Both realtors & home buyers can terminate sale agreement in case of default by either
2016 mandating promoters to clearly declare the date of delivery of flats for possession in the agreement.The notified rules have made it very clear that both real estate developers and home buyers can terminate the sale agreement in the case of default by any of them under the recently notified real estate regulatory Act.
However, the new rules also allow homebuyers and developers to amend the sales agreement with written consent of both the parties.
In a major relief to homebuyers, the total price of an apartment or a plot cannot be increased or will be escalation free, except when development charges are increased by the competent authorities.
The new rules have defined the total cost of unit mutually agreed upon at the time signing the agreement, which will include the booking amount paid by the allottee to promoter towards the apartment or plot.
Thus, consumers will have to pay extra only in case of an increase in taxes, any development charges levied by any authority, an increase in area up to max of 3 per cent.
According to new rules, the project can be handed over to an association of allottees only after completion certificate is issued and homebuyers can only be given possession of their flats once all amenities and facilities promised in writing by promoters are in place.
The new rules also mandate that maintenance charges can only be charged from consumers after the issuance of completion certificate.
Hailing the decision, Abhay Upadhyay, convenor of Kolkata West International City Buyers’ Welfare Association, said, “We are satisfied with the attempt made by the Centre to come out with fair model agreement for sale and hope that the practice of making one-sided agreement loaded in favour of builder becomes a thing of the past.”
“We thank Prime Minister Narendra Modi in whose tenure the RERA Bill saw the light of day and to have continued with the process of bringing complete reforms in the sector with this model agreement,” Upadhyay said.
If a home buyer defaults by not paying to the developer and such a default persists for an agreed upon number of months, the developer can terminate the agreement and cancel the allotment made to the buyer. The developer can then deduct the booking amount and interest liabilities from the amount to be repaid to the buyer.
Also, if the real estate developer fails to give ready to move in possession of the apartment or fails to complete the project as per the stipulated time, the home buyer can terminate the agreement and is entitled to a refund of the amount paid with interest in 45 days of such termination.
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