Design credits: Vishnu Madhav
There’s always the fear of being short changed – either in terms of quality, hidden costs or recurrent delays in possession date when it comes to buying a property. The glossy brochures, showcasing royal facades and landscaped gardens could very well be a trap where the builder magician casts a vanishing spell on your money. The Real Estate Bill seeks to provide some relief for buyers.
The Real Estate Bill was cleared by the Rajya Sabha, the Upper House of the Parliament, on March 10th and is on track to morph into an Act. It requires all builders to register their projects with the Real Estate Regulatory Authorities (RERAs) in their respective States.
Tribunals called Real Estate Appellate Tribunals would also be set up at the state level where decisions made by RERA can be appealed. A maximum of 60 days has been set for Tribunals to settle a case.
Additional Reading: A Brief Guide To Investing In Real Estate
Read on to know how the bill is expected to benefit home buyers by keeping dubious builders under check.
Safety Net: The first check brought in place is to ensure that all builders obtain the requisite permissions and documents from the authorities concerned before setting up shop. Builders have to provide RERA all details on the project, including layouts, schedule and date of completion among others. In addition, builders also have to share with RERA and on their own website details of their past projects from at least the last five years. This check is sure to calm the nerves of home buyers.
Get Even: Up until now, buying-selling agreements were lopsided and in a manner that hurt home buyers more than home sellers. Delayed payments by the buyer would invite additional interest and builders could always rake-up additional charges to boot. But, with the bill in force, home sellers will also be liable to make payments towards the buyers if there is a delay in project completion. Wrapped into the bargain is the condition that buyers will need to secure votes from at least 2/3 of the buyers if they wish to make changes to the project plan midway. Now, doesn’t that sound nice!
Money Penny: Developers regularly cite lack of funds as a reason for project delays. Money from a well-funded project is often funnelled into a weaker one. This leaves buyers who have been responsible with payments in somewhat of a quandary. The bill is designed to mitigate this flaw. Builders will be required to stow away 70 percent of funds collected from buyers for a given project in an escrow account. So the next time you are given the excuse of funds drying up, think of Money Penny.
Super Vs. Carpet – Area Wars: Does the broker, who is on first name basis with the builder, confuse you with costs for super built-up area, carpet area, common area and many other unnecessary areas? Don’t panic! Builders will have to provide clear numbers on the carpet area, which is limited to the area of the apartment you are buying in a building. In contrast, super built-up area totals carpet area plus the common area. This break up will help you evaluate just how much you would have to pay to buy that apartment.
Hoodwinked?: Did you fall for one of those life-sized billboards advertising sprawling apartments with all those snazzy amenities and all within arm’s reach of the city centre? More often than not, you are likely to feel cheated if you base your purchase decision on advertisements like these. The property you finally get – not quite like the European village portrayed in hoardings now, is it? The Real Estate Bill has a solution for this too! Dressed up advertisements are punishable as per the Bill, to up to 10% of the total project cost and even jail time for builders.
Pre-launch can be a boon or a bane to home buyers. It all depends on the builder. Following the implementation of the bill, builders will not be able to sell apartments at throw away prices under the banner of pre-launch. Not until all the approvals and permissions are obtained. Another safety check done.
I just made the down payment on my house
The bill is all-encompassing. It covers even those of you who have purchased a house and are now grappling with inefficiencies such as incomplete or delayed projects.
So shrug off those worries and get yourself a sweet home deal. Meanwhile, let us help you with the loans.