Thursday, June 28, 2007

Home buyers face smaller penalty (only 1% of the value of a house!) for the late payment

NEW DELHI: House owners, often subject to stiff penalties by realty companies and builders for failing to make payments on time during the construction of a house, may heave a sigh of relief. The government has introduced a clause in the Real Estate Management & Regulation Bill under which penalties have been capped at 1% of the value of a house.

Penalties are charged as interest on the defaulted payment. Industry sources say developers charge interest at rates as high as 8-12% in the absence of any regulation. Almost 30-35% of real estate transactions are construction-linked while the balance is done on the basis of down payments. ...........Home buyers face smaller penalty-Policy -Real Estate-Markets-The Economic Times

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