5 ‘Acts’/Property Laws Every Homebuyer Should Understand Before Buying A Home
- 12 January 2021
Buying a home is not as complicated as it’s made out to be and all the main laws that you need to know while buying a home are demystified in this article. The first step towards purchasing a property is to understand that all project details are available on the website of the Real Estate Regulatory Authority of the state under the Real Estate (Regulation & Development) Act, 2016 (RERA). Information regarding the title, amenities and possession timelines of the project are available on this website, together with details of building construction progress, clubhouse, etc. as updated by the developer. RERA ensures that your payments to your developer are in the escrow account monitored by the Authority and that the developer is permitted to withdraw from this account only upon providing proof of construction and use of the amounts by submission of an architect, engineer and CA certificate. In case of any delay, the developer is required to pay compensation per RERA guidelines. Alternatively, you can withdraw your booking and seek refund with compensation. Also, once the plans for the property are approved by the authority, the developer cannot amend it without two-third consent of all the homebuyers in the project.
After you have selected the property, you should seek execution and registration of the agreement for sale for the property by paying stamp duty as per the Indian Stamp Act/as per the State laws and registration fees as per the Registration Act. This is the title document for your property. Instead of a sale, you could also consider a lease, exchange or gift of a property as per The Transfer of Property Act.
You must ensure that the payment of consideration for the property is being made by the person in whose name the agreement/sale deed is being registered so that there is no violation under The Benami Transactions (Prohibition) Amendment Act, 2016. Benami transactions are when a person’s own name is not used and instead, the name of another person or a fictitious person is used to purchase a property; or where the owner of the property has no knowledge of his/her ownership; or where the person paying the consideration is untraceable. Permissible exceptions include property held by a member of the HUF (Hindu Undivided Family) for its benefit; or a person holding property in a fiduciary capacity; or any individual holding property in the name of his spouse or child; or an individual holding property jointly with a lineal ascendant/descendant.