Recently, an amendment was passed by the government bodies, where a set of rules stated that developers might have to pay 11.2% interest on delayed projects, in case they miss deadlines. A few months ago, Ministry of Housing and Urban Poverty Alleviation (HUPA) rolled out some rules to relief home buyers from chaos, bring transparency in real estate sector, and sustain customers’ interest to invest in the real estate property.
The new rules state that home buyers can only demand compensation if the developers fail to deliver their project on proposed timeframe. Builders have to pay 2 % higher than prime lending rates as set by the State Bank of India. Also, if the buyers are defaulters, then they are liable to pay the same amount of interest to the developers.
The move positively impacts not only the home buyers but also the real estate sector, too. Let us see how these new rules prove to be beneficial for property market and real estate.
After Real Estate Regulatory Authority (RERA) Bill that came into act this year, the new rules aim to fix accountability in the real estate for developers and stakeholders. According to experts, these rules will allow developers to win the trust of their customers. Home buyers will be informed about the project in which they are investing along with complete paper documentation.
All these years, delay in projects have become a major concern for buyers and investors, too. But these new rules will make a complete justice to both the parties. It will also help avoid chaos and will also help secure the investments of the buyers.
Real Estate Sector:
The rules will help developers to build credibility, motivate to complete projects on time, and build trust among development authority and end-users. In fact, it is an opportunity where the developer can win trust factor of customers and thereby uplift their brand identity in the market as well.
The real estate industry in India is growing at a speed that can only be seen as rising with every year. Rajya Sabha has recently passed the much awaited Real Estate (Regulation & Development) 2016 Bill in order to protect the interest of property buyers and ease the home-buying process. According to a source, the bill has undergone for several amendments and will be effective to bring accountability and transparency in the real estate sector. This will give advantage to customers to buy property and will also benefit to the whole real estate sector.
Purportedly, the bill sets a firm foothold in the real estates sector and lays a strong foundation in the coming years. The bill will be executed in various factors, incorporating redevelopment and development to smoothen the process in the sector.
The bill will impact on the sector, positively at two levels, i.e.,
1. Micro-level (Homebuyers)
2. Macro-level (Real Estate Sector)
Till now, home buyers were making a raw deal in the real estate sector. But from now, developers will have to make use of deposits (70% deposits collected from home buyer) in the development in only the particular project that are under construction. The project should be completed and delivered on time to home buyers without any delays. It will be developers’ responsibility to strictly adhere and provide the level of quality as stated in the norms during registration.
A few developers offer a warranty for structural damages for 1-3 years, which now has been extended to five years from the date of handing over possession to buyers.
The real estate market is highly non-transparent and most shareholders wish to operate in their own silos. The absence of a regulator is to an extent responsible for this plight. If there is a regulator in the sector then, it will become more cost-efficient and most significantly will ensure that the malpractices are not entertained.
The provisions that are listed in the bill will make the process of home-buying easy and will also have rebounds on the entire real estate sector.
We, at Sun Builders Group, since our inception to date, have gained trust of many buyers by complying with these and many such real estates rules and regulations that have been passed in the past. With the recently passed bill, we will make sure all the amendments are taken care of, as a promise to our existing customers and potential buyers. The foundation of the Group were laid with the bricks of trust, commitment and ethics – and with this bill into adaptation, we are only developing and growing forward.