Many times Home buyers get the short end of the stick when it comes to dealing with builders and real estate agents.
The unfortunate truth is that many buyers have faced similar numerous problems and this has given the entire transaction a bad name.
Whether it is delayed projects, poor construction quality, delayed possession, diversion of funds or even arbitrary change in layout plans, most buyers have faced this and accepted this as the grim reality, in silence.
This was because there was no regulation in place for builders and no standardization as such. If any buyer wanted to take up cudgels against a builder, they had to opt for legal recourse, which is expensive, time consuming and definitely not easy.
But times are changing.
With the passing of the Real Estate (Regulation and Development) Bill in the parliament, home buyers will find a much more positive atmosphere.
Here’s a quick look at how buyers can benefit from this bill and what it means to the real estate industry.
Builders will no longer be able to launch projects at their whim. Before they can launch a new project, the Bill will ensure that they have to get clearance from the relevant regulatory and Planning Authorities and only then, they can go ahead.
This means that buyers will invest their hard-earned money into legitimate projects only. Also, the pre-launch discount option, which is mostly a marketing strategy to get more buyers will also have to make way for reliability. Fly-by-night operators will not be able to survive this stringent clearance policy.
One of the biggest grouses that buyers have, is that builders divert the money they receive from them towards newer projects. However, once this Bill becomes a law, then this will not be possible.
The Bill states that money from buyers has to be deposited in a separate bank account, and 70% of that money has to be utilized in developing and completing the project in question. This will definitely reduce delays in the project.
Often, buyers are tempted into investing into real estate, because they see the wonderful ‘artist’s depiction’ of the project that is being planned.
Also, most builders release snazzy advertisements and their marketing plans are enough to floor even the most hardened buyers.
But what happens when expectations don’t meet reality? When the advertised home doesn’t match what the buyer finally gets? Crushing disappointment and a sense of being taken for a ride.
However, once the new Bill is in place, builders will have to return the amount to the buyer, with interest, if the final project doesn’t match what was depicted. This will definitely put a stop to reckless promises from builders as they have to tread carefully.
At times buyers are unable to verify the claims of the builders regarding their quality. This will no longer be the case once this bill becomes a law.
Home buyers will be able to verify the quality of the builder’s prior constructions because the bill makes it mandatory for developers to provide details of projects launched in the past five years.
This includes a brief detail of the projects launched by the promoter,in the past five years, whether already completed or being developed, including current status of projects, delays in completion, details of cases pending, details of type of land and payments pending etc.
This means that buyers can now make an informed and wise decision before choosing the builder for their dream home.
Face it. This has happened with most buyers who take possession of their home and a couple of years later, find that paint is peeling or there are leaks in the pipes. The honeymoon period is over because buyers were liable for repairs for 1 to 2 years.
But with the new Bill, this will also change. Builders will be held liable for any structural defects up to five years now, to ensure that they will make the necessary repairs.
So far, so good. This pro-buyer bill doesn’t spell a death knell for builders. It just streamlines processes that have been all over the place until now and ensures that both parties are satisfied.
In the bigger picture, regulation for builders makes housing more affordable for everyone and that is certainly a good thing.
Ramesh Kumar has extensive experience in real estate in a career spanning over a decade. With his critical expertise in sales and marketing, he has successfully launched and closed out projects across a complete spectrum of properties like plots, budget apartments, comfort homes as well as luxury villas.
Ramesh Kumar holds a Post Graduate Diploma in Management from Bombay University and is currently serving as the Deputy General Manager – Marketing & Sales at Vakil Housing.