A major amendment is the proposed parity in the interest payable by allottee and developer in case of any default by either party.
NEW DELHI: The government is clearing the decks for passage of the crucial real estate bill in the forthcoming winter session of Parliament. The urban development ministry has accepted all the amendments proposed by a parliamentary committee and is readying to move the amended legislation for Cabinet approval and finally push it through Parliament, officials said.
The ministry’s move comes after an informal Group of Ministers examined the Rajya Sabha select committee’s report on Real Estate (Development and Regulation) Bill and decided that it would be politically correct to accept all recommendations and push through an acceptable bill. A major amendment is the proposed parity in the interest payable by allottee and developer in case of any default by either party. At present the scales are tilted heavily against the homebuyers.
The developers pay only 2-3% interest in case of default on their part but the consumer pays 16-18% interest for his default. The committee said in its report: “The interest rate payable by the promoters as well as by allottees shall be same in eventuality of any default by either of them.” The select committee not only reinforced the penalty provisions of up to three years’ imprisonment proposed by the government but also introduced imprisonment clause for a realtor failing to abide by the orders of the appellate tribunal
ET view: India needs a real estate regulator
A regulator to curb malpractices in the real estate sector, which is one of the biggest sinks of black money, was long overdue and is welcome.
But draconian laws make no sense. Stiff penalty for noncompliance of the appellate tribunal orders, for example, will be a huge deterrent. Projects are often delayed due to graft in the issuance of permits and clearances.
Government agencies issuing permits should be brought under the law and made accountable for undue delays. However, to end speculation in property, the government must also do away with the artificial shortage of land, which is policy-induced. States should free more land for urban development. And absurd rules on usage must go.
HomeShikari’s View – by P.Sunder, CEO
The bill is inching its way to reality. In whatever format it is finally approved, the bill is expected to make it a lot better and a more level playing field for home buyers vis-a-vis the builders. However, care needs to be taken to expedite the process of approvals and also ensure that draconian measures as penalties are not misused or become a drag on the whole industry. Much as a regulator can prove beneficial to consumers, they could also pave the way for more corruption and delays if left unfettered. Overall, we feel the move towards implementing a real estate regulatory bill is a big positive for home buyers.
Courtesy:Nidhi Sharma, ET Bureau, 16 November 2015
What is the present recourse to delayed Handing over of Flats , by the Builders? 2) If a delivery dt or month(!) hadbeen mentioned in writing and if it is not kept, Then? 3) Can Governamental Delays in giving the completion certificate be Cited as valid excuse? 4) What is “COMPLETION” and at stage of the Project is this Clearance Given by the Govt. authorities?\r\n\r\nWill be thankful for an immediate reply.
Hi KBS Mani,\n\n1) There is no standard recourse to delay in handing over flats. The recourse is dictated by the clauses in your sale agreement which you have read and agreed to and signed. Normally, builders have one sided clauses which put punitive penalties for late payment from a buyer side but give very little in terms of compensation if there is a delay. If you had a proper legal opinion and a lawyer to advise you then one should contest such one sided clauses and get them amended in the sale agreement before signing it.\n\n2) Now as things stand and if the delivery is delayed beyond the date mentioned in your sale agreement, then you are to be compensated at a suitable rate as mentioned in your sale agreement. However, if there is no compensation mentioned whereas there is a huge penal interest for delay in payment from your side, then you can approach the consumer court for relief. Normally, these things in consumer court could take 1-2 years given the no of cases that are pending.\n\n3) Government delays cannot be cited as normally the only exception can be force majeure clauses (natural disasters or acts of God). Delay in government approvals, non-availability of cement / sand / labour etc. are not acceptable reasons. Again you will have to fight it out and the builder needs to know that you mean business.\n\n4) Completion is when the flat and the entire complex is fit to live. Normally, the builder has to approach the plan sanctioning authority once the construction is completed within 30 days and apply for the occupancy certificate. The authorities are supposed to inspect for dwelling worthiness as well as for fire and other safety and then will give an occupancy certificate.\n\nIf it is almost completed, then you should ask for reasons for delay and a clear date for hand over in writing. Give them that time and if it doesn?t happen, send a legal notice. But I would advise not to go to the consumer court right away as the builder could possibly deny possession and delay registration on some pretext or the other. Then you are doubly affected. Keep all documentation requesting for compensation or a fair deal and their responses to it with you. Once the flat is handed over and registration completed, file a consumer court case. Then if it takes 2 years, you still have access to the flat and its use and can wait for your compensation to come in.