Cases like ours will not happen if RERA...
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.