5 Real Estate Law Rules That Every Homebuyer Needs To Know

The real estate law has made it tough for defaulters to escape. However, developers are not the only defaulters. Many a time, homebuyers delay payments making it tough for developers, too. Accordingly, there are provisions in the law that talk about duties of homebuyers.

Penalty to be paid at 10%

According to latest reports, the real estate regulator in Madhya Pradesh has said that it has fixed the penalty at 10 per cent interest for both developers and homebuyers. This is two per cent more than SBI's Marginal Cost of Funds-Based Lending Rate (MCLR) . Many other states are expected to follow suit. This encourages home buyers to invest because previously the rate of interest for delayed payment stood to anywhere between 12-18 per cent, while the developer's responsibility for any delay amounted to only Rs 5-10 per sq ft. The disparity caused homebuyers a huge loss in case of unexpected delays.

For issues such as not taking possession owing to discontinuance of his business, or because of suspension or because of revocation of his registration, the homebuyer can claim compensation as prescribed by the state regulator.

Rules clarify that, “the interest payable by the allottee to the promoter shall be from the date the allottee defaults in payment to the promoter till the date it is paid”.

You may want to read: 8 Lesser-Known Rules Of Real Estate Law That Are Binding On Every Seller

Mandatory to clear all dues

Buyers have to commit to timelines of payments which includes the share of registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent and other charges if any.

Take possession only after occupancy certificate (OC)

Not just the developer, it is binding upon the homebuyer to take physical possession of the plot, apartment, building within two months of the occupancy certificate being issued to the developer. Opting for a fit-out building or going in for a soft-possession could lead you into trouble.

Also Read: Should You Make The Final Payment Before Receiving Occupancy Certificate?

Association of homebuyers is compulsory

Allottees of a project must get together to form an association/society/cooperative society/federation. This would help them solve problems related to the housing society. This association will also take care of common resources and also looks into logistics.

Allottees in projects beyond planning area also have a say

In the interest of buyers, the authority can order the developer of a project to register with the authority and thereby become bound by the rules and regulations prescribed.

Also read: 10 Frequently Asked Questions About Real Estate Law