Buying or selling of a real estate property requires you to comply with specific real estate laws. If you are a first-time property buyer or seller, you may find understanding the complex set of laws quite challenging. Hence it is advisable that you seek help from a legal expert who knows the real estate laws and can work in your favour until the transaction is fully completed.
Even if you have a legal expert by your side, it is better you do your homework. When you are buying a property, you may invariably do your research about the different lenders and the current home loan interest rates for getting a home loan. At the same it would help if you made yourself aware of some of the basic real estate rules regarding buying, selling, renting, or transferring the property.
Some of the basic rules that everyone must be aware of are discussed below.
Purchasing the property
If the property you wish to purchase is an under-construction one, you must comply with the rules laid under the Real Estate (Regulation and Development) Act of 2016. If there is any dispute with the developer or the development authority, you can approach the RERA (Real Estate Regulatory Authority) for all under-construction properties.
However, if you want to purchase a ready-to-move-in property, you can approach the district-level consumer dispute redressal tribunals. When you are buying a real estate property, you have certain duties, and if you fail to oblige, you may have to pay a penalty based on the nature of the offence.
According to the act, if a homebuyer fails to comply with RERA orders, then they are liable to pay a penalty for each day of non-compliance, and it may extend up to 5% of the total property’s market value.
Registration of the property
Until the property is duly registered with the concerned government authority, the buyer cannot become the legal owner of the property. The rules relating to property registration are laid out in the Indian Stamps Act, 1899.
Apart from paying one percent of the property’s value as the registration charges, when you buy any property, you must pay a stamp duty. This can range from four to ten percent of the property’s cost and it ranges from state to state.
It is vital to note that if you try to evade paying stamp duty, you may risk paying a penalty up to 10 times of the stamp duty amount you are supposed to pay. Also, depending on the nature of the offence, if you fail to comply with the registration procedure, you may even face imprisonment for up to six months.
Renting a property
Renting is a major housing segment and while the traditional laws continue to exist, a draft model Tenancy Act was launched in 2019. The new act was launched to fill the loopholes in the archaic laws, and structure the functioning of the renting segment.
One of the important laws under the new act is that when a real estate owner rents out a property, even though he remains the owner of the premises, they cannot enter the house without giving a 24-hour notice in writing to the tenant. The landlord must also follow the same rules if they want to carry out any repair or renovation work in the home.
Thus, there are specific laws and rules that guide the different aspects of real estate. Knowing the basic rules will hold you in good stead during any transaction and you can make a more informed decision.