In a big relief to home buyers, the state government after much delay is all set to approve the model sales agreement as per the provisions of the Real Estate (Regulation and Development) Act.
This will be a binding document for both the builders and the buyers on all aspects related to the sale of a property, including project completion, conditions of sale, down payment and other stipulations.
Housing Minister V Somanna told DH that he had signed off on the file, which is likely to come up for Cabinet approval later this week.
Recently, the Karnataka Real Estate Regulatory Authority (K-RERA) had published the draft notification for the Karnataka Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2020, inviting objections.
The draft, approved by Somanna, is awaiting Cabinet clearance. "The notification is as per the Centre's format. We will implement it as it is. This will help all home buyers, especially the middle class, as the builders will have to conform with the conditions specified under the agreement," Somanna explained.
According to K S Latha Kumari, secretary, Karnataka RERA, this agreement would allow for a uniform procedure for all builders and promoters. "For instance, with this notification, the promoter has to register agreement of sale document if he wants to receive more than 10% of the total property value as down payment. Earlier, there was no security for this amount paid by the consumer. This document will empower the buyers. It will also help them understand well ahead the clauses to which they are agreeing," she said.
This notification, albeit delayed in Karnataka, was much needed, according to M S Shankar, convener of Fight for RERA forum.
"Currently, the agreement is done as per the whims of the builders, with no standard format. They stipulate many conditions that are not valid as per the regulations. As per the draft notification, it will be mandatory for a builder to enter into the agreement only upon receiving all the requisite approvals for the project," he said.
In 2018, the state government had issued the first draft notification, which was not finalised. "The draft had diluted the Centre's guidelines, allowing the builder to start construction before the final layout plan was approved. It also allowed them to seek partial occupancy certificates before the completing the construction. We had opposed this," Shankar said.