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Venkaiah nods Draft Real Estate Agreement Rules

Timely delivery is the essence

With the stage having been set for a more friendly and consumer-friendly regime after the passage of the Real Estate (Development & Regulation) Act, 2016, the Government has come out with a Draft Agreement for Sale Rules. Besides making timely delivery of possession the essence of the agreement, the draft rules also say that there will be no time-bar for claiming compensation against loss caused to allottee by defective land titles. The rules also stipulate that the total price is escalation-free.

Timely completion of the project and timely delivery of the apartment or plot to the allottee by the promoter is the essence of the agreement to be signed between the promoter and allottee under the recently-passed Real Estate (Development & Regulation) Act, 2016.

This was incorporated in the Draft Agreement for Sale Rules under the Act approved by Housing & Urban Poverty Alleviation Minister M. Venkaiah Naidu, in New Delhi on August 1.

The allottees on their part would be required to ensure timely payments.

A press release issued by the Union Ministry of Housing & Urban Poverty Alleviation firmed up the Draft Agreement for Sale Rules, 2016 applicable for the five Union Territories of Chandigarh, Andaman & Nicobar Islands, Daman & Diu, Dadra and Nagar Haveli and Lakshadweep.

These Draft Rules will now be placed in public domain for comments and suggestions before final notification.

The draft rules which specify the roles, responsibilities and obligations of promoters and allottees besides a Draft Agreement to be signed under the Act between promoter and allottee stipulate that “The promoter agrees and understands that timely delivery of possession of the (apartment/plot) is the essence of the Agreement”. Under the rules, the promoter is required to clearly indicate the date of delivery of possession to the allottee in the agreement itself. However, there is a provision for extension of this date in case of delay caused due to war, floods, drought, fire, cyclone, earthquake or any other calamity caused by nature.

There will be a clear mention in the agreement of date of grant of commencement certificate, clear land title giving the area of project and Khasra numbers, number of stories and plots in the project, carpet area and common area, share of allottee in common area, total price etc.

The total price is defined as including cost of land, cost of construction of apartment and common areas, internal and external development charges, taxes, cost of electric wiring and fire-fighting equipment. The rules stipulate that total price is escalation-free except when development changes are altered.

In case of loss caused to allottee due to defective land title, the promoter will pay compensation to allottee and such claim will not be barred by limitation provided under any law.

The draft rules specify the roles, responsibilities and obligations of promoters and allottees besides a Draft Agreement to be signed under the Act between promoter and allottee.

Under the rules, the promoter is required to clearly indicate the date of delivery of possession to the allottee in the agreement itself.

There will be a clear mention in the agreement of date of grant of commencement certificate and clear land title giving the area of project etc.

The rules stipulate that total price is escalation-free except when development changes are altered.