Planning To Buy A Home After May 1? Mind These

Are you not looking forward to May 1, when the Real Estate (Regulation & Development) Act, 2016, is scheduled to come into effect? We all have read volumes about how the law will reform the sector in such a way that fraudulent developers will become a thing of the past. There will be no scope for wrongdoings and duplicity in the sector. All fair points. But all this will be achieved not only by fixing responsibilities of developers and real estate agents; home buyers will be made equally accountable. They, too, will have to ensure they honour their part of the deal.  

Also Read: Are We Prepared To Implement Real Estate Law?

Here are five points for you to consider if you planning to start a home purchase after the new law comes into force:

While a developer will be responsible for providing you all the detail, keep you updated about the progress and deliver a project within a stipulated time limit, buyers will be responsible “to make necessary payments in the manner and within the time as specified in the said agreement for sale”. You will also be liable to pay your share of the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, and other charges, if any.

Now, what if you fail to do so?

You will have to pay an interest -- the benchmark would be the prime lending rate of the State Bank of India, plus two per cent additional charges-- for any delay in payment.

Is there a way to avoid paying this penalty?  Sure, if you can negotiate a deal with the developer. “The obligations of the allottee under sub-section (6) and the liability towards interest under sub-section may be reduced when mutually agreed to between the promoter and such allottee,” says the Act.

The Act specifies that a home buyer has to take possession of a unit two months after an occupancy certificate has been issued for the same. If you fail to do that because of an unforeseen situation, it would be considered dishonouring the sale agreement.

If you thought the registration of the conveyance deed of the apartment happens to be the sole responsibility of the developer, you are wrong. The law mandates that you participate in the activity.

Your responsibility does not end after you settle in your individual home. "Every allottee of the apartment, plot or building as the case may be, shall participate towards the formation of an association or society or cooperative society of the allottees, or a federation of the same," says the Act. Even if you are not socially active, becoming a member of the housing society will now be your responsibility.

Also Read: 3 Things About Real Estate Law You Probably Do Not Know