The cries of home buyers has reached the Prime Minister of India. A pan-india group called, Fight for RERA has reached out to PM Narendra Modi, seeking an amendment in the Insolvency and Bankruptcy Code 2016, to look into homebuyers interests in insolvency proceedings.
So what does the group, Fight for RERA want? Simple...It wants the Government to provide powers to the realty regulators through the Real Estate (Regulation and Development) Act, 2016. The purpose....attach the assets of all the companies under the same promoter group, including their personal wealth to get the money to complete unfinished projects.
This group wants more, it wants banks who have given home loans to home buyers who are stuck in delayed projects, to stop collecting home loan EMI's from them. The poor citizens have not only to pay the home loan EMI's, they also have to pay the rent. This is a twin burden of paying both, Home loan EMI + Rent.
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You must have heard the saying, Prevention is better than Cure. Yes, unscrupulous builders cheat their customers and if you don't want your life's savings to fall prey to these builders, pay heed to these tips.
RERA came into force on May 1st 2016. The Real Estate (Regulation and Development) Act, 2016 (RERA) looks to protect interest of home buyers and boost investments in the real estate sector. For many years, real estate transactions have always favored builders. RERA will change all that. RERA has some rules which builders have to follow, otherwise strict action will be taken against them.
Make sure that any under construction property you buy is RERA registered. Under RERA rules, all ongoing projects which don't have a completion certificate, must be registered under RERA within a certain date.
Some of the rules under RERA are, Builders can sell projects only after necessary clearances, Buyers pay only for carpet area, developer has to put 70% of the money collected from buyers in an escrow account, a developer has to repair structural defects in the project for 5 years and so on.
Opting for a RERA approved project can save your hard earned money.
You want a reputed builder to construct your apartment? You better be careful. Many builders are becoming bankrupt these days. You better check the track record of the builder, before parting with your hard earned money. Find out how long the builder has been in the construction business. Check out his website for the list of completed and ongoing projects.
Never fall prey to flashy advertisements and schemes. Check out articles and reports under the builder's name. If the builder has been involved in any legal or financial issues, it will come up.
Talk to the builders existing and past clients. If they have any complaints against the builder, they might tell you. Check out the builder on social networking sites. This is a great way to find out if the builder has delayed any constructions or delivered what he has promised.
Go on a site visit. You might get tired, but the efforts are worth it. Visit completed as well as ongoing constructions/sites of the builder, to get an idea of the quality of the construction.
Banks are sitting on a mountain of Non Performing Assets (NPAs). Banks today are very careful when financing projects of builders and do a lot of due diligence. Banks check the documentation of the builder before financing their projects. If the builder is financed by leading banks, it could be safe to opt for his projects.
Banks are playing safe and financing RERA approved projects.
Not sure if your builder has been financed by a reputed bank? Avail a home loan from the bank and buy your apartment. Banks do a strict legal/document verification before sanctioning your home loan. You save time, effort and the hassle required to check the authenticity of the title and other documents of the property.
Availing a home loan from a reputed bank gives you a safety net while buying a property. Yet, it's always good to examine the property documents yourself before buying your apartment.
Yes, you know 4 ways to protect your hard earned money from greedy builders. Now it's up to you to make the final decision before buying your apartment. You are not buying a fridge or a washing machine. The savings of your entire life may be at stake. So make an informed decision before buying that apartment. Be Wise, Get Rich.
Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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