How Will RERA Keep The Real Estate Frauds In Check?
Jun 02, 2017 Real Estate News
For years, the buyer’s interest has been exploited by the builders with their fake promises and delay in deliveries with nobody to guard their interest; it was difficult for the buyers to get their issues addressed. But now with RERA coming full force from 1st May, it will be easier for the buyers to have more transparency in the real estate sector.
Issues that the buyers face frequently:
1. Funds used for other projects:
Sometimes the developers use the money that the buyers have paid for the current project, to fund other projects. This causes a delay in the delivery of the current project and at the end it the buyer who has to pay for it.
Not anymore because RERA makes sure that the developer sets up an Escrow account where 70 percent of the funds for the certain project will go. They will not be able to use the dedicated amount to fund another project. This will ensure timely delivery.
2. Forged paperwork:
Recently a similar case of bogus paperwork surfaced in Thane Maharashtra. According to the Urban Land Ceiling Regulation Act (ULCRA), all the developers are supposed to set aside five percent of the land for the affordable housing which they might want to develop in future. One developer forged the paper and showed that the area was green zone and will therefore not be set aside for affordable housing project.
The new law will make sure that the developers have registered the project and paid all the dues and received all the approval certificates before the construction starts.
3. Selling a property twice:
A real estate company in Pune bought the land and then sold it twice. Once, as an agricultural land and another to lure in more investors for property investment. The fraud of assumed to be around Rs 400 crores. It was also found that the land has no registered sales deed with the government.
Buyers should make sure that the builder or the developers produce a proper sale deed duly sign and approved by the authority.
4. Nullified Power of attorney:
A property seller in Bhopal tried to sell a land to the buyer over a nullified power of attorney. The seller is on the run now. The misuse of POA is a raging issue and the new law is expected to put an end to it. According to the new law, the developers are liable to pay 5 percent to 10 percent for such defaults.
5. Handing over the construction to the third party:
A few years back a builder sold the floor space major to another developer without informing the residents. The case is seven years old and the previous builder is not in the business anymore. Buyers have been suffering from this for a while now.
It is illegal to transfer the construction to another developer without proper consent from the authorities.
Issues that the buyers face frequently:
1. Funds used for other projects:
Sometimes the developers use the money that the buyers have paid for the current project, to fund other projects. This causes a delay in the delivery of the current project and at the end it the buyer who has to pay for it.
Not anymore because RERA makes sure that the developer sets up an Escrow account where 70 percent of the funds for the certain project will go. They will not be able to use the dedicated amount to fund another project. This will ensure timely delivery.
2. Forged paperwork:
Recently a similar case of bogus paperwork surfaced in Thane Maharashtra. According to the Urban Land Ceiling Regulation Act (ULCRA), all the developers are supposed to set aside five percent of the land for the affordable housing which they might want to develop in future. One developer forged the paper and showed that the area was green zone and will therefore not be set aside for affordable housing project.
The new law will make sure that the developers have registered the project and paid all the dues and received all the approval certificates before the construction starts.
3. Selling a property twice:
A real estate company in Pune bought the land and then sold it twice. Once, as an agricultural land and another to lure in more investors for property investment. The fraud of assumed to be around Rs 400 crores. It was also found that the land has no registered sales deed with the government.
Buyers should make sure that the builder or the developers produce a proper sale deed duly sign and approved by the authority.
4. Nullified Power of attorney:
A property seller in Bhopal tried to sell a land to the buyer over a nullified power of attorney. The seller is on the run now. The misuse of POA is a raging issue and the new law is expected to put an end to it. According to the new law, the developers are liable to pay 5 percent to 10 percent for such defaults.
5. Handing over the construction to the third party:
A few years back a builder sold the floor space major to another developer without informing the residents. The case is seven years old and the previous builder is not in the business anymore. Buyers have been suffering from this for a while now.
It is illegal to transfer the construction to another developer without proper consent from the authorities.
Looking for property portal?
Related Articles
-
-
-
Impact of GST on Real Estate
Apr 04, 2017 -
