News & Notes 637:Housing Service & Board Questions & Answers (part 1)
Housing Service & Board Questions & Answers (part 1)
In Auroville, all assets (houses, public buildings, commercial units, etc.) belong to the Auroville Foundation, therefore we do not use the terms ‘buy’, ‘sell’ and ‘own’.
Question: Can I buy a house in Auroville?
Answer: No, you can make a donation for an existing house, and a House Transfer Agreement (HTA) will be prepared between the Housing Service, the previous steward and you as a new steward. The terms and conditions for the donation are mentioned in the HTA.
Q: Once that has been done, do I become the owner of the house?
A: No, you become the steward of a housing asset.
Q: Can I sell my house?
A: No, you can put your house up for transfer and the Housing Service will publish it in the News and Notes. The names of the candidates will then be sent to the community for feedback and to identify the selected candidate. The funds received for the transfer will go to the Financial Service and be used as donation for your future house.
Q: How is the value of an 'old' house calculated?
A: A certified valuator will come and visit your house. He will look into all the details (materials, building technique, year of construction, quality, and grade of the finishing) and, accordingly, a value per SQM plinth area will be proposed, based on the PWD Tamil Nadu criteria, with a depreciation of 1 % per year. The value for the infrastructure, parking, electricity and plumbing will be added to the value of the asset. The valuation done for old houses is generally low, compared to a new construction.
Q: What happens when an Aurovilian wants to move to another location?
A: If the other house is approximately as old (and depending on how well it was maintained), the transfer will be done without much difference in the value. However, if the steward will move to a new project, there will probably be an important gap and the difference of price will have to be covered. The value of the old house (estimate by the registered evaluator) is not raised to fit the price of the new house.
Q: Is this valuation final?
A: The steward can question the valuation, at which point the arguments will be conveyed to the evaluator and a request will be made for a revised evaluation. If the arguments are valid, then the evaluator does cooperate and proposes a revised evaluation. In an exceptional case, if the steward still does not agree, then a second and final one can be organized with a second valuator.
Q: How is the value of a new housing asset calculated?
A: A financial chart provided by the project holder shows how the final price has been fixed. At first, a preliminary cost will be presented, and later on – during the tender process – a final Bill of Quantities (BoQ) and final price will be communicated to the donor.
Q: Does the project holder make any profit?
A: No, a new house is transferred at cost price. The price of the land is not counted as it already belongs to the Auroville Foundation. However, running expenses of the project holder may need to be covered in some cases. Architect fees and various specialists for plumbing and electricity fees will be included in the cost; this is shown in the break up in the financial chart.
Q: Is it possible to freeze the value of a house at its original price?
A: If the BoQ is done properly with all the working and structural drawings, then a proper value can be given and a percentage for the contingency can cover the inflation. In that case, the value can be frozen. Some project holders can do this, others not.
Q: Can the transfer be done via outside-Auroville banks/accounts?
A: No, the integrality of the donation has to be transferred through the Financial Service. The financial Service will give you the bank details and how to do the bank to bank transfer.
Q: Does the transfer happen though the Housing Service?
A: The Housing Service does not deal with money, but acts as the administrative interface between the parties (previous and new steward) to get the valuation of the house done, to prepare the House Transfer Agreement, and to make sure that the financial transaction is done properly via the Financial Service.
Q: Is it possible to pay the steward directly based on a value provided by said steward?
A: As explained above, the valuation has to be organized by the Housing Service and is done by registered professional evaluators. The steward cannot decide what the value of the house is. Any direct transaction between the steward and another person is considered as illegal regarding Indian law and can lead to very negative consequences. In such a case, stewardship will not be given for the asset. Therefore, the usual procedure must be followed: valuation, financial transaction through the Financial Service and agreement with the Housing Service.
Q. What does the tax of 9% correspond to?
A: This is not a tax, but a fraternal contribution. This is how this percentage is calculated:
- 6.5% for the Housing Service
- 1% for the Land Board
- 1% for the Financial Service
- 0.5% for l’Avenir d’Auroville/Town Development Council (TDC)
Q: What is the Housing Service contribution used for?
A: The fraternal contribution is immediately used for grants for other Aurovilians. This contribution basically comes from a person who can afford to make a donation for a house for others who have less means. We do not have any other source of funds to directly help others in need.
Q: How many people receive grants through the fraternal contribution?
A: As it is published in our annual financial report, 17 persons have received a grant for a total amount of Rs. 27 lakhs during the financial year 2014/2015. At present the grant has been increased to Rs 2.5 lakhs for singles and Rs 3.5 lakhs for couples. This help is much appreciated for those who have less means to renovate or extend their existing house, or to partly help to build a new house or become a steward.
Q: How many times is this fraternal contribution paid?
A: It is paid only once: if a person has already paid one time and wants to shift to another place, it does not need to be paid again. Except if the value of the new house is much higher than the previous one, in which case another fraternal contribution is asked.
Q: Is there any other financial help?
A: Recently, the BCC has started releasing 16 lakhs a year to the Housing Service towards housing for youth, which is also greatly appreciated.