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Buyers can stop payment, terminate agreement in case of project delays, propose new draft rules

India TV Business Desk New Delhi 02 Aug 2016, 16:53:10
Real Estate Bill - India TV

With a view to ensure timely delivery of apartments to allottees, the government is making it mandatory for promoters to sign an agreement with buyers under which a buyer can claim ownership of an apartment in three months of the complex getting an all-clear approval from the authorities.

The buyer can stop making payments or even terminate the sale agreement if a developer fails to provide “ready to move in possession” within the specified time, a report by the Hindustan Times said. 

The developer will have to refund the entire money paid by the allottee along with interest, within 45 days of receiving the termination notice. 

The Ministry of Housing & Urban Poverty Alleviation has firmed up draft rules under Real Estate Act which explicitly incorporate such commitment in the agreement to be signed between promoter and buyer. 

Draft Agreement for Sale Rules, under the Real Estate (Development & Regulation) Act, 2016, says that “timely completion of the project and timely delivery of the apartment or plot to the allottee by the promoter is the essence of the Agreement to be signed between the promoter and allottee.” 

On the other hand, allottee would be required to ensure timely payment, say the draft rules, approved by Housing and Urban Poverty Alleviation Minister M Venkaiah Naidu for five Union Territories. 

The promoter is entitled to forfeit the booking amount paid for the allotment if an allottee cancels his allotment or withdraws from the project without any fault of the promoter.  

To be applicable for UTs of Chandigarh, Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli and Lakshadweep, these draft rules will now be placed in public domain for comments and suggestions before final notification. 

The rules make it mandatory for builders developing a project where the land exceeds 500 square metres to register themselves with the regulatory authority before launching or even advertising their project.

“There shall be a clear mention in the Agreement of date of grant of commencement certificate, clear land title giving the area of project and Khasra numbers, number of stories and plots in the project, carpet area and common area, share of allottee in common area, total price etc,” an official release said.

“Total Price is defined as including cost of land, cost of construction of apartment and common areas, internal and external development charges, taxes, cost of electric wiring and fire fighting equipment. Rules stipulate that total price is escalation free except when development changes are altered,”  it said. 

The Draft Agreement for Sale Rules specify roles, responsibilities and obligations of promoters and allottees. 
The Draft clearly stipulate that "the promoter agrees and understands that timely delivery of possession of the (apartment/plot) is the essence of the Agreement," the release said. 

Under the Draft Rule, a promoter is required to clearly indicate the date of delivery to the allottee in the Agreement itself. 

However, there is a provision for extension of this date in case of delay caused due to war, floods, drought, fire, cyclone, earthquake or any other calamity caused by nature. 

Rules stipulate that total price is escalation free except when development changes are altered. 

"In case of loss caused to allottee due to defective land title, promoter shall pay compensation and such claim shall not be barred by limitation provided under any law for the time being force," the release said.

Related Tags: #Real Estate
 
 
 
 

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