I am writing this because of a large number of calls that I am receiving on this topic.
These answers are correct for the state of Maharashtra, but I am not sure about other states.
People are getting letters from the builders saying “Register your flat immediately, or we will cancel your booking”
- No, the builder cannot cancel your booking. You can go to the nearest police station and lodge a complaint of cheating against the builder. You can also go to the consumer court.
- Under MOFA (the previous real estate regulation), registration should be done after 20% payment and under RERA, registration is mandatory after 10% payment.
- Why have the builders suddenly woken up and are pestering you to register? Read on.
RERA has come into force on the 1st of May, but the government has given builders time till 31st July to register their projects. The builders are trying to get you to sign an agreement that is not RERA compliant. There are various protections that are available under the RERA compliant agreement. So, if you want to get your property registered, do so, but insist on a RERA compliant agreement. Ask for a draft copy and ask a lawyer to go through it and check if it is RERA compliant. They also have to mention the actual carpet area without all the nonsense about horizontal surfaces, balconies, flower pots, etc being included. You’ll be surprised at how small the flat is.
Builders are telling clients that since they have already applied for an OC before 1st May, the project does not come under RERA. This is wrong. All projects that have not RECEIVED the OC prior to 1st May need to register under RERA. However, even if a project has been completed a year back and has received an OC and the builder is doing the registration now, the agreement has to be RERA compliant since the rules have come into force on the 1st of May for all ‘Sale by builder’ transactions.
“GST at 12% is applicable from 1st of July, get the registration done before that or you may have to pay extra”
Again, totally false. GST does not cover Stamp duty and Registration charges, so there cannot be any increase in registration expenses due to GST.
Most of the guys that call me, eventually end up saying “Who is going to go through all the hassle, it is better to just register it”. The problem is, later on, if there is a problem with the builder over leakage or some parking issues or some payment terms, people blame every body else – the builder, the government, the society secretary, etc, etc. but when you have the power to rectify things, it is rather inconvenient to stand up for yourself !!
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