The state RERA rules, made under the Real Estate Regulatory Authority Act, make agreement for sale as the bedrock of accountability and transparency in the housing sector
The state Real Estate Regulatory Authority rules made under the RERA Act make agreement for sale as the bedrock of accountability and transparency in the housing sector.
CHANDIGARH: The Real Estate( Regulatory and Development) Act of 2016 and the state rules make agreement for sale as the foundation of the buyer-builder relationship binding both in a set of duties and rights.
Under Section 13 of the Act, a builder has to enter into an agreement for sales with the buyer, before accepting booking amount of more than 10% of the total price. The agreement of sale has to be registered.
The section reads, “A promoter shall not accept a sum more than 10% of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.”
The Act stipulates that the agreement for sale will specify the particulars of development of the project, including construction of building and apartments, along with specifications and internal development works and external development works, the dates and the manner by which payments towards the cost of the apartment, plot or building, as the case maybe, are to be made by the allottees and the date on which the possession of the apartment, plot or building is to be handedover, the rates of interest payable by the promoter to the allot tee and the al lot tee to the promoter in case of default.
The Ha ryan a Real Estate( Regulation and Development) Rules of 2017 and the Punjab State Real Estate (Regulation and Develop- ment) Rules of 2017, under the power enshrined under the Act, lay down the format for an agreement of sale.
Under the state rules, “Any application letter, allotment letter or any other document signed by the allottee, in respect of the apartment, plot or building, prior to the execution and registration of the agreement for sale for such apartment, plot or building, as the case may be, shall not be construed to limit the rights and interests of the allottee underthe agreement for sale.”
The builder has to submit the details, including a performa of agreement for sale to the state Real Estate Regulatory Authority at the time of the project registration and for uploading on the authority’s website.
The builder has to enter into an agreement for sale with the buyer as perth estate rules, as it is one of the conditions laid down for issuance of the certificate of the project.
Under the state rules, builder has to give representation and warranty to the buyer in the agreement for sales. If violated, the builder is liable to fine and imprisonment. Some of the builder warranties include clear title of theland, requisite approvals taken from the competent authorities, no encumbrances and litigations pending with respect the project, and no restrictions on the builder from selling the property or entering into sales agreement with the buyer, no government notice received for the project, he will continue pay pending government charges, and he will deliver peacefully the possession of the property to the buyer and the project to the association of buyers.
There are many clauses in the prescribed agreement of sale that incorporate accountability of both buyer and the builder.
The agreement of sales, as per the state rules, must mention the cases in which the builder is considered under a condition of default, if he fails to deliver timely possession or if his business as a developer is discontinued on account of suspension or revocation of his registration under the provisions of the Act or the rules or regulations made there under. In such cases, the agreement em powers the buyer to stop making payments and terminate the agreement itself.
The builder has to compensate the buyer in case of any loss caused to him due to defective title of the land, on which the project is being developed or has been developed.
In case of delay in handing over of possession, the refund to the al lot tee must be made within 45 days of it becoming due with respect to the agreed date.
The builder has to clearly mention in the agreement, the ownership records and the legal status of the property on which the project is coming up.
The builder has to clearly mention in the agreement itself the details of the commencement certificate for the project, the approved final layout plan, sanctioned plan, specifications and other approvals taken. He also must disclose the his registration number, and the registration number of the project.
In the agreement, the builder must give the total price of the property based on the carpet area. It should also include the, “break up of the amounts such as cost of apartment, cost of exclusive balcony or verandah areas, cost of exclusive open terrace areas, proportionate cost of common areas, preferential location charges, taxes, and maintenance charges.”
The total price includes the booking amount, recovery of price of land, construction of the common areas, internal development charges, external development charges, taxes, cost of pro- viding electric wiring, electrical connectivity to the apartment, lift, water line and plumbing, finishing with paint, marbles, tiles, doors, windows, fire detection and firefighting equipment in the common areas, maintenance charges and includes cost for providing all other facilities, amenities and specifications to be provided within the property and the project, as per the state RERA rules.
The total price is escalation-free except increases due to increase on account of development charges or any other increase in charges which maybe levied or imposed by the competent authority from time to time.
The builder can’t charge from an allottee any additional amount in lieu of increase in the taxes after the expiry of the scheduled date of completion of the project.
The agreement for sale must include a commitment from the builder to confirm the final carpet area after the construction is complete and the occupancy certificate is granted by furnishing the details of the changes in the carpet area.
The builder has to submit the details, including a performa of agreement for sale to the state RERA at the time of the project registration and for uploading on the authority’s website.