Buying a flat in India is easier than ever before
The BJP government has passed the RERA bill stating that the new Real Estate Regulatory Act (RERA) comes into effect from May 1, 2016. Each state of India must create a real estate Regulator in compliance with the new laws aimed at making the real estate transactions buyer friendly. Until now the Real Estate sector was dominated by the promoters and involved a lot of corruption, nepotism and customer abuse. RERA or the Real Estate (Regulation and Development) Act has brought transparency and fair practice in this sector. The implications of RERA may take some time to come into effect, but when it does, it is bound to benefit the customers.
One of the clauses in the new law states that the builder will have to put 70% of the money collected from the buyers as booking amount in escrow accounts. This money can only be used for building the project for which money has been collected and no other project can be developed with this amount. This will end the practice of builders collecting money in the name of flat bookings and use it to develop other projects. This will enable timely handover of the completed stock to the customer. Also with the previous model, if something went wrong with the builder’s finances the buyers had a tough time getting their money back. The escrow account will help to eradicate this situation.
According to a study by Institute for Public Finance and Policy, 40% of the money used to buy real estate was from Black money. The builders had strong nexus with the politicians and laundered money for them in exchange of favors like land acquisition and construction approvals. The fortune of many builders depended upon which party was ruling in the assembly.
The Modi government should be applauded for putting the foot down on the corrupt practices by the builders of the country syndicating with the politicians. The new laws allow the tax authorities to chase those who have hoarded the black money in real estate through cut-outs. The real estate regulator can now keep off builders with shady background and dubious finance from entering the market. The new Insolvency and Bankruptcy Board of India aims to remove the deadlock over the insolvent builders and their hundreds of incomplete projects. Now the homeowners can be relieved of the fact that their down payment will not lead to years of legal proceedings, political malpractice or a court order stating that the construction is illegal.
Now is the favorable time to invest in Real Estate. If you wish to purchase a property in Kolkata, you can get all the guidance and services from one of the first real estate advisory services company called kolkataproperties.in. This website presents hundreds of choices of flats and other types of houses and properties which you can browse through and select your best option. You will get legal and other services in this one-stop destination for all things real estate.