Noida’s New Rule: Tripartite Agreements To Protect Homebuyers
The Noida Authority has implemented a significant change in the way real estate transactions are conducted within the city. This new policy mandates a tripartite sale agreement, involving the buyer, builder, and Noida Authority, to be signed at the time of purchase for all new housing projects. Previously, government involvement only began after the developer obtained occupancy and completion certificates for the property.
Combating Dubious Sales and Boosting Transparency
This new regulation aims to address a critical issue: the lack of transparency in real estate transactions. The tripartite agreement ensures that the identity of the property buyer is recorded upon the initial payment, eliminating the possibility of developers reselling the same unit to multiple buyers. This practice, unfortunately, has plagued Noida’s real estate sector in the past, leading to significant distress for unsuspecting buyers.
Benefits for Homebuyers and Government
The new agreement structure offers several advantages for homebuyers. Firstly, it provides them with formal proof of purchase right from the outset, with their names documented in the stamp and registry department records. Secondly, this approach prevents developers from arbitrarily cancelling sales based on reasons like payment delays or missed project timelines.
Furthermore, the tripartite agreement strengthens the government’s position by boosting stamp duty revenue collection. Previously, buyers could potentially sell units back to builders before taking possession, thereby avoiding stamp duty payments. The new system eliminates this loophole by involving the Noida Authority from the very beginning of the transaction.
Alignment with RERA Regulations
The tripartite sale agreement aligns with Section 13 of the Real Estate Regulation and Development Act (RERA), which prohibits developers from accepting more than 10 per cent of a property’s cost as an advance payment without a written agreement for sale.
Implementation Process
As per the new policy, upon paying the initial 10 per cent of the property price, the agreement will be executed through the registry department. During this process, an upfront payment of two per cent stamp duty is required, with the remaining balance due at the time of possession and final registration.
Expert Opinions
Real estate advocate PPS Nagar believes this new rule will significantly enhance transparency, primarily benefiting legitimate buyers and preventing tax evasion. He highlighted instances where developers, in the absence of proper checks, would allot the same flat to multiple buyers, causing significant issues when buyers attempted to take possession. Under the new system, developers are obligated to notify the Noida Authority of every property transfer.
This move by the Noida Authority is a positive step towards ensuring a more secure and transparent real estate market for both buyers and the government.