Builder-buyer agreement to bring uniformity and protect homebuyer’s interest. Consruction Week
Santosh Agarwal, CFO and executive director, Alpha Corp, on how this can be done
The real estate sector has performed exceptionally well by registering record growth across segments. It has displayed phenomenal resistance against the pandemic shocks. And now at a time when buyers and investors are finding realty assets as the most stable and safest form of investments, the honorable Supreme Court’s direction to the Centre for bringing in model builder-buyer agreement in real estate will serve a dual purpose. Firstly, it will give long-pending uniformity in real estate agreements across the country. Secondly and most importantly, it will ensure protection to customers from irregularities, delays, and unfair practices.
This development will escalate the sector’s transformation into a buyer’s market. Today, customer-centricity has become the guiding norm in the housing market and the conditions incorporated in the model agreement, issued to all states and union territories will usher in more transparency, especially in residential real estate. It will not only safeguard the interest of consumers but will also give an edge to trusted developers with a proven track record to get a better market share.
Currently, the making of a builder-buyer agreement is entrusted to states and there have been reports of a lack of uniformity in rules guiding real estate deals in different states. At present, some states have it while others don’t. Now, an agreement directed by the Central Government to states and UTs will bring uniformity to prevent inconsistencies and give more relief and security to homebuyers with clarity and transparency.
Earlier reforms like enactment of RERA have worked a lot in favour of industry by creating equitable and fair transactions in the housing market. It made real estate purchase easier and safer by bringing in better accountability and transparency and standardizing practices across the country with protection of the interests of the stakeholders.
Now, the model builder-buyer agreement will also protect the buyer’s interest by ensuring the timely deliveries of the project. The agreement will simplify the deals and protect the buyer’s interest from the complex clauses of which they are not aware. The application of the builder-buyer agreement which is in line with RERA will also safeguard homebuyers from any kind of mental, physical, or financial injury caused by delayed possessions or unwanted setbacks. The buyers who invest their life savings into real estate projects will be compensated for losses and this will strengthen transparency and confidence in the realty sector.
The real estate sector has recently gained momentum in the buyers’ interest owing to the realization of the importance of owning a home. The increased attention towards wellness, security, and comfort along with secured returns on the investment are making residential spaces the best bet for them. Even the millennials or the fence-sitters are reconsidering their approach and are increasingly investing in the properties for a secured future. The promising results are such that home sales have recorded a 92 percent growth in volume over the last year with 64,010 units being delivered in the third quarter of 2021, as per industry reports. Amid this, the enactment of a model builder-buyer agreement will protect such customers who look towards the sector with high hopes. It will also prevent them from one-sided agreements by providing an equal platform.
Moreover, it will lead to the transformation of the sector into responsible real estate as all stakeholders will have to carry out the responsibilities as mentioned in the agreement. It will also specify the particulars of development of the project including construction timeline, specifications of internal development works, dates of possession and manner of payments, and other particulars. The year 2021 has laid the foundation stone of the real estate sector’s growth and amid this, increased attention from governments and the Supreme Court is welcoming.