Last updated: June 29, 2016 at 18:25 pm
Home Buyers Rejoice! Govt to Make Builders Pay 11% Interest For Delayed Projects!
Vaishnavi Kanekal
Finally! The agony of homebuyers has been heard by the government. Going forward, for any delay in handing over possession of the property to the buyer, the real estate company will have to pay 11.2 per cent interest on the principle amount paid by the buyer.
The draft rules have also discussed various issues on the real estate delayed projects but the highlight of the draft would have to be the payment of 11.2% interest.
Almost as high as 90% of the real estate projects in India move at a snail’s pace making the waiting period for homebuyer tormenting. Most real estate companies offer a maximum of 6 month delay on paper via the agreement but almost 90% of them still don’t get completed even after a year’s delay.
95% of the purchase of homes are funded by home loans and as expected, the bank interest rates need to be paid, whether or not you have moved into your new adobe. This leaves the home buyer in a soup wherein he is sandwiched between the famous real estate delay and the bank interest rates.
Also another thing to note is the helplessness of the home buyers who pay lakhs of booking amount for a project that take years to start, but of course the home buyer is kept in the dark. Also if the home buyer insists on the withdrawal of his money, it is paid after deducting some amount for no fault of the homebuyer and if the aggrieved asks for justice, the big hefty builders simply ask them to fight it out in the court ( which is generally not possible for a common man).
The newly drafted rules are highly beneficial to the home buyers. A large percentage of real estate projects take off really late and the completion is unpredictable. So the government, as per the draft rules, without the completion certificate will have to register under Real Estate Regulatory Authority which will be set up in all states and Union Territories within 3 months of the notification of the draft rules.
The real estate companies will have to disclose the expected/estimated tenure of the project, the number of flats proposed, the intended facilities, the approval certificates from other ancillary government departments, the licenses etc.
The draft rules which after being notified will accompany the Real Estate (Development and Regulation) Act, 2016. The interest rate is to be at 2% above the Prime lending rate of State Bank Of India.
The rules state that any deviations from the agreements like any postponement of the project, alterations to the prior approved apartment designs like change in layout, cancellation of some promised structures or addition of some unapproved structures will require 70% of the allottee’s consent. If the consent doesn’t come through, then the registration might be cancelled.
In the current scenario, real estate is the subject matter of the state legislatures and hence the state houses must frame rules to bring changes in the existing real estate law. President of the Confederation of Real Estate Developer’s Associations of India, Getamber Anand said, “Unfinished projects, which were launched before 2012, can be termed as defaulters and under the draft rules, if buyers demand their money back, developers will have to return at over 11 per cent rate of interest.”
All that we can really hope is to see the new regime come to life soon.http://trak.in/tags/business/2016/06/29/home-buyers-rejoice-builders-pay-11-interest-delayed-projects/
The Ministry of Housing and Urban Poverty Alleviation has put out in the public domain draft rules of few sections of the Real Estate (Development and Regulation) Act, 2016 in five Union Territories, seeking public comment, an official statement said.
The Ministry, which has put up the rules on its website, is seeking suggestions and objections from the public within two weeks.
It has come out with the ‘Union Territories of Chandigarh, Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep’ Real Estate (Regulation and Development) Rules, 2016.
“The rules provide for payments to be made for registration of projects and real estate agents with the Regulatory Authority, documents and information to be furnished by developers, procedures to be followed for registration, extension and renewal of registration, procedures for filing and hearing of complaints and appeals, appointment and service conditions of the Chairpersons and Members of Real Estate Regulatory Authorities and Appellate Tribunals and their powers etc,” the statement added.
As Union Minister has assured Parliament during a debate on the Bill, promoters cannot discriminate against anyone in the allotment of any apartment, plot or building on any grounds.
Project status updates
The promoter will be required to upload updates on the webpage of the project within seven days from the expiry of each quarter, regarding number and types of apartments or plots booked, garages booked, the status of construction of each floor, with photographs, status of approvals, etc.
“The fee proposed for registration of projects with the Regulatory Authority is ₹10 per sq m if the plot area is below 1,000 sq m and ₹20 if the area for development is more than that for residential projects and ₹50 and ₹100 per sq m for commercial projects,” it said.
Moreover, the promoters of all ongoing projects that have not received completion certificates shall apply for registration of projects within three months.
Penalties for promoters
The rules also provide for payment of 10 per cent of the estimated cost of the project for compounding of imprisonment of promoter for non-registration of the project or violation of the order of the Real Estate Appellate Tribunal.
Imprisonment of real estate agent and buyer for violating Tribunal’s Order can be compounded upon payment of 10 per cent of the estimated cost of the plot, apartment or building. However, the reasons for imprisonment shall be complied with in one month.
In case of project delay, the promoter and buyer will be liable to pay the State Bank of India Prime Lending Rate plus 2 per cent.
(This article was published on June 24, 2016)Printable version | Jul 19, 2016 2:49:51 PM | http://www.thehindubusinessline.com/news/real-estate/real-estate-bill-draft-rules-for-5-uts-out-for-public-comment/article8769449.ece © The Hindu Business Line
Home buyers seek Real Estate (Regulation and Development) Act draft rules review
By , ET Bureau | Jul 02, 2016, 01.54 AM IST
NEW DELHI: A group of home buyers has claimed that the draft rules for the Real Estate (Regulation and Development) Act circulated by the government recently ignores the interest of buyers in ongoing housing projects and should be reconsidered.
The group, under the banner 'Fight for RERA,' pointed out that the draft rules don't specify which plan builders of existing projects need to submit when they register with the regulator
The government put up draft rules for public comments on June 24 and deadline for public feedback is July 8. the original, sanctioned plan or the latest version, which may have been revised
several times.
"Promoter may file the last sanctioned plan, layout plan and specifications with the regulator, which may be completely different from what was promised to consumers at the time of booking, and thus escape from being penalised as the requirements under this section have been complied with," said Abhay Upadhyay, national convener of 'Fight for RERA.'
He said promoters should submit the original plans and specifications, along with all the subsequently changed plans not only to maintain transparency but to give a clear picture to the regulator with regard to compliance with Section 14, which says a proposed project will be developed and completed by the promoter in accordance with sanctioned plans, layout plans and specifications as approved by the competent authorities. "In the absence of specific rules on this, penalty under section 60 and compensation under Section 71 for violation of section 14 (1) cannot be enforced," he said.
Upadhyay said there is no clarity about the schedule of completion for ongoing projects, many of which have been delayed.
"Promoters need to provide schedule of completion which was given at the time of booking, subsequent dates when project got delayed along with time period within which he undertakes to complete the project in future. In absence of this specific rules, again penalty under section 60 cannot be imposed," he pointed out.
Since the draft rules were made public last month, members of 'Fight for RERA' have been running a campaign on Twitter trying to seek an appointment with urban development minister M Venkaiah Naidu to discuss these aspects of the rules that they say need reconsideration.
Sahil Sethi, senior associate at law firm Saikrishna & Associates, explained that even in the absence of RERA, aggrieved buyers in ongoing projects can get recourse over plan changes through existing state legislations. The government put up draft rules for public comments on June 24 and deadline for public feedback is July 8.
Sethi said the regulatory act draft rules are generally silent on existing projects. "But hopefully once notified, the rules should provide clarity on how penalty under different sections of the act will be invoked in the case of ongoing projects," he said.
The draft rules, said Upadhyay, don't say how 70% of the proceeds from a project will be deposited by the developer in a separate account to meet land and construction costs in the case of projects currently under way.
It also does not provide clarity on whether home buyers are entitled to compensation for changes in the sanctioned plan, layout plan and specifications that were made by the builder to a project before it was registered with the regulator. As per Section 14 (2) (ii), such changes need the written consent of at least twothirds of the home buyers in the project.
Home Buyers Rejoice! Govt to Make Builders Pay 11% Interest For Delayed Projects!
Vaishnavi Kanekal
Finally! The agony of homebuyers has been heard by the government. Going forward, for any delay in handing over possession of the property to the buyer, the real estate company will have to pay 11.2 per cent interest on the principle amount paid by the buyer.
The draft rules have also discussed various issues on the real estate delayed projects but the highlight of the draft would have to be the payment of 11.2% interest.
Almost as high as 90% of the real estate projects in India move at a snail’s pace making the waiting period for homebuyer tormenting. Most real estate companies offer a maximum of 6 month delay on paper via the agreement but almost 90% of them still don’t get completed even after a year’s delay.
95% of the purchase of homes are funded by home loans and as expected, the bank interest rates need to be paid, whether or not you have moved into your new adobe. This leaves the home buyer in a soup wherein he is sandwiched between the famous real estate delay and the bank interest rates.
Also another thing to note is the helplessness of the home buyers who pay lakhs of booking amount for a project that take years to start, but of course the home buyer is kept in the dark. Also if the home buyer insists on the withdrawal of his money, it is paid after deducting some amount for no fault of the homebuyer and if the aggrieved asks for justice, the big hefty builders simply ask them to fight it out in the court ( which is generally not possible for a common man).
The newly drafted rules are highly beneficial to the home buyers. A large percentage of real estate projects take off really late and the completion is unpredictable. So the government, as per the draft rules, without the completion certificate will have to register under Real Estate Regulatory Authority which will be set up in all states and Union Territories within 3 months of the notification of the draft rules.
The real estate companies will have to disclose the expected/estimated tenure of the project, the number of flats proposed, the intended facilities, the approval certificates from other ancillary government departments, the licenses etc.
The draft rules which after being notified will accompany the Real Estate (Development and Regulation) Act, 2016. The interest rate is to be at 2% above the Prime lending rate of State Bank Of India.
The rules state that any deviations from the agreements like any postponement of the project, alterations to the prior approved apartment designs like change in layout, cancellation of some promised structures or addition of some unapproved structures will require 70% of the allottee’s consent. If the consent doesn’t come through, then the registration might be cancelled.
In the current scenario, real estate is the subject matter of the state legislatures and hence the state houses must frame rules to bring changes in the existing real estate law. President of the Confederation of Real Estate Developer’s Associations of India, Getamber Anand said, “Unfinished projects, which were launched before 2012, can be termed as defaulters and under the draft rules, if buyers demand their money back, developers will have to return at over 11 per cent rate of interest.”
All that we can really hope is to see the new regime come to life soon.http://trak.in/tags/business/2016/06/29/home-buyers-rejoice-builders-pay-11-interest-delayed-projects/
Real Estate Bill: Draft rules for UTs put out for public comment
New Delhi, June 24:
The Ministry, which has put up the rules on its website, is seeking suggestions and objections from the public within two weeks.
It has come out with the ‘Union Territories of Chandigarh, Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep’ Real Estate (Regulation and Development) Rules, 2016.
“The rules provide for payments to be made for registration of projects and real estate agents with the Regulatory Authority, documents and information to be furnished by developers, procedures to be followed for registration, extension and renewal of registration, procedures for filing and hearing of complaints and appeals, appointment and service conditions of the Chairpersons and Members of Real Estate Regulatory Authorities and Appellate Tribunals and their powers etc,” the statement added.
As Union Minister has assured Parliament during a debate on the Bill, promoters cannot discriminate against anyone in the allotment of any apartment, plot or building on any grounds.
Project status updates
The promoter will be required to upload updates on the webpage of the project within seven days from the expiry of each quarter, regarding number and types of apartments or plots booked, garages booked, the status of construction of each floor, with photographs, status of approvals, etc.
“The fee proposed for registration of projects with the Regulatory Authority is ₹10 per sq m if the plot area is below 1,000 sq m and ₹20 if the area for development is more than that for residential projects and ₹50 and ₹100 per sq m for commercial projects,” it said.
Moreover, the promoters of all ongoing projects that have not received completion certificates shall apply for registration of projects within three months.
Penalties for promoters
The rules also provide for payment of 10 per cent of the estimated cost of the project for compounding of imprisonment of promoter for non-registration of the project or violation of the order of the Real Estate Appellate Tribunal.
Imprisonment of real estate agent and buyer for violating Tribunal’s Order can be compounded upon payment of 10 per cent of the estimated cost of the plot, apartment or building. However, the reasons for imprisonment shall be complied with in one month.
In case of project delay, the promoter and buyer will be liable to pay the State Bank of India Prime Lending Rate plus 2 per cent.
(This article was published on June 24, 2016)Printable version | Jul 19, 2016 2:49:51 PM | http://www.thehindubusinessline.com/news/real-estate/real-estate-bill-draft-rules-for-5-uts-out-for-public-comment/article8769449.ece © The Hindu Business Line
Parag
My key suggestions are:
1. Collection of not just PAN but also copies of Aadhar, Passport and address proof and latest CIBIL report of promoters. Get updates within 15 days whenever there is a change. And no-dues certificates from tax authorities.
2. Declaration about civil/criminal cases, defaults, disputes, notices, Govt investigations/inquiries.
3. Minimum fee to avoid jail term must be able to recover all the direct/indirect losses and costs of all affected parties. Else, the developers might default on 100%, pay a 10% penalty and pocket remaining 90% money. Must be jailed on repeat offense.
1. Collection of not just PAN but also copies of Aadhar, Passport and address proof and latest CIBIL report of promoters. Get updates within 15 days whenever there is a change. And no-dues certificates from tax authorities.
2. Declaration about civil/criminal cases, defaults, disputes, notices, Govt investigations/inquiries.
3. Minimum fee to avoid jail term must be able to recover all the direct/indirect losses and costs of all affected parties. Else, the developers might default on 100%, pay a 10% penalty and pocket remaining 90% money. Must be jailed on repeat offense.
What about lease hold land versus PSBs rant of loans against such land to developers-builders-promoters without the consent of flat allottees. This may be seen in view of law u/s 6; 105 & 108 of the Transfer of Property Act, 1882 read with sec. 56 & 60 of the Indian Easement Act, 1882 and CAG Performance Audit Report No.21 of 2014.
Home buyers seek Real Estate (Regulation and Development) Act draft rules review
, ET Bureau|
By , ET Bureau | Jul 02, 2016, 01.54 AM IST
NEW DELHI: A group of home buyers has claimed that the draft rules for the Real Estate (Regulation and Development) Act circulated by the government recently ignores the interest of buyers in ongoing housing projects and should be reconsidered.
The group, under the banner 'Fight for RERA,' pointed out that the draft rules don't specify which plan builders of existing projects need to submit when they register with the regulator
The government put up draft rules for public comments on June 24 and deadline for public feedback is July 8. the original, sanctioned plan or the latest version, which may have been revised
several times.
"Promoter may file the last sanctioned plan, layout plan and specifications with the regulator, which may be completely different from what was promised to consumers at the time of booking, and thus escape from being penalised as the requirements under this section have been complied with," said Abhay Upadhyay, national convener of 'Fight for RERA.'
He said promoters should submit the original plans and specifications, along with all the subsequently changed plans not only to maintain transparency but to give a clear picture to the regulator with regard to compliance with Section 14, which says a proposed project will be developed and completed by the promoter in accordance with sanctioned plans, layout plans and specifications as approved by the competent authorities. "In the absence of specific rules on this, penalty under section 60 and compensation under Section 71 for violation of section 14 (1) cannot be enforced," he said.
Upadhyay said there is no clarity about the schedule of completion for ongoing projects, many of which have been delayed.
"Promoters need to provide schedule of completion which was given at the time of booking, subsequent dates when project got delayed along with time period within which he undertakes to complete the project in future. In absence of this specific rules, again penalty under section 60 cannot be imposed," he pointed out.
Since the draft rules were made public last month, members of 'Fight for RERA' have been running a campaign on Twitter trying to seek an appointment with urban development minister M Venkaiah Naidu to discuss these aspects of the rules that they say need reconsideration.
Sahil Sethi, senior associate at law firm Saikrishna & Associates, explained that even in the absence of RERA, aggrieved buyers in ongoing projects can get recourse over plan changes through existing state legislations. The government put up draft rules for public comments on June 24 and deadline for public feedback is July 8.
Sethi said the regulatory act draft rules are generally silent on existing projects. "But hopefully once notified, the rules should provide clarity on how penalty under different sections of the act will be invoked in the case of ongoing projects," he said.
The draft rules, said Upadhyay, don't say how 70% of the proceeds from a project will be deposited by the developer in a separate account to meet land and construction costs in the case of projects currently under way.
It also does not provide clarity on whether home buyers are entitled to compensation for changes in the sanctioned plan, layout plan and specifications that were made by the builder to a project before it was registered with the regulator. As per Section 14 (2) (ii), such changes need the written consent of at least twothirds of the home buyers in the project.
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