The government has proposed guidelines that enforce rental contracts and protect the rights of landlords as well as tenants. As per the draft Model Tenancy Act, 2020, the government has laid down various proposals. Some notable features include:
Do let us know you views about Model Tenacy law.
Transferring the loan is viable option but there are certain points to be considered before doing so.
Consider someone who has an outstanding home loan of ₹50 lakh at an interest rate of 7.5% ,and the remaining tenure is 15 years. The borrower would end up paying ₹33.43 lakh as interest. If another lender offers an interest rate of 7%, the interest rate payment for the loan tenure will fall to ₹30.89 lakh. The borrower will end up saving ₹2.54 lakh or would be able to reduce the tenure by around 10 months.
However, there are some costs attached when you transfer your home loan balance. Among the major charges, there’s stamp duty and processing fee. Some lenders also charge documentation, legal, valuation and technical fee. Stamp duty charges vary from one state to another. For instance, in Mumbai, it’s 0.25% of the loan amount and in Delhi, it’s a flat Rs100.
Take all such costs into account before calculating your savings, net of charges. For a ₹50 lakh loan, it can be as high as ₹24,100. Some lenders may also force you to take life and home insurance, increasing your cost further.
“Charges involved in closing an existing loan and moving to a new one can have an impact on your savings. Even if the rate of interest is slightly lower than your existing loan, you might end up paying more if the valuation fee, processing fee, and other charges are sizeable on the new loan," said experts.
Besides costs, there are other things that a borrower needs to consider before taking a call on shifting. If you have an ongoing loan from a bank, check whether rates are linked to an external benchmark or to the marginal cost of funds-based lending rate (MCLR).
If the loan is on MCLR, you could get a lower rate when you shift to rates that are linked to an external benchmark. From 1 October last year, the Reserve Bank of India has asked banks to link all their new floating rate retail loans to an external benchmark. It helps borrowers to understand when their rates will rise and fall, depending on the change in the external benchmark, which is repo rate for most banks.
If you are with a non-banking financial company (NBFC), it would make sense to shift to a bank. The external benchmark is applicable only to banks. The interest rate movement of NBFCs are still not transparent.
Banking industry experts said it makes sense to switch if your existing tenure if over 10 years. This is because in the initial years of the loan, a large part of the equated monthly instalment comprises the interest.
As a rule of thumb, a borrower should look at shifting the home loan if the remaining tenure is above 15 years and he’s getting a loan cheaper by 25 basis points (bps) than what his existing lender is offering. One bps is one-hundredth of a percentage point
For those with a remaining tenure between 10 and 15 years should look at switching only if the interest rate difference is above 50 bps. If an individual has less than 10 years remaining for the loan, then the borrower needs to estimate if there will be any savings on switching.
Switching may look attractive but you need to evaluate the savings before doing so.
While buying a plot there are certain points one should consider. Below points would definitely give an insight into what needs to be looked into before you put that hard earn money to buy a land/plot.
If you are looking to buy a land or plot do get in touch with us we will assist you with end to end services.
Important FAQ’s on Real Estate Regulatory Authority (RERA) Act,2016.
Q.1.What is the tenure or validity of registration under Real Estate Regulatory Authority (RERA) ?
Ans: Registration shall be valid for the period required to complete the project or phase as declared by the builder/developer.
Q.2. What happens if the builder/ developer fails to deliver during the validity period?
Ans: The validity of registration is based on builder’s own estimates. Thus, accountability lies with them to adhere to the timelines otherwise they risk suffering losses or liable to pay penalties.
Q.3. Can the registration is revoked under RERA?
Ans: Registration under the Real Estate Regulatory Authority (RERA) can be revoked by RERA, if it receives a complaint against the developer and is satisfied that the developer has not complied with the rules under the Act, or has violated the terms and conditions of approval or is involved in unfair practices to sell, market or advertise his projects.
Q.4.If RERA revoking of registration, what effects will it have on the builder/ developer?
Ans: Real Estate Regulatory Authority (RERA) can advise the appropriate Government to employ a competent authority to finish the project. The Association of buyers will have the first right to accept or refuse any further development activities in the project. If RERA revoking of registration will result in the following:-
i). The builder/developer will be listed as a defaulter and will be denied access to site of the project in which he has defaulted,
ii). Real Estate Regulatory Authority (RERA) will then inform Real Estate Regulatory Authority(RERA)’s of other states and Union Territory’s,
iii). It will direct the bank to freeze the bank account of the particular project and consequently unfreeze it for future development work, If accepted /required.
Real Estate Regulatory Authority (RERA) may, instead of revoking registration, permit registration to remain in force subject to such future terms and conditions as it thinks fit to impose , in the interest of allottees and any such terms and conditions so imposed shall be binding upon builder or developer.
Q.5. Are there any restrictions on advertisements or promotions?
Ans: The act mandates that anything shown in the marketing material needs to be in line with the final product or else real estate developer will be liable to penalties under the Act.
Any marketing collaterals are also to be uploaded on the “Real Estate Regulatory Authority (RERA)” site by the builder or developer, post registration. The advertisement or prospectus issued or published by the developer shall mention prominently the website address of the Authority, wherein all details of the registered project have been entered and include the registration number obtained from the Authority and such other matters incidental thereto. In the case of any future dispute the same can be easily referred to or produced as evidence.
Q.6. Can a real estate developer exits the project mid-way by selling to another developer or party?
Ans: While a developer is allowed to sell the project to another investor he can do so only by taking written approval of 2/3rd of project’s consumers and also the prior approval of the Real Estate Regulatory Authority (RERA). Again, if a consumer or his family or by other means holds more than one unit in a project he is considered as one consumer only. Also, the Real Estate Regulatory Authority (RERA) needs to be informed of such sale and the developer who is buying then assumes all the rights and liabilities as the previous promoter of the project (including project delivery time lines and other such matters).
Q.7. What are the responsibilities of a consumer as per Real Estate Regulatory Authority (RERA) Act, 2016?
Ans: It is mandatory for a consumer to make timely payments to the real estate developer as per the agreement for sale. He will also have to pay his share of registration charges , municipal taxes, maintenance charges, ground rent, electricity charges, water supply charges and any other services.
As per Real Estate Regulatory Authority (RERA) Act, 2016, Once occupancy certificate is issued by the real estate developer, the consumer is required to take possession within 2 months’ time. If the consumer is not able to make timely payments for his purchase, he is required to pay interest at a prescribed rate. If is compulsory for a consumer to exhibit active participation in the formation of an association, a cooperative society or any federation of consumers. A consumer shall participate towards registration of the conveyance deed of the unit.
Q.8. What is an ESCROW ACCOUNT and why is Real Estate Regulatory Authority (RERA) mandating 70% funds collected be deposited in an escrow account by a real estate developer?
Ans: An ESCROW ACCOUNT is under the purview of a third party essentially a bank or a recognized lender. This provision thereby results in future oversight of the bank account and signing authority is with the ESROW ACCOUNT manage say a trustee or a bank or a lender. One of the challenge issues for consumers has been project delays. Amongst other reasons for delay, the use of collections from one project into business expansion or construction of other project or siphoning of funds by real estate developers have also been primary causes. Thereby to protect consumer of a project the Act mandates that of all collections. Thereby to protect consumer of a project the Act mandates that of all collections 70% funds be deposited in an ESCROW ACCOUNT maintained with a scheduled commercial bank. These funds can be accessed by a real estate developer solely for purpose incurring expenditures towards the said project.
The real estate developer can with drawn funds from this account in proportion to stage of work. The request for withdraw funds from this account in proportion to stage of work. The request for withdrawn of funds from is to be certified by an engineer, architect and chartered accountant in practice that real estate developer’s claims are justified. These costs include the costs of land, construction, finance and other project costs.
Q.9. The Real Estate Regulatory Authority (RERA) Act has mandated real estate developers to specify “CARPET AREA” rather than : SUPER BUILT UP AREA” . How it will be help to consumer?
Ans: Carper area is a measure of net usable area of the unit and does not include common areas, balconies, verandahs etc., whereas, the super built up area could be an addition of both. Therefore, to ensure that the consumer knows what he is paying for, it has been made mandatory for the real estate developer to specify carpet area. Essentially Carpet Area is the area within the external walls of a unit where a consumer can reside or have his office. Even when the balconies, verandahs or terraces are exclusively available within a unit these cannot be added to the Carpet Area prescribed in the Act.
The definition of “CARPET AREA” as per Real Estate Regulatory Authority (RARA) Act,2016 , Carpet area means the net usable floor area of an apartment , excluding the area covered by the external walls, areas under services shaft, exclusive balcony or verandah area and exclusive open terrace area but including the area covered by the internal partition walls of the apartment. Mandating carpet area to be revealed will bring in the standardization across builders that was lacking earlier. It will become easier for the customers to compare projects and rates.
Q.10. Is Real Estate Regulatory Authority (RARA) Act,2016 is applicable in Gram Panchayat?
Ans: With respect to the enforcement of this law proactively, It is possible to have existing local building control authorities like Town Planning Departments in Municipal authorities , development authorities, Gram and Zillah Panchayats or Block Development officers are compile a list of such ongoing projects in their area.
Q.11. Is Real Estate Regulatory Authority (RARA) Act,2016 applicable to open plots?
Ans: The Real Estate Regulatory Authority (RARA) Act,2016 makes it mandatory for all commercial and residential real estate projects where the land over 500 square meters or 8 apartments , to register with the Real Estate Regulatory Authority (RERA) for launching a project in order to provide greater transparency in project marketing and execution.
Q.12. Is Real Estate Regulatory Authority (RARA) Act,2016 is applicable for completed projects?
Ans: As per The Real Estate Regulatory Authority (RARA) Act,2016, Completed projects are exempts from the purview of the RERA Act.
Q.13. Is it safe to buy either plot or apartment or villa approved by The Real Estate Regulatory Authority (RARA) Act,2016?
Ans: At present days if a consumer wants to buy a plot or apartment or villa better to buys from the Real Estate Regulatory Authority (RARA) Act,2016 approved project. If consumer buys plot, apartment or villa from the unregistered developer or builder with RERA, the banks can refuse to release any more installments of the loan amount if the project is not registered with the RERA authority in the respective State.