In a major move towards bringing transparency to the country’s real estate sector, the government has brought into force a much-awaited law to protect buyer interests.
The act has taken the regulation of property developers and builders to a whole new level, greatly increasing buyer protection.
Among other things, buyers will be entitled to a full refund if they don’t get possession of the property within a stipulated period of time while a developer will have to pay an annual interest rate of 10.9 per cent to buyers if a project is delayed.
The developer will also have to disclose every aspect of a project and give details of the original sanctioned plan, changes made, total funds collected from buyers and actual money spent.
In addition, it has to report quarterly progress with photographs and sales details and keep 70 per cent of the unused funds collected for a project in a separate account.
Till now, developers are able to channel funds to their other projects.
Experts say the law will go a long way to bring transparency to a real estate sector now plagued by corruption and red tape. The law also lays out penalties that developers can charge for late payments.