Conceptual methodology for the recovery pattern of a housing project

COST RECOVERY

If the quality of material, quality of construct project duration are not maintained or followed as per plan then the cost recovery will be made.

Cost recovery means asking for payment of money for the delaying work, improper quality of construct using materials and labour.

If the repayments are not properly made for the loan and if any delay is caused continuously the cost recovery will be made from the owner the house by the authority issuing the loan.

The loaning authority (loan issuing authority like bank, LIC, or any state govt, or private department grant the loans for housing after obtaining the following documents from the land owner.

The amount of loan sanctioned is then income to them. The loans is divided into three or four installments, after a particular portion of work is completed they release the first installment for this the approved engineer has to give the work completion certificate. Based on the completion certificate, second, third and final

installments are released.

The cost recovery starts immediately a first installment is released the recovery in the principal amount of loan and interest for 10 to 15 years based on the repayment capacity of the house owner.

Normally, the nominees are appointed by the house owner. If anything happens to the house owner the nominee is responsible for repayment of loan.

In addition to the income certificate the money savings, fixed deposited insurance policy or any other property or jewels and valuables etc of the nominee of the house owner are also collected by the loan issuing authorizes like banks etc.

If repayment is made not correctly, the nominee is questioned and the notice be send to both or them. Sometimes the nominee or guarantor has to repay the loan from his savings or income or any deposits or policies or nay property that he has in LIC loan.

If the repayment is completely stopped in that case the property will be sold by the department by publications.

EMI means Equated Monthly Installment

EMI - Loan principal amount + interest in equally paid installment for all months.

LIC - Loan Principal amount + interest + insurance policy amount

The cost recovery includes the principal loan amount, interest, penalty or fine and the court expenses etc.