Now, buyers of flats can take over project abandoned by builder
New law allows home buyers to turn developers, sell 10% of land to raise money for construction if builder scoots midway through project
If your builder vamooses without completing your project, or if he fails to fulfil his promises, then as a home buyer you no longer have to worry. By allowing buyers to turn into developers in such a case, the state government has now armed you with the powers to finish the housing scheme yourself.
While the new Maharashtra Housing Act has introduced a rule that allows a group of homebuyers to go ahead and develop projects left incomplete by the builder, the icing on the cake is that you do not even have to worry about the money.
The act makes it mandatory for every developer to keep 10 per cent of the land reserved to enable buyers to raise money by selling it if they are left in the lurch. The developer cannot sell the reserved land till he completes the project and hands it over to the buyers.
The recently passed law also promises stern action against any builder who leaves a project incomplete. Housing Minister Sachin Ahir said the innovative provision in the law would make builders more responsible, while enabling buyers to take on errant builders.
“Under this law, the builder will have to keep 10 per cent of the total land in reserve,” Ahir said. “If the builder defaults on his promise, then the authority concerned will, via an escrow agent, take over the land and it will be handed over to 60 per cent of the home buyers. The buyers, by selling this piece of land, can go ahead and develop the building.” Buyers have welcomed the housing regulatory law, calling it one of the most beneficial acts when it comes to safeguarding their interests.
“This particular part (keeping 10 per cent of the land reserved) in the new regulations was one of the suggestions made by us, and I am happy to see that it has come through,” said Ramesh Prabhu, chairman, Maharashtra Societies Welfare Association. “The builders, with such a huge portion of their project kept in reserve, will not dare to think of risking the project now. This is because even if 10 flats are formed on the 10 per cent reserve land, it means a huge chunk of the builder’s profit, which he wouldn’t like to lose.”
Prabhu said the act will make builders submit their entire proposal to the authority concerned, thus helping the government understand their construction plan and know the number of flats in the project, besides many other construction details. “This will make the whole construction business super-transparent,” Prabhu said.