Allow property sale only via registered agreement: Yeida

GREATER NOIDA: The Yamuna Expressway industrial development authority (Yeida) has decided to direct realtors to sell property only through a registered agreement unlike the prevailing practice of making a two-party “unregistered agreement” to protect the property consumers’ interests in its area. Soon, the Noida and the Greater Noida authorities will also adopt this practice, said officials on Sunday.

“We have approved a proposal in this regard in our board meeting held on September 27 following the Uttar Pradesh chief secretary’s order about allowing property sale only through registered agreement. The move aims to regulate the real estate market and protect the home-buyers’ rights and interests” said Arun Vir Singh, chief executive officer (CEO), Yeida.

On September 9, Manoj Kumar Singh, chief secretary, Uttar Pradesh (UP) had directed Yeida, Noida, and Greater Noida -- the three industrial bodies -- to take this step because “unregistered agreements” fail to protect the interests of homebuyers, and the realtors keep making two party agreements at its will with multiple buyers, the officials added.

This direction had come after thousands of the home-buyers’ complained that there were many realtors in the practice of selling one plot, apartment or other kinds of property to multiple buyers, thereby leading to long litigation and never-ending distress to a property consumer, said officials.

Also, the UP government allows property sale through “registered agreement” because with unregistered agreements it bears huge revenue loss with each sale, said officials.

As per the prevailing process when a buyer buys a property in a new builder’s project, he pays 10 percent out of the property’s total cost, and signs an unregistered agreement detailing the specifications about the property including delivery date, quality specifications and payment plan etc.

In future, a realtor and property buyer will have to pay stamp duty on the 10 percent property cost at the time of agreement. And the agreement will have to be registered in the Uttar Pradesh stamp and registration’s local office located nearby.

“The Uttar Pradesh real estate regulatory Act-2016 also makes it mandatory for the buyers-builders to execute a property sale only through a registered agreement after the stamp duty is paid to the state government. If this state government order is implemented, the realtors will not be able to sell one property to multiple buyers fraudulently thereby cheating innocent buyers,” the CEO, Yeida, added.

The Section 13 also makes it mandatory for realtors to accept the advance payment from buyers only after entering into the agreement that must be registered and stamp duty must be paid on the amount paid at the time of agreement.

Following the UP chief secretary’s directive the Noida and the Greater Noida authorities in their respective board meetings will approve an agenda and enforce a rule of allowing property sale only registered agreement.

“We have communicated to the Uttar Pradesh government about the need of allowing the property sale only through the registered agreement so that the interests of the property buyers can be protected. Subsequently we have had words with Noida, Greater Noida and the Yeida about this matter. The buyers must pay the 10 percent amount to a realtor in new projects only after the registered agreement to safeguard their interests,” said Sanjay Bhoosreddy, chairman of UP Real estate regulatory authority (RERA).

The UP RERA act in its section 13 made it mandatory to allow sale through registered agreement after there were cases in Noida and Greater Noida that a realtor has sold a property be it apartment, plot or shop to even six people through ₹100 stamp paper agreement that is not registered.

“But this rule has not been implemented as yet on the ground and the realtors continue to exploit the innocent buyers by signing ₹100 stamp paper agreement without registering the same. The good part with the RERA rule is that a buyer can pay 10 percent stamp duty cost and register the agreement. Once he will take possession of the property, he can pay the rest 90 percent of the stamp duty fee at the time of registry,” said Ram Mohan, an advocate and expert in property registration, Noida.