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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Thank you Vidya. Nice article.
Usually people talk about bills but your article empowers an individual with knowledge of what is there in the bill. We can educate more people and we demand those basic information from builders henceforth.
Thanks a log again.
Hello All,
Sorry to say this, but India is full of Laws and Bills (which will/shall benefit mango man), None followed or say loop holes revelaed.
Each and every point i read, i can think of many a ways to bypass them, so what about the builders….
Nice Bill from Indian Govt and Nice explaination too from Vidya.
Thanks,
Aam Aadmi.
Thank you Vidya. Nice article.
Usually people talk about bills but your article empowers an individual with knowledge of what is there in the bill. We can educate more people and we demand those basic information from builders henceforth.
Thanks a log again.
The real issue is that of corruption. Even today there are lots of good laws, but when it comes to implementation, then the builders bribe the authorities to get whatever they want. There is no fear of law so the builder knows that he can get away with anything. There is lot of scope for preventing black money in real estate if the authorities do their job honestly. But here again they are supported by politicians in their corrupt acts because all the corruption money accumulated by politicians which is basically black money finds its way into the real estate.
The article is informative though…thanks.
Unless strictly implemented, these rules will also serve the same purpose which all other rules do in India – a stick to beat up people current government doesn’t like. with the likes of Vadra, Hooda etc so cosy with the builders, Elections 2014 approaching fast, there is no way builders have to fear anything. Civil matters are known to drag on for ages in India. So builders will be happy to take your money, thank you, and let you frequent the courts. Or take my case, where the builder charged interest for a payment which they sent a notice a month late. While I protested, interest kept going up. when i sought explanations, I was told to come to builder’s offices 30 km away, on a working day. I paid up.
Best protection is still prevention. Do some due diligence to ensure you do not get entangled in a messy situation.
Unless strictly implemented, these rules will also serve the same purpose which all other rules do in India – a stick to beat up people current government doesn’t like. with the likes of Vadra, Hooda etc so cosy with the builders, Elections 2014 approaching fast, there is no way builders have to fear anything. Civil matters are known to drag on for ages in India. So builders will be happy to take your money, thank you, and let you frequent the courts. Or take my case, where the builder charged interest for a payment which they sent a notice a month late. While I protested, interest kept going up. when i sought explanations, I was told to come to builder’s offices 30 km away, on a working day. I paid up.
Best protection is still prevention. Do some due diligence to ensure you do not get entangled in a messy situation.
Hello All,
Sorry to say this, but India is full of Laws and Bills (which will/shall benefit mango man), None followed or say loop holes revelaed.
Each and every point i read, i can think of many a ways to bypass them, so what about the builders….
Nice Bill from Indian Govt and Nice explaination too from Vidya.
Thanks,
Aam Aadmi.
The real issue is that of corruption. Even today there are lots of good laws, but when it comes to implementation, then the builders bribe the authorities to get whatever they want. There is no fear of law so the builder knows that he can get away with anything. There is lot of scope for preventing black money in real estate if the authorities do their job honestly. But here again they are supported by politicians in their corrupt acts because all the corruption money accumulated by politicians which is basically black money finds its way into the real estate.
The article is informative though…thanks.