Planning to buy a property? Rera has issued a warning. Read this before investing

economictimes.indiatimes.com:

Real Estate Regulatory Authority (Rera) in Uttar Pradesh and Haryana have cautioned the home buyers to do due diligence before investing in any property. The Uttar Pradesh Rera has asked both developers and buyers to not pay or ask over 10 per cent payment for any property before signing Builder Buyer agreement.

According to Section 13 of the UP-Rera Act, no developer is allowed to take an advance of more than 10 per cent of the total cost of a flat, plot, or building before the sale agreement is executed, a TOI report stated.

The advisory comes in response to multiple complaints about developers demanding excessive advance payments. Some buyers have been asked to pay more than 10% as an advance, while others have been asked to make payments even before the sale agreement is signed.

Sanjay Bhoosreddy, the UP-Rera chairperson, emphasized that under no circumstances should a builder charge more than 10% of the unit cost as an advance, and even then, it should only be done after the sale agreement is ready.

This advisory aims to ensure accountability and transparency in the business relations between developers and homebuyers.

The sale agreement should include all project details, such as construction dates and information about internal development work. It should also specify important payment dates and methods, as well as the date of possession.

Additionally, the agreement should outline the rate of interest that both the developer and the buyer should pay in case of defaults. These rates should adhere to the Marginal Cost of Funds Based Lending Rate (MCLR), with an additional 10% in specific cases.

The MCLR is the minimum rate of interest benchmarked for banks.

Meanwhile, the Haryana Real Estate Regulatory