Real estate sector is on boom which make lot of builders coming with there new housing projects across the country. Customers who invest there hard earned money left struggling with builders due to there false commitments. Now to address customers issues, government is working towards making a new legislation. The Real Estate Bill, which would deal with the issues faced by the consumers in the Indian property market. The bill is expected to be present in the parliament for passing in the coming budget session.
So if you are planning to buy housing property from a builder then first have a look what all customers issues will be addressed in this bill.
List Area Of Property Based on Carpet Area
The Real Estate Bill will make it compulsory for the builders to list the area of the flat based on carpet area. As it is the actual living space which a customer get. So this will help consumer to know exactly how much space living space you will get at the time of possession of your flat. As right now some builders mislead buyers by listing flat based on buildup or super buildup area.
Carpet Area: Carpet area is the actual floor area which consumers get from the builder or you can say it is the area of the flat which can be carpeted by the user if required.
Build-Up Area: Built-up area includes carpet area plus the area occupied by the walls of the flat. Usually it is 10% to 20% more than the Carpet Area.
Super Build-Up Area: Super Built-up area includes the build up area plus the proportional share of the common areas like corridors, lift, staircase, servant quarters, etc..
Project Clearances & Registrations Must Before Sale
The Real Estate bill will make builder take all the required clearances & registrations before launching project for sale. There are many important clearances that a builder have to take against the project like floor plan, land of the project, height of the building etc. other than that builder also have to register the project with the real estate regulator. So this bill will make builders take all the required clearances before putting the project on sale
Once the real estate bill will come into effect, it will become mandatory for the builders to declare the status of all building clearances and all contractual obligations they have. Failing this can attract fine up to 10% of the project cost and upto 3 years of jail.
Right now builders start selling flats just by taking approval on floor plan and rest of the necessary clearances remain pending which make project delays in later stages. Apart from delay in possession, consumers also struggles to get loan from the bank against the housing project which did not get necessary clearances.
Diversion Of Money From One Project To Another
The real estate bill will stop diversion of funds by making builders deposit 70% of the money collected from the buyers for the construction of a project in the bank account. Funds will be kept safely in the bank account opened for that particular project to stop diversion of funds. This way consumers money will be utilized only for the construction of the project in which they owe a flat.
Builders construct multiple projects at one point of time and sometimes they use funds of one project for the construction of another project. Consumer don’t get to know about this diversion as it happens at internal level.
Standard Sales Agreement
The real estate bill will standardize the sale agreement document across the country. Which means for any builder project across the country the sales agreement will remain the same. Builder will not be allowed to make any modification in the agreement. This will stop builders by manipulating term of the agreement in there own favor.
Right now builders make modification in sales agreement and consumer have to take clarity of each term mentioned as sometime these terms are not self explanatory. Introducing terms like no right on terrace make builder the owner of the terrace of each building.
Registered Real Estate Agents
The Real Estate Bill proposes that all real estate agents needs to be register with the state’s realty regulator.
Right now anyone can become real estate agent as there is no regulation. With registration, there would be more accountability, meaning better service for you.