According to Thomas Jefferson, “The law does not know lack of knowledge as an excuse in a given nation.”
Why Legal Awareness Is Helpful when a Home is Purchased
A home is arguably the largest purchase one will ever make, and that long process of researching and locating that perfect home can be quite demanding. But it is quite amusing how they don’t think about the ownership of the property and all the legal documents which are affiliated with such ownership. The thirst to own a house is so overwhelming that so many people are willing to overlook other important factors. Even the very educated are caught in this error.
You spend millions investing in the house, designing it, and decorating it. So, this is one investment that has to be made in a very calculated manner. Legion distrust any type of building structure then this home must be scrutinized to the last detail so that problems, if not eliminated completely, are minimized significantly. It is your money that has been worked for, so it makes perfect sense to be very aggressive while buying properties. Then what are the things that can be done by the home buyers to empower and secure themselves? Read on to know.
Legal Aspects After the Legalities
Buyers are advised to regularly visit the site throughout the course of the transaction and even after completion in order to assess the project’s development. This would be the only way for you to get ‘inside information’ on the progress of the project. In the sale documents, the possession date of the flat is stated. Milestones in the payments are often tied to the advancement of construction. By going to the site yourself, you are able to confirm whether the project is completing on time. You will also be able to verify the quality of construction materials that are being used in your apartment. If there are any delays, any deviations or defaults, then they can be addressed directly to the builder and the appropriate authorities.
RERA: A Game Changer for Who Looking to Purchase Real Estate
India is known to have a vast real estate industry but it is also known to be unregulated. The lack of a single governing body led to this sector growing at a rapid pace without any checks on it. There was no standard set in place for the entire nation which in turn made people purchase property in an unorganized manner. Many developers of property and real estate failed to deliver on time or would even not deliver at all. It led to many buyers defaulting on payments and others who used a loan system to buy houses on an 8 to 10 year wait period, renting houses as well and hence making it difficult for them. It general led to an endless cycle of woe that only helped one and that was lawyers and added strain to the real estate market.
The RERA or the Real Estate Regulatory Authority was introduced when the RERA act was passed, the council was set up to look after the issues faced by home buyers and strengthen the real estate sector. The government made It obligatory for builders to provide certain documents to reduce disturbances in future where buyers were left in chaos after failure to purchase homes. One important clause that the government included in the contract was that a builder can no strap their customers by including clauses that were hard to understand.
Now, the real estate sector is under the umbrella of the RERA practice. There’s no construction or delivery issue now left to be somehow solved by another body. You don’t have to be at the mercy of multiple people anymore. The RERA has also issued guidelines which require each state to create a regulatory agency and an appellate authority to look into complaints raised by the buyers of homes. They will surely foster the overall progress of the real estate sector with all the operational features of efficiency, accountability, and transparency that are bound to be the order of the day.
Key Features of the RERA Act
- Appointment of Regulatory Authority: Appointment of a regulatory authority in each state in order to fast track system that will ensure settlement of all disputes relating to the real property.
- Compulsory Registration of Projects: A requirement to register all the real estate developer projects with RERA so that jurisdiction is given to the authority. Property sales are permitted only after the registration with RERA.
- Restrictions on Rights of Buyers by Builders: A builder is not authorized to transfer the buyers’ project rights pending approval from RERA and not less than two-thirds of all other buyers of the apartment.
- Default Interest Rate is the Same: In the circumstances of either of the buyer or the builder not being ready to comply with all the terms and conditions agreed by both the parties, it is so agreed that both of them shall pay the same rate of interest as penal charges for their failure to comply.
- Title Deed Losses are Compensated: The builder is liable to reimburse the purchaser all losses that may arise due to the property in question having a defect in its title.
Home Buyers Are the Greatest Beneficiaries
In this section, we delve deeper into a few more provisions that are intended at empowering the home buyers and which were made at the time of the RERA implementation.
- Specification of Outbounding Carpet Area: The law requires that the cost of the flats be calculated using only the area of any insolvent unit within a given floor and forbids builders in charging based on the super built up area (SBA) which was often frowned on. Builders are prohibited from basing their price charges on SBA or similar measurements as the carpet area is to be used exclusively.
- Late Payment Interest Rates from buyers: With a prior form of law then when buyers paid late, they would pay more than what the builder was to part with in late payment, with regard to interest rate, but this has improved since both sides today face the same perimeter.
- Dedicated Deposit Account: The builders used to gather all funds allocated for a specific project and reinvest it in a different project. On the other hand, RERA now requires around seventy percent of the funds earmarked for completing the project to be held in an escrow account.
- Restriction on Initial Payment: Clients may provide no more than a 10 percent initial payment prior to entering into sale agreements of the apartment.
- Building Standards Enforcement: Builders are obliged to make good or rectify any complaints pertaining to the quality of the apartment’s construction – such as leaks and mold during 5 years period from the date of sale – free of charge and within a month notification is given.
- Best dispute resolution mechanism: Each department’s headquarters together with appellate tribunals should operate within a single state to deal with disputes. Anyone with a grievance against the order of the authority can present their grievance to the tribunal whose turn it is to address such grievances in four months. You can make a complaint with the provincial RERA office of your choice at a small cost through the web. It has been made clear to the state government all since what happened when and how to make a complaint.
Conclusion: Empower Yourself as a Home Buyer
For most home buyers, purchasing property is a lifetime decision which means that there are certain legal issues that you should not ignore. Ignoring these few basic tips may end up costing you a lot of time, money, and effort in the future and they all could have been avoided by taking precautions. That has changed now with the RERA act. The government has passed a strong law that helps home buyers but the people have to educate themselves too about the laws so they can make the best use of them. In today’s world where there is an excess of information, there is no way you can claim ignorance as a defense – it’s a choice.
Author – Dream Location
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