In a significant move aimed at fostering transparency and accountability in real estate transactions, the Real Estate Regulatory Authority (Rera) in Uttar Pradesh has issued a crucial advisory regarding the payment module for property projects. The advisory serves as a reminder to both developers and homebuyers that no advance payments should be made unless the Sale Deed is duly executed.
Citing Section 13 of the UP-Rera Act, the advisory explicitly states that no developer is permitted to take an advance of more than 10% of the total cost of a flat, plot, or building. Crucially, this advance can only be levied after the builder-buyer agreement has been officially signed. The move comes in response to multiple complaints regarding the improper collection of advance payments by builders.
Sanjay Bhoosreddy, the Chairperson of UP-Rera, emphasized the importance of the advisory in maintaining accountability on the part of promoters and ensuring transparency in their business dealings. He clarified that charging more than 10% as an advance payment is a clear violation of Section 13 of the UP-Rera Act.
The advisory serves as a guideline for both promoters and homebuyers, outlining the correct procedure and timing for payments. The sale agreement, according to Rera officials, must contain comprehensive details about the project, including construction timelines, internal development work particulars, payment schedules, and the possession date. Furthermore, it should specify the rate of interest applicable in case of defaults, aligning with the Marginal Cost of Funds Based Lending Rate (MCLR) plus an additional 10%.
MCLR, defined as the minimum interest rate benchmarked for banks, plays a crucial role in determining the permissible rates in real estate transactions. By adhering to these guidelines, the sale agreement becomes a comprehensive and transparent document, safeguarding the interests of both parties involved.
In conclusion, the Uttar Pradesh Rera advisory underscores the importance of following legal and ethical practices in real estate transactions. Homebuyers are urged to exercise caution and insist on adhering to the guidelines laid out in the advisory to ensure a smooth and transparent property buying process. Stay informed, stay compliant.