Real Estate Regulatory Authority (RERA) declares that buyers of any delayed projects will get interest on the invested amount for the delay period as against 5 to 10 per square feet decided as per sales agreement, as mentioned by the chairman of Madhya Pradesh RERA Anthony de Sa. The current prescribed rate of RERA is 10%.
Anthony de Sa also said that, that only when the developers are ready to pay the buyer interest at the authority’s prescribed rate will their ongoing projects be registered with RERA. The prescribed rate is 2 percentage points above SBI’s MCLR (marginal cost of fund based lending rate) and not like the earlier contractual rates of 5 to 10 per sq ft which was accepted by the builders to pay when the sales agreement was signed. At present, as the SBI’s MCLR is 8% the developers will have to pay 10% interest on the amount paid by the buyers.
Dilbag Singh Sihag, a member of RERA Haryana committee and chief town planner of Haryana government, who is entrusted with the responsibility of finalising the RERA Rules for the state, mentions that for justice there has to be same interest rates to be paid by developers as they are charging the buyers for any delay in payments on outstanding dues and developers in Gurgaon are striving to come to terms with these rules. So, like the 10% interest has been fixed for the developers, similarly the buyers will also be paying only 10% on delayed payments of their dues and not the penal rates of 12% to 18% as per the sales agreement.
Developers normally charge a high rate of 12% to 18% while they are paying only Rs 5 per sqft to Rs 10 per sqft on a project which costs 4,000 to 5,000 sqft. Sihag says this mismatch will be resolved only when both developers and buyers will pay the RERA prescribed rates on any delay. He, also added that no final view has been taken so far.
Chief Secretary of housing urban development, Punjab, Vini Mahajan, who is also appointed as the interim regulatory authority under RERA, says that existing buyers will get relief under RERA, clarifying that the authority is bound by the act and rules while taking the decision. So, it will only enforce the contract signed between buyers and developers with regards to RERA rules and cannot go beyond the act.
Regulators also stated that wile registering ongoing projects, developers can set their own deadline for completion of their projects, but it has to be a reasonable one. Anthony de Sa said that, say if a project was launched some eight years back and the developers returns for its registration asking for another four years for finishing it, such things cannot be granted. There is no rule book for fixing the deadline, which depends on the existing condition and stage of implementation of the project. But, once the deadline is fixed and developer fails to meet it, the regulator will take a very harsh view – he will either have to return the money back to the buyers with its interest or face dire consequences, including even a jail term, says Sihag.
RERA also assures that it will facilitate the completion of projects in time, so that all buyers are satisfied and only if the developers fail to achieve this goal, there will be stern actions taken by the regulators, which shows that apartments in Gurgaon are definitely a fair deal when one thinks of investments.