand in your agreement.

When Buying your Home from an Existing Owner

Brokerage fee

If you have hired a broker or a brokerage firm to help you find your home, you will have to pay him/the company a percentage of the transaction cost. This is a cost that is negotiable.

Transfer charges

Every large apartment complex has a society which functions on the basis of certain rules. When you buy an apartment from an existing owner, the society will charge you a transfer fee.

This will be decided by the general body and ranges between 2% – 5% of the total value of the property.

Fees Applicable to Both Forms of Purchase

Valuator fees

If you are planning on investing in a built-up bungalow you will need to factor in the fees of a property valuer which varies depending on your location. It generally begins around Rs 20,000 per property.

Legal fees

All papers related to your property must be vetted by a lawyer, irrespective of the reputation of the builder you may be dealing with. At this point you will incur expenses for a lawyer and a notary authority.

This will of course come at a price that has to be worked out in advance.

Moving costs

Whether you are moving from your rented home to your new one or one city to another, moving costs are going to be involved.

This will depend on the service you hire, the distance you cover, the floors that you are moving too, etc. Shipping charges may be added if you are moving across different cities.

Utility connection charges

Utilities such as water and electricity, as well as generator charges, etc will now be applicable to you. These are prices you will need to factor in as soon as you move in. In some cases, you may have to start paying it even before you move in.

These charges are not really hidden but rather are often disregarded as miscellaneous costs. Put together, they tend to add up to quite a bit and will make a significant difference to the final amount that you will be paying for your home. Do take these into consideration when planning your finances.

Top Takeaways

  • Costs often disregarded as miscellaneous tend to add up to a sizable amount. Include every expense incurred.
  • Cost such as transfer charges, cost escalation and moving charges are subjective. You will know the price you are paying only on enquiry. It is best to ask.

 

5 Simple Interior Design Features to Make your Home Look Bigger

5 Simple Interior Design Features to Make your Home Look Bigger

Own a home, but are unsatisfied with the size? While you may not be able to make a physical difference to the dimensions of your home, there are a few interior designing tricks that you may use to give our homes the feel of a bigger space.

Shubhada Ravindra, a city-based independent architect elaborates on 5 interior design features applicable to any type of home that needs to appear bigger.

1. Paints for your home

Always go in for a lighter palette of colours. Pastel shades help reflect sunlight or lighting in your home, making your space look brighter. This alone gives the illusion of your home being bigger than it is. Shades such as cream and white work really well on walls and ceilings.

If you would like to use textured paints on your walls, it would be best to stick to a neutral approach. For example, if you have a light blue shade on your wall, a texture is best added in a shade that is perhaps just a tone or two darker. Never go in for contrasting colours as this shrinks your space visually.

2. Flooring

The same principle of lighter shades applies to your flooring as well. Marble and vitrified tiles, available in a range of colours, make a world of difference to how big your home looks. Their muted presence does not draw attention and this gives the space a bigger feel.

3. Natural Lighting

As far as possible opt for wall mounted lamps in all your rooms. If your home is still in the architectural stage, then it would be ideal to have taller windows installed. Do note that taller windows are better than wider ones. Alternately, you could consider installing skylights in your home that bring in daylight. This gives your home an expansive look.

What is important is that you do not use heavy curtains on your windows. Sheer, lacy ones give you the privacy you need, while letting in all the light.

For the nights, invest in spot lights that are upturned on the wall. This bounces light off your wall, onto your ceiling and down below in muted tones. Besides the ambient lighting, if enhances the look of a space.

4. Accessories

Mirrors are great accessories to use in a small home. In a living room, place this opposite a wide window and it will reflect the outdoors. This makes a brilliant way of expanding the look of your home. If the window looks out onto a garden, then you have an added aesthetic feature to your home. If you are in an apartment, you may consider creating a planter garden on your windowsill to get the same effect.

Try to avoid covering your floor unless absolutely necessary. If you must, avoid carpets, instead use dhurries.

5. Furniture

Minimal furnishing is ideal for small space. Consider investing in nesting tables. You could also consider multi-purpose furniture, like a chest for your centre-table that also has storage space in it.

As far as possible make sure that all your bulky furniture is the same shade as the walls that it is stacked up against. If you happen to have an armoire that you would like to put up against the wall but it is of a darker shade, do try and have it painted to blend with the wall. Restrict the size and number of furniture you have in your home. Avoid cluttering to ensure your home looks big. Reduce the number of knick-knacks you have on display.

When you are looking at seating options, ensure that anything you choose has the arms and legs exposed. This makes the piece of furniture seem less bulky and it will take up less space in your home visually. If you must have a centre-table ensure it is in glass and one can see the floor through it.

In your bedroom, let the bed continue to be the focal point. Instead of side table, opt for foldable shelves. If your bedroom also serves as a working space, have a foldable study that you may also double up as an ironing table.

Giving your home an expansive look is easy enough if you follow a few of these simple tips. Go on and make your home the envy of all.