Now, don’t you mistake the Real Estate Regulatory Bill to be a panacea for all your property buying woes. But be happy, there may henceforth be fewer ways for smart builders to cheat gullible home buyers.
Here’s a five-point cheat sheet (pun unintended) on how the real estate bill can curb unfair practices adopted by some real estate developers while selling residential properties.
1. Clearances before sale
The bill requires developers to get all statutory clearances and approvals from relevant authorities before launching a property for sale. Developers cannot also collect any money from buyers until all necessary permits are received.
This means, developers will be unable to prelaunch projects (which typically woo buyers with discounts) before all approvals. So far, many builders prelaunch projects so as to collect some money for their working capital and often times delay the actual launch/construction for want of approvals; thereby causing sleepless nights for those who booked the property very early.
2. Nothing super about ‘super built-up area’
The bill will standardize definitions and practices of using terms such as ‘common area’ , ‘carpet area’ and so on. It will also introduce the concept of ‘carpet area’ for purpose of fixing the property sale value.
So far, most of you would have paid a per sq. ft rate on the super-built up area or on any such vague measurement term. That would have included undivided space, wall thickness etc. Often times, 15-25% of the super-built up area has to be discounted to arrive at your actual ‘living area’ or ‘carpet area’.
You can now say goodbye to paying more for less.
3. No rosy picture
The property advertisements on news papers and websites can be expected to be a bit more sober. Any misleading or deceptive advertisements can lead to high penalty or imprisonment of the promoter under the regulations. Hence, builders may think twice before putting down images of that beautiful swimming pool or club house which ultimately turns out to be nothing depicted. Moreover, you will be entitled to get a full refund of your money with interest if such claims turn out to be false. Which is one of the reasons why I ask all the new buyers to check out the custom homes personally, inside and out, before narrowing down and finalizing on the presented offer.
4. Not in advance
Under the bill, a builder cannot take more than 10% as advance without a written agreement. This will not only prevent your money from being locked up but also prevent many cash/black money transactions.
5. Registration of project
Every promoter has to register the project with the regulatory authority before commencing sale. A real estate regulatory authority will be set up in each state. Such registration shall ensure that the plans are clearly laid and are not deviated at a later date.
As buyers, your first step would be to check if the project is registered under the state real estate authority. It would then be easier for you to claim your rights later on, whether on account of project delay or project deviation.
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