Project delay could add interest on the invested amount of the homebuyers of delayed projects. The Real Estate Regulatory Authority's (RERA) has defined an interest rate of 5 per sq ft to 10 per sq ft contracted in the sales agreement on the booking amount for the delay period. The chairman of Madhya Pradesh RERA Anthony de Sa confirmed this on FICCI organized press conference. RERA’s prescribed rate as noticed is 10% at present.
In this conference another major fact was declared that builders won’t be jammed from advertising and marketing their on-hand projects, over and above they need to register their on-hand projects on by July 31. Quoting this press release West Bengal RERA expert
Mr. Somani said, “For the sake of the accuracy of this revelation government should serve letter consisting the same matter to all individual registered builders of the country.” Thus existing projects doesn’t have to wait for the registration for advertisement or other co-related promotional activities.
Developers who can’t market their projects are those who won’t register their project under respective regulatory authorities (RA) of the states by July 31. By far, there are 14 states and UTs have been in the process of notifying their RERA norms. Others are engaged in completion of their drafts. MHUPA hopes that the remaining states will notify their respective rules by July 31.
Overdue on-going housing projects will be registered with RERA only if the builder pays buyer interest at the authority's approved rate, i.e. - 2 percentage points higher than SBI's MCLR (marginal cost of fund based lending rate), and not the statutory rates of 5 per sq ft to 10 per sq ft which builders had customary to pay as per the sales agreement. Currently, as SBI's MCLR is 8%, builders will have to pay 10% interest on the booking amount to the consumers. Meanwhile, buyers will also pay the same interest at 10% on late payment of their dues and not the penal tariff of 12% to 18% as defined again in the sales agreement.
As of now, developers ask a high rate of 12% to 18% though they pay only Rs 5 per sq feet to Rs 10 per sq feet on a venture which costs 4,000 to 5,000 per sq ft. This disparity will only be solved when both of parties will be asked to pay the RERA prescribed rates. However, no extreme decision has been taken as of now on this very matter.
- Somani Realtors News Network