The Karnataka government is set to roll out sale-of-agreement rules to insure property buyers from delays in project delivery. This is also to ensure buyers are delivered all amenities promised in the contract. The government will soon notify rules on sale of agreement to provide a level playing field to buyers and sellers, as mandated under Karnataka RERA Act.
“We are compiling suggestions and objections received from buyers and sellers. And we're planning to send the final rules to the law department for approval this week,” said R Vinoth Priya, secretary of Karnataka Real Estate Regulatory Authority (RERA).
A key deterrence is a clause that says property buyers must be compensated for delay in delivery of the project. Once the government issues the notification, the buyer and seller must honour the possession date and the amenities agreed upon in the sale of agreement.
As per the proposal, if the promoter fails to meet the project deadline, he or she has to return the total amount along with interest at the rate agreed upon in the agreement. If the buyer stays on the project despite delays, then the promoter should pay him or her interest for every month of delay till the possession of the property is handed over. Similarly, if the buyer fails to pay the developer and continues to default for a certain number of months, then the developer can end the agreement and scrap the allotment made to the buyer. The developer deducts the booking amount and interest liabilities from the amount payable to the buyer.
The new rules allow buyers and developers to amend the agreement only with mutual and written consent. These conditions do not apply if the project is delayed by factors beyond developer's control like war, floods, cyclone or drought.
