Real Estate Bill- How it will help home-buyers


The much awaited Real Estate Bill, which aims to protect the interests of buyers and bring more transparency to the sector was on Thursday passed in Rajya Sabha.The bill was first introduced in 2013 and amendments have been made to it by the present government.

 The Finance Ministry in 2012 paper on black money had pointed out that the real estate sector is vulnerable to black money because of under-reporting of transactions.
Here are some important features of the bill:

Better organised real-estate sector

The real-estate sector in India is unorganised which leads to various discrepancies in the functioning. The bill will establish state-level authorities called Real Estate Regulatory Authorities (RERAs) which will regulate transactions related to both residential and commercial projects. The authority will grade the projects helping customers to make better decisions.

Timely completion and hand-over

One of the problems which buyers face is that they don’t get possession of property as promised by the seller because of delayed construction among other issues. The bill ensures that 70 per cent of the money taken from buyers has to be kept aside in a separate bank account and this money can only be used for construction activities. This will ensure that the sellers don’t invest the money received from one project into another project.

Accurate information

As per the bill, it will become mandatory for sellers to disclose all information like project layout, approval, land status, contractors, schedule and completion of project with customers as well as the RERA.

Appropriate punishment

If the developer fails to hand-over the property to the buyer on time, then he would be liable to pay same amount as interest which he is charging from the buyer on delay in payment. Also, the property cannot be sold on the basis of ‘super area’ which includes both flat area and common area. If the developer violates the orders of appellate tribunal, then he/she can get a jail term of up to three years or penalty.

Allottees association and after-sales service

It has been made mandatory to set-up an allottees association within three months of the allotment of major units/properties so that the residents can manage common facilities like a library and a common hall. Also, if the buyer finds any structural deficiency in the property, then he/she can contact the developer for after-sales service within one year of possession. The promoters or developers cannot make any changes to the plan without consent of the buyer, the bill states.

– See more at: http://indianexpress.com/article/india/india-news-india/real-estate-bill-to-be-tabled-in-rajya-sabha-today-heres-how-it-will-help-home-buyers/#sthash.StFFFPud.dpuf

Magic Bricks Now – Questions by Mr.Vishwanath – Nitesh Caesars Palace


Lawyers suggestion key points:
  1. Buyers association either registered or unregistered can represent the case. However, registration would give more benefits so  the builder is forced to talk to one identify who represents buyers benefit. Builder will naturally respond / negotiate once an association is formed.
  2. Registration can be done before Occupancy Certificate (OC)  but need to get the sale deed clearly checked line by line, by lawyer on this channel showed his suspicion of only 2 blocks ready out of 8 blocks: chances of many issues. Registration agreement needs clear scanning by lawyer to avoid future mistakes as the project isn’t complete.Buyer can register the property but do not tie registration to OC as that will clear all the uncertainty of owning the flat.
  3. Possession without OC is at builders cost. Builder is liable to bear all cost such as taxes, power, maintenance etc. Buyer can take possession if builder is giving alternate power but should be at his cost not owners.
  4. Maintenance agreement: There is no legal binding to sign any maintenance agreement during registration you can deny as it is one sided. Strictly No to maintenance agreement of 10 yrs..Builder cannot enforce this for signing. Demanding 1 year maintenance cost in advance is ok. Maintenance payments to be in the name of different or specific bank account. Need not pay more than 1 year.
  5. Arbitration clause is not applicable for filing case in consumer court. There is only consumer court for this issue and can be through association and effective through association rather individual. Interim relief for completion of amenities/services can be claimed at consumer forum.

Social media activism against builders and defamation suits


One of the good thing that has happened to Real Estate market in the recent past is online presense of both Home Buyers And Developers. While home buyers have been actively using social media and forums before making property related decisions, builders are using similar platforms to advertise and reach out to prospective buyers.

Understanding the potential of social media, most of the big developers started reaching out to young professionals through online platforms. From creating dedicated project pages on Facebook to twitter handles and uploading 3D videos of sample flats on youtube channels became the new fashion. A big chunk of marketing budget was being spent through PR agencies to increase online presence and trap as many buyers as they can.

After 6 years, the very same social media users are hitting back. Social media platform like Facebook, Whatsapp and twitter have come to the rescue of home buyers and have played a major role in homebuyers fight against injustice and unfair practices.

Social Media Activism

There is no denial that builders have exploited homebuyer in this country since the inception of group housing. Even the Prime Minister, Mr. Narendra Modi said:

“In our country, wittingly or unwittingly, the image of builder lobby is bad.

Prior to social media, It was very difficult for the home buyers to join hands and raise their collective voice against the unfair treatment by builders. Most of the time individuals were cornered, threatened and coerced to give up their rights.

However, all of this have changed now. Angry home buyers are no longer hiding or afraid to take on the might of developers for delaying the delivery of apartments and villas and changing building plans. They are banding together to fight for their homes using all the means at their disposal, including staging unique protests at project sites and going to court.

Most of the buyers groups have online Facebook or Whatsapp groups to easily highlight the wrongdoing of builders. In the past, most of the home buyers groups have managed to stop lot of wrongdoings of the developers and have been able to give them sleepless nights. In one of the Noida builder’s project, more than 300 home buyers got together on Facebook and filed a case of deficiency in service in NCDRC. There are host of buyer’s association who are bringing in people together in ensuring they are not cheated anymore.

SLAPP / Defamation Suits

Builder don’t like to answer a crowd as they find it easy to coerce individuals. Home buyers group have been a nightmare for them for obvious reasons. Because they find it difficult to mend their ways and do business in ethical way, they engage in something called Disreputation Management. Disreputation management is the practice of ensuring the content that a builder ddoesn’t’t like, should be removed from the web. Most of the content is usually some home buyer unearthing illegal practices of a developer.

So, to deal with the social media activism, builders have started filing a SLAPP (Strategic Lawsuit Against Public Participation) suit with the intention to silence, censor, and intimidate buyers concerned with ‘deficiency in service’ and ‘unfair trade practices.  Builders alleged that social media groups have damaged their standing and reduced business opportunities. By filing such cases, they seek crores in damages for loss of reputation and business from home buyers.

What should a Home Buyer do

Buyers are finding comfort in unity and there is no harm in being united. Social media is a great tool to ensure errant developers are brought to the task. While it is good to raise a collective voice and fight for your rights, there are few measures that home buyers and Group Admins must take to ensure builder does not engage them in defamation suits.

  • One should be factual about the content. Ensure if you are accusing builder of some wrongdoing, you have content to back your claims.
  • There is no harm in criticism but do not abuse anyone on the forums.
  • Use RTI to know the facts before alleging someone of corrupt practices.
  • Avoid posting information received from word of mouth.

Individuals should be careful while posting forward contents. After recent Nepal Earthquake,  pictures of an apartment complex labelled as noida society were doing rounds. Builder had to issue a clarification because it did not belong to their project and it was a complex in Nepal.

Should you be afraid? 

Builder’s aim by filing defamation suits is to silence the home buyers voice. If you have raised your voice against wrongdoings of the builder, there is no reason to be afraid of. Home buyers have taken a tough stand against such practices of the builder and are fighting such cases in various court. Some of the home buyers have given it back to builder’s by filing cases of deficiency in services in appropriate courts.

Legal View: 

Sahil Sethi, a lawyer defending home buyers in defamation cases says, ” it’s important to ensure that all comments made on social media complaining about a developer are fair, even if not absolutely factually correct.  Buyers should also refrain from calling names or hurling abuse on social media.”

The Logical Buyer suggests that home buyers should not bow down to such threats from builders and continue their fight against wrong practices. At the same time, one must act responsibly and should not indulge in unwarranted accusations. Home buyers association must ensure they stand by those who take the lead and raise their voice against builders.

Read more details:http://www.thelogicalbuyer.com/social-media-activism-against-builders-and-defamation-suits/

Remedy for Project Delays


Will the prices of real estate come down? Should you be buying commercial property? Is the government’s negligence of roads and potholes impacting the price of your property investment? Watch incisive debates on Burning issues of the Day. Listen to the biggest voices in the Business, Government and urban planning only on ‘The Urban Debate’.

Home builder delay may need legal action


When to take legal help

Generally, most home buyers remain in a dilemma: to file a case against the developer or not? Most don’t want to get involved in a long drawn legal process. Some are even scared of going against a builder. “The larger and less wholesome truth is that the current legal dispensation is ill-equipped and under-regulated to offer complete consumer protection in matters related to real estate,” said Anuj Puri, chairman and country head, JLL India. But, “many examples of customers obtaining favourable decisions upon approaching consumer courts exist, and the power of these forums should not be underestimated,” he added.

So, if you are an aggrieved home buyer, you should not hesitate in taking legal help. “Once the due date for possession is over, the buyer should visit the site and take stock of the situation by trying to assess whether the period of delay will be negligible or considerable. If the buyer feels that delay will be considerable, it would be pointless to wait further, and she should immediately file a case,” said Jehangir Gai, a Mumbai-based consumer activist.

You can also approach the court for other issues as well. “When it comes to deviations from the original project plan, which can result in a shortfall of common amenities or drastic changes to the units themselves, the customer should take action as soon as these deviations come to light,” said Puri.

But do remember that there is a stipulated time frame within which a case has to be filed by home buyers. “The consumer court will not entertain a complaint after the limitation period of two years is over from the date of cause of action. Hence, the consumer has to be very alert and should immediately file a case in the consumer court. Don’t keep the matter pending,” said Arun Saxena, president, International Consumer Right Protection Council. However, “with regard to real estate, since there will be a continuous cause of action, this provision (2-year timeline) may not strictly apply,” said S. Saroja, director, consumer advisory and outreach, Citizen Consumer and Civic Action Group.

There are different avenues that you can take. “A homebuyer can approach the consumer court, civil or criminal court, or the Competition Commission of India (CCI), depending on the nature of complaint,” said Saroja.

Things to do

As in any legal matter, you should posses evidence to prove your stand or allegation. Get all papers and documents ready—advertisement brochure, booking receipts with payment details, any letter sent by the developer, signed agreement, all payment details, emails exchanged, photographs collected, and others. Avoid verbal communication.

“It is important that the consumer maintains written correspondence with the builder at regular intervals during the course of construction, highlighting issues then and there, as this will be a strong point in her favour when she approaches the Consumer Fora at a later stage,” said Saroja.

However, before going for legal action, you should have raised the issue with the developer. “Buyers should always send a legal notice before approaching any forum or court with their grievance. They should have taken objection with the builder against violations or illegal demands by sending a letter so that evidence can be created in their favour to be produced at the time of proceedings,” said Pathak.

So, if you are an aggrieved home buyer, contact others and form a group. Note down the issues and information available with each person. Approach the developer as a group. If no resolution is in sight, take legal advice from an expert.

Delay of six months to a year has become commonplace in residential real estate, and most buyers expect it. But a longer delay puts additional financial burden, and filing a suit against a developer is justified.

Doors To Knock On…… Read ahead this article

 

4 Home Loan rules most of the investors don’t know about


Can you claim tax deduction for your under-constructed house? Can you claim tax for the home loan taken from your friend and not from Bank ? These are some of the questions which are not generally discussed over and lot of investors have no idea about actual rules. In the video below I will talk about four not so known rules of home loans . Keep reading ! . Readers on email can watch the video on this article.

Solution to “Delay in Possession of Flat”


flat-possession-delay-in-possession-of-flat

Preventive Measures

1. Due Diligence:This is the first step that you should take even before you book the flat. You must conduct your own due diligence on the builder and the project. You should look at the track record of the builder and look at the average delivery time of his past projects. Then you should check whether the concerned project has received all approvals. See – documents to check before buying a flat.
When opting for a payment plan, always choose construction linked plan. In this way, you are creating an incentive for the builder to complete the project at the earliest. This will also ensure that you don’t block all your money upfront. You should always keep your options open.

2. Penalty Clause:Before handing over the booking amount cheque, you should ask for a copy of allotment letter and builder-buyer agreement. Check out the project delivery time and ensure that penalty clause is incorporated in the agreement. Generally, all reputed builders have a penalty clause in builder-buyer agreement stating Rs. 5-10 per square feet of penalty per month that the builder will pay from the promised project delivery date upto the actual handover date of the flat.

3. Form a Group

Once, you invest in a project, the next thing you would like to do is to get in touch with other buyers and investors of your project. A group has a much higher strength than an individual. In case of any delays,. These days, there are many online forums where you can meet your fellow buyers and investors.

Now Join Nitesh Caesars Palace Buyers Association(NCPBA)

4. Follow Up with Builder
Your job doesn’t get over with regular payments of your home installments. You should keep a track on construction activity. In case, you feel that the construction is getting delayed, you should meet with the builder as a group and understand the situation. A group can build more pressure and it is easier to fight for your cause as a group.

Legal Recourse

In case you feel that the builder is deliberately delaying the project, you may have to resort to take legal action. You can approach following forums for redressal:

1. Civil Court:If a builder commits breach of its obligations or is involved in unfair trade practices, you can approach a Civil Court for relief. For eg. some builders sell plots and flats even without owning the land, some use sub-standard construction material, some builders don’t apply for approvals deliberately causing delay in projects. Certain states have special provisions to handle delays by builders.  the builder is liable to refund the buyer’s money with interest if he is unable to justify delay in handing over possession of flats.

2. Consumer Forum:Consumer Protection Act, 1986, protects the rights of a consumer and provides remedies to a consumer against deficient services. A delay in handing over possession of flat is deficiency in rendering of promised service by the builder. You can file a case in the consumer dispute redressal commission at three levels – district, state and national level. District commission, established in each district, can handle cases where the value of the claim is less than Rs. 20 lakhs. The State commission of every state can handle cases where the value of claim is more than Rs. 20 lakhs but less than Rs. 1 Crore. The National commission has jurisdiction to handle claims of more than Rs. 1 Crore.

3. Competition Commission of India:The Competition Act, 2002 was enacted to prevent practices having adverse effect on competition, to prohibit use of dominance and to protect interests of consumers. A flat buyer can file a complaint against the unfair practices of the builder before the Competition Commission of India which has been empowered to investigate anti competitive practices and impose stringent penalties on the offenders. Penalties imposed by CCI against a builder act as deterrent to unfair trade practices in the real estate industry.

5. Criminal Court:Along with the consumer complaint in consumer forum, you can also file a criminal case against the builder under the provisions of Indian Penal Code, 1860 for breach of contract, cheating, not responding to grievance and delivery of poor quality construction. You can send a statutory notice to the builder. If the builder does not respond to the notice, file a police complaint and then file a criminal complaint before the Metropolitan Magistrate. You should mention all irregularities committed by the builder in your complaints.

Relief Options

It is better to take legal action as a group. If you file a case as a group, your legal costs will be shared and your case can be fast tracked.

Refunds can be claimed if the project is delayed beyond the stipulated time period as per the agreement. If the builder is in trouble and not in a position to deliver the project, the flat buyer can claim for the money required to purchase an alternative flat at the current market rate in the respective area.
If, however you are reasonably sure that the builder will hand over the possession of flat in a few months or years, you can claim the money you will be spending to pay rent during the delay period. Otherwise, you can claim interest on the payment made till date.

Conclusion

Today, builders are leaving no stones unturned in attracting the investors and end users into buying their properties. First, they will promise you moon and once they get all the money, they will stop responding to your queries. Most projects get delayed due to unfair practices by builders. There cannot be any justification against the delay caused by the builder once he has taken money and has promised to deliver the project in stipulated time.
As a consumer, we must know our rights and how to seek justice. First, you should take preventive measures to avoid delays in possession of flat. If however, preventive measures are not working out, you should not hesitate in taking legal action against the builder. After all, it is our hard earned money which is at stake.

Read more: http://assetyogi.com/flat-possession-delay/#ixzz404TgVYwI