Joint families, even nuclear ones, can join hands with builders to raise multiple units on their old houses in the capital. The builder retains one flat and makes over three to them and gives them some money too! VIVEK SHUKLA writes

    Neeraj Mahajan, a banker, was in tears recently when he visited East Patel Nagar to attend a social function. He could not resist visiting the lane where his family had a house which they sold off nearly ten years ago. When he saw the name of his late father still inscribed on the gate of his former house, tears welled into his eyes. A crowd of memories swarmed his mind — his joint family used to live there once when they were beset by financial crisis and forced to sell the house. 

    However, if the family of Neeraj were to have been living there now, they could have generated enough money for a comfortable living and stay there too. The family could easily join hands with some builder who would build flats or floors there and also pay them a handsome sum. This is the trend in the capital these few years. 

    "Unlike property owners in other metros, all those who have properties in the capital are very lucky. They are in a position to unlock them in a big way. They just join hand with some realtor who is into developing residential properties," says Samir Jasuja, CMD of PropEquity, adding, "There are a large number of people who do not have regular income but live in properties worth several crores. They are now collaborating with builders not only to retain their property but also to earn some extra money." 

    This dilemma of a houseowner who owns a priceless asset that isn't getting him returns is a classic one in Delhi, where value of real estate has quadrupled in the last few years. Till recently, you had to encash the entire property if you needed funds since laws only permitted two and a half storeys. Now that the law allows four storeys, plus basement and a stilt-level parking, you can unlock the huge value of your asset without displacing yourself to some faraway suburb. You can join hands with a builder. 

    He undertakes construction of the building, keeps one floor, and the houseowner continues to own 75% of the property - which consists of the basement, stilt-level parking and three floors. The builder also pays a substantial cash amount. At the end of it, the homeowner has the luxury of continuing in his own home in familiar surroundings, on three brand-new floors and a basement plus car parking space for 6-8 cars within the property. 

    According to Sanjay Khanna of Kailashnath projects Pvt Ltd, "When I meet somebody who is planning to sell his/her house, I always discourage him. I tell them that if they sell the property they would face lot of issues to settle. Hence, it is better to unlock their property. It would serve their cause in every possible manner," adding "I recently met an old doctor couple living in a sprawling 1000 yard bungalow in Greater Kailash 1 for the last 30 years. The estimated value of their property in today's market is Rs 45 crores. 

    They've been contemplating selling it for some time, since they need to clear a Rs 6 crore bank loan. The idea was to find a 500 sq yard plot in GK1 itself (Rs 20-25 crore), pay off the loan, spend part of the money on setting up their two children (3-4 crore) and live off the remainder, still a substantial amount at Rs 10 crore. 

    They found a buyer, took a bayana of Rs 30 lakh, and ironically enough, deeply regretted it, almost immediately. They were wracked with doubt and began questioning their decision to sell within 24 hours itself." 

    Realty experts say that sellers should keep in mind that when they sell their property and buy another, they have to pay a broker's commission twice, for both transactions. The commission you pay varies between 1-2% of the cost of the property. 

    Then there's a 6% stamp duty for every property transaction, so when you sell the buyer pays stamp duty, but when you buy you pay the entire stamp duty. By the time you wrap up the deal, you could have lost as much as 5-10% of your gain in money. And, in case you want to buy another property with the proceeds of the sale you could end up losing as much as 10-15% of the value as transaction costs in the entire process. 

    Apart from this financial setback, there's the ephemeral but very real emotional loss that comes with selling a house that's been home for decades. "Many a time, I find that people are overwhelmed at dealing with the huge cash component in property transactions and they have also grossly overestimated the amount they need to live by," Sanjay Khanna says. 

    Narrating his own experience of unlocking his huge Rajouri Garden property, noted Hindi and Punjabi poet Pratap Sehgal said their 300 sq yard house was built in the early 60s. He was not in a position to redevelop it due to paucity of funds. "Then I talked to various realty firms who are into developing residential properties. After a lot of ground work, we zeroed on one developer with a proven track record. He built some floors on our house, kept two for himself and gave everything to us along with some big cash component as well. We are happy with this arrangement," Sehgal says. 

    Jasuja says that as the value of real estate has doubled in the last 15 months and continues to shoot up year on year, bungalow living is bound to become a thing of the past in Delhi. People are questioning whether they should be living on property worth so much. Now that property is easily divisible, the older generations are keen to build flats upon it to prevent property disputes that could arise amongst their legal heirs in the future. The property, once developed, is much more valuable, and far more liquid, if you still eventually want to sell. 

QUICK BITES 

    YOU CAN JOIN HANDS WITH A BUILDER. HE UNDERTAKES CONSTRUCTION OF THE BUILDING, KEEPS ONE FLOOR, AND THE HOUSEOWNER CONTINUES TO OWN 75% OF THE PROPERTY - WHICH CONSISTS OF THE BASEMENT, STILT-LEVEL PARKING AND THREE FLOORS