Cases like ours will not hap­pen if RERA...

HT Estates - - HTESTATES -

here. Com­pen­sa­tion should also in­clude men­tal trauma and the lit­i­ga­tion cost,” says Ya­dav. He is pay­ing a rent of ₹ 35,000 per month and has al­ready paid about 30% of the hous­ing cost.

Ya­dav also says that since the in­ter­est re­ceived by buy­ers will be tax­able and at­tract a 30% in­ter­est from other sources it should be termed as com­pen­sa­tion and de­clared tax free. Many buy­ers bought the apart­ments for self-use and not for in­vest­ments. “It was not a fi­nan­cial in­stru­ment and hence buy­ers should not be taxed for it,” he adds.

About set­ting aside hous­ing pro­ject funds in es­crow ac­counts, Ya­dav f eels there should be trans­parency and builders should be open about declar­ing the amount set aside when buy­ers ask for it. A mech­a­nism should also be in place to mon­i­tor the funds from time to time.

“Haryana al­ready has a pro­vi­sion for set­ting aside 30% amount in an es­crow ac­count which has all along been merely a tick in the box. We were never given de­tails of the amount main­tained i n t he es­crow ac­count,” he says. Un­less there is trans­parency and strin­gent mon­i­tor­ing of how the money col­lected from buy­ers is spent, this too will not be of much help.

Le­gal ex­perts say that on­go­ing projects with­out a com­ple- tion cer­tifi­cate (by March 2016) will come un­der the purview of RERA. Apart from the es­crow pro­vi­sion, RERA also re­quires builders to in­form the reg­u­la­tory author­ity about how that money was spent. It also con­tains a clause on per­cent­age of com­ple­tion.

“If builders have so far in the ab­sence of RERA spent the en­tire amount col­lected from buy­ers, then they can­not ig­nore the fact that they are re­quired to sub­mit the per­cent­age of com­ple­tion ac­count be­fore the reg­u­la­tory author­ity that will clearly in­di­cate the amount of money that has al­ready been si­phoned off from the pro­ject,” says S K Pal, a Supreme Court lawyer.

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