Property in Noida: The Uttar Pradesh government has taken a new decision regarding the real estate sector. This has increased the heartbeat of the builders. Actually, this provision is about getting the builder-buyer agreement registered. On this provision, the builders say that it will increase unnecessary expenses.
This is the current trend in Delhi NCR. Usually when people buy a house or flat, they do not pay the entire amount to the builder in advance. Usually buyers make a builder-buyer agreement by paying 10 percent of the amount. After this, when the flat is ready, after paying the full amount, the builder registers it in favor of the buyer. But a new decision of the Uttar Pradesh government in this regard is increasing the tension of buyers as well as builders. In this, it has been asked to get the builder-buyer agreement registered as well.
What is the new decision of UP government
Financial Express has given a report about this. It says- The UP government has decided that if a buyer makes a builder-buyer agreement on payment of 10% of the flat price to the builder, then it will also have to be registered. This decision has created a lot of apprehension among both buyers and developers. It is mandatory for home buyers to pay one percent of the property value as stamp duty to ensure its registration in government records. Additionally, they will also have to pay a registration fee of 1% of the property value to finalize the documentation in Noida and Greater Noida.
Different from the existing policy
This policy of the UP government is different from the practices followed in other states. In those states, the sale agreement usually includes minimum stamp paper charges ranging from Rs 1,000 to Rs 10,000. Currently, the buyer and the builder enter into a preliminary agreement on a stamp paper of Rs 100. The authority gets involved only when the developer gets the Occupancy Certificate and the Completion Certificate of the project.
Expenses will increase
Although the rationale behind implementing this decision is to protect the rights of flat buyers, it will also fill the government’s coffers through stamp duty. However, the tripartite agreement will also include the specifications of the property, the total cost, payment terms and the date of possession. Nevertheless, industry leaders highlight the possible implications of this mandate. They say that it will have an impact on both home buyers and the real estate sector.
Trouble for no reason
Financial Express quoted Manoj Gaur, CMD of Gaurs Group and Chairman of CREDAI National, as saying that this would not be a favourable practice as it puts unnecessary financial burden on homebuyers. They have to arrange a large amount upfront at the time of booking. In other states, the sale agreement is processed on nominal stamp papers between Rs 1,000 and Rs 10,000, which is not the case here. The proposed 1% non-refundable registration fee that is part of the provision is also a direct loss for buyers. The lack of clarity on the refund policy in case of cancellation adds to the anxiety.
Up to 20 percent of bookings are cancelled
Gaur says that generally 15-20% of bookings in any project are cancelled due to various reasons. This is also mandated by RERA. However, ‘the new regulation will significantly impact the financial condition of buyers who want to cancel their bookings, as they are already facing unexpected challenges.
Obstacles to the development of the real estate sector
Gaur believes that this provision will hamper the sector to a great extent in Noida, Greater Noida, Yamuna Expressway and in fact the entire state. The real estate sector has emerged as a major part of the state’s economy. Therefore, he believes that this provision should not be considered as it will hamper the growth of the state’s real estate sector.
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