The government is working towards issuing a standard ‘agreement of sale’ for all builders and buyers.
The agreement compels builders and buyers to follow the Real Estate (Regulation & Development) Act (Rera), 2016. While a standard agreement is being followed in other parts of India, it is being adopted for the first time in Karnataka.
Urban Development and Housing Minister U T Khader approved the draft agreement for sale on November 19 and it is now being sent to the Cabinet for approval. The draft was issued by the government on April 3.
The draft highlights the compensation aspect which was so far not addressed by Rera-Karnataka.
The agreement enables buyers and builders for compensation in case of default as per SBI interest rate plus 2% (total 10.75%). So far builders decided that in case they failed to complete the project on time, their compensation will be from Rs 2 per sqft to
Rs 6 per sqft and in case, buyers default on remittance, compensation ranged from 12%-18%.
The agreement demands that the builder define the carpet area sold to buyers instead of the super built-up area, which is spoken about. It also mandates the builder to define the amenities and facilities like car parking, swimming pool, sewage treatment plant, play area and other committed specifications. The agreement for sale protects the buyers, with five years of structural guarantee.
The agreement makes it mandatory that property be registered upon receipt of 10% or more advance amount from buyers. Earlier, it was just executed on stamp paper of Rs 50 to Rs 200. From this point, the sub-registrar had to keep track about the mentioning of the Rera registration number in the sale agreement.
K-Rera officials said that since the minister had approved it, they were just moving the draft forward. The officials stated this agreement will be uniform across India and binding for builders and buyers to follow, failing which action will be taken.
K V Thrilok Chandra, Inspector General of Registration and Commissioner of Stamps, said this agreement will bring in transparency in dealings, registration and payment of stamp duty. It will not only benefit the department, but will also ensure that the timeline is maintained.
M S Shankar, convenor, Rera-Karnataka chapter, said this will benefit buyers, especially those fighting long battles with builders.