ExpressIndia has some good information.
Pune * Agreement of sale should only mention the carpet area and not saleable or built-up area
* Builders have to provide one car park for tenements having carpet area of more than 80 sq m (861 sq ft) without any extra charges to the buyer
* Common terrace cannot be sold to an individual
* Terrace garden should be charged only one-third the rate fixed for the flat
These are some of the areas that lawyers and activists point out to potential buyers, saying they should be vigilant and not blindly sign on the dotted line like before. Even as property buyers in Pune are waking up to a new reality — that they may have been getting the short shrift from the builders for long.
Most builders mention only the built-up area in agreements; they make all customers cough up an extra Rs 1.5-2 lakh for stilt parking; many of them charge half the rate fixed for the flat for terrace garden and at least a few even charge 50 per cent for loft space; advance payment should be only 20 per cent of the sale price and that too has to be made only after a written agreement of sale and not on the basis of allotment letters.
“One area where the buyer is at the receiving end is the improper measurement of the flat he buys. Unlike in any other product, an apartment is one purchasable commodity where the buyer has to blindly believe what the builder says and has no recourse to validating it,” said a city realtor, not wishing to be quoted by name. This is over and above the fact that a 1,000-sq ft flat mentioned as saleable or built-up has only 700-750 sq ft as carpet area, he said.
“All these are in complete violation of the Maharashtra Ownership Flats Act 1963 (MOFA) and development control rules of the Pune Municipal Corporation,” said High Court advocate Yogesh Mehta. “Any violation is a penal offence where conviction can be imprisonment for a term extending up to one year.”
The MOFA Act 1963 also helps purchasers in cancelling an agreement if they do not get possession of the property in time. According to Section 8 of the Act, if the purchaser is not given possession as per the agreement, the purchaser can cancel the agreement and claim the money back at a nine per cent interest. “Most buyers do not know this clause and are made to wait,” Mehta said.
Promoters and Builders Association of Poona chairman Lalit Kumar Jain said all builders have to abide by the MOFA Act. “We have control on the 260 members of our association. If there is any violation we are willing to take it up. We have no control on the others,” he said.
RTI activist Vivek Velankar said most buyers are not aware of these rules and those who feel bold enough to point them out to builders are not entertained.
Pune * Agreement of sale should only mention the carpet area and not saleable or built-up area
* Builders have to provide one car park for tenements having carpet area of more than 80 sq m (861 sq ft) without any extra charges to the buyer
* Common terrace cannot be sold to an individual
* Terrace garden should be charged only one-third the rate fixed for the flat
These are some of the areas that lawyers and activists point out to potential buyers, saying they should be vigilant and not blindly sign on the dotted line like before. Even as property buyers in Pune are waking up to a new reality — that they may have been getting the short shrift from the builders for long.
Most builders mention only the built-up area in agreements; they make all customers cough up an extra Rs 1.5-2 lakh for stilt parking; many of them charge half the rate fixed for the flat for terrace garden and at least a few even charge 50 per cent for loft space; advance payment should be only 20 per cent of the sale price and that too has to be made only after a written agreement of sale and not on the basis of allotment letters.
“One area where the buyer is at the receiving end is the improper measurement of the flat he buys. Unlike in any other product, an apartment is one purchasable commodity where the buyer has to blindly believe what the builder says and has no recourse to validating it,” said a city realtor, not wishing to be quoted by name. This is over and above the fact that a 1,000-sq ft flat mentioned as saleable or built-up has only 700-750 sq ft as carpet area, he said.
“All these are in complete violation of the Maharashtra Ownership Flats Act 1963 (MOFA) and development control rules of the Pune Municipal Corporation,” said High Court advocate Yogesh Mehta. “Any violation is a penal offence where conviction can be imprisonment for a term extending up to one year.”
The MOFA Act 1963 also helps purchasers in cancelling an agreement if they do not get possession of the property in time. According to Section 8 of the Act, if the purchaser is not given possession as per the agreement, the purchaser can cancel the agreement and claim the money back at a nine per cent interest. “Most buyers do not know this clause and are made to wait,” Mehta said.
Promoters and Builders Association of Poona chairman Lalit Kumar Jain said all builders have to abide by the MOFA Act. “We have control on the 260 members of our association. If there is any violation we are willing to take it up. We have no control on the others,” he said.
RTI activist Vivek Velankar said most buyers are not aware of these rules and those who feel bold enough to point them out to builders are not entertained.
13 comments:
Thanks for this article. I intend to buy a flat sooner or later(more later than sooner)..One thing I have been observing is the amount of fraud -
1> realtors,
2> brokers,
3> bankers,
4> society etc.
perpetrate on the poor buyer. A lot of people cut corners and save money with a lot of pain and also go into forced slavery for the dream of owning a house. And what happens? You have all manners of criminals and con men at each and every layer. Tips and guidances including a consumer movement to eradicate these scourge would go a long way in helping the middle class retain its wealth and plonk it into things like Education, Early retirement and entrepreneurship and much more which will benefit all. Criminals hoodwinking such buyers results in more black money and money which gets deposited in swiss banks or else vulgarly thrown around at Chandni bars...
Could we organise into sections covering -
1> A frauds section (beware of these kind of frauds by these kind of people in these kind of places..)
2> Do's and dont's for Buyers
3> Decision Making / Negotiation(with Investors/Builders and Bankers)..
Plus, some brainstorming which will help buyers meet their goals more effectively. And all this for free :)
Regards.
Please refer the town plan to understand your neighbor hood.
http://www.punecorporation.org
http://www.rediff.com/money/perfin/
2000/jun/30prop.htm
http://www.iba.org.in/legal/
SECURITYLAWSININDIA1.doc
Society formation.
http://www.accommodationtimes.com/
freesection/CHS_Article_01.htm
http://www.microchsm.net/pdf/Society.pdf
Check List
http://www.geocities.com/s_pravin/
RealPlus/Legal.html
Great ideas. Bharat
Lets narrow down on an agenda for buyers. Information is key before jumping into probably the single biggest monetary investment in one's lifetime.
Great Idea Bharat and Vik. That'll be real helpful for people who are waiting on the sidelines.
HI Vik, Bharath,
I think as a good start, labels can be added to the different blog posts ... This will help readers find out blog posts related to certain issues.
-Venkatesh
Nerul’s ‘cheating’ builder told to pay Rs 4 lakh to family
Excerpts:
Advocate Vinod Sampat advises that property buyers insist on a letter of allotment while making the initial payment
• The allotment letter should contain the carpet area of the flat, price and mode of payment
• Under the provisions of Maharashtra Ownership Flats Act, a builder has to enter into an agreement with the buyer on receiving 20 per cent of the property's price
• The agreement should mention the time frame within which the buyer will be given the property
• Sampat says that buyers should also check with the builder for other charges such as maintenance, gymnasium charges and corpus fund, as these are not often disclosed at the time of purchase
Buyers negotiate prices as demand, property value dip
Mr Dutt said there has been a correction of 30-40 per cent in the secondary market of central Mumbai, and of 10-15 per cent in the primary market. In the suburbs, developers of some projects are holding on, while others have come down by 10-15 per cent.
In Bangalore, the primary sales market saw a ray of hope when Sobha Developers officially came down on their asking rates by eight per cent about two months ago. However, no other developer has overtly announced any reduction, though reductions do take place during direct negotiations. This is despite developers seeing a 70-75 per cent drop in sales.
In Delhi, quotes on the secondary residential market have come down by 7-8 per cent with a further reduction of 3-4 per cent known to happen on actual negotiation. The highest incidence of price corrections has been in the suburban parts of NCR.
In Pune, price reductions are still largely a prerogative of individual developers. Those who have sold 85 per cent or more of the flats in their projects are holding on, while dips are increasingly evident among those who have sold 50 per cent or less. Overall, there has been visible softening of rates by 15-20 per cent per cent.
In Kolkata, there is no softening of prices in the primary sales market. Even negotiation with an intention to buy makes no impact. Most transactions are happening on the secondary market, where a substantial rate drop of 20 per cent is noticed.
Freeze after the frenzy
After months of smiling through the turbulence, the builder community in Pune is finally admitting that not a single sale has happened during the October-December quarter.
This was despite a series of attractive offers, ranging from a kilogram of gold to luxury sedans, for signing on the dotted line. No surprises that the going rate for residential properties has taken a southward turn as builders make corrections consistent with market demand.
According to Rohit Gera, joint managing director, Gera Developments, and vice-president Pune Builders and Promoters Association, the price cut is location specific and ranges from 15 per cent to 30 per cent.
With the meltdown hitting the IT sector substantially, naturally the impact here and in regions along the Mumbai-Pune expressway is the maximum. says Jayant Kaneria, MD, Mont Vert Homes. “Areas like Pashan, Baner and Wakad have seen correction of 15-25 per cent from recent peak prices, and are now attractive at new lows,” he adds.
Seems like buyers are uniting to fight builder using website.
Neelkanth Kingdom, Vidyavihar, Gatkopar, Mumbai
Good idea, bharat, vik.
The buyers need to be aware of the builder lobby frauds.
If only buyers could wait for another 2 years, the prices and the conditions of sale agreement will be dictated by the buyers. Now one has to negotiate and in two years one can dictate.
Suresh D
I think the irrational exuberance has vanished from everyone's mindset now. The denial mode over and acceptance is coming! This opportunity can be used to turn the tables on the Builders by forming a buyers lobby. There is fantastic discussion thread on this website called trak.in that I was following. It measures the way the bubble built up and finally went Phussss. Anyone who is monitoring the bubble must read the messages in the thread which starts in 2007 at the peak of the bubble and is still continuing.
Off late the original writer of that blog Mr Arun Prabhidesai has decided to form a buyers association in Pune who will bargain with the builders.
Provided that the association remains ethical and registers with the government, this looks like a good move to prevent greedy builders from dictating terms.
Please read the thread here http://trak.in/tags/business/2007/08/02/indian-real-estate-prices-forecast-and-future-should-i-buy-house/
http://www.r2iclubforums.com/forums/f25/beware-punes-notorious-builders-5759/
I wish in Pune , Flat Owners Association be formed and registered.Such organization should verify all sale agreements of individual buyers, at some cost , and advise the non compliance with MOFA.Even builder and developers can get their typical sale agreements endorsed by such organization. This will ensure total compliance with law and harmonious relations between each other.This will help in healthy growth of real easte developments
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