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The Noida Authority now mandates an early tripartite sale agreement between buyers, builders, and itself once buyers pay 10 per cent of a property’s cost, ensuring immediate registration instead of waiting until project completion to protect homebuyers.
Noida Authority introduces new rules to protect homebuyers in Noida.
(Picture Credit: depositphotos)
Noida: In a significant move to protect homebuyers in Noida, the Noida Authority has introduced a new policy mandating an early tripartite sale agreement between buyers, builders, and the Authority once a buyer deposits 10 per cent of the property’s cost. This agreement, required to be registered immediately after the initial deposit, shifts away from the current norm, where registration typically occurs only at project completion.
This policy, announced during a recent board meeting, aims to tackle issues like unauthorised property resales by giving buyers official ownership documentation much earlier in the process. The Noida Authority hopes the change will also promote transparency and reduce tax evasion, as all sales or resales will now require formal registration.
What is poised to change with the new rules?
Under the new guidelines, builders must initiate the registration of the sale agreement as soon as the buyer’s 10 per cent deposit is paid. The agreement will include crucial details, such as property specifications, a payment schedule, and an estimated possession date, adding security for buyers against unauthorised resale or arbitrary contract cancellations due to payment issues.
This initiative aligns with the Real Estate (Regulation and Development) Act (RERA), which limits advance collection to 10 per cent of the property’s value until a formal agreement is in place. Buyers will initially pay 2 per cent of the stamp duty, with the remaining balance due upon final property registration and possession.
A step to boost homebuyers confidence
According to Noida Authority CEO M Lokesh, this policy, targeting group housing, is intended to prevent duplicate sales and streamline property transactions. Similar regulations in Mumbai have proven effective in curbing unregulated financial flows and boosting buyer confidence.
Industry leaders have largely welcomed the measure. Sunil Tyagi of ZEUS Law Associates as quoted by Hindustan Times report highlighted the policy’s dual benefits of bolstering legal protections for both buyers and builders while increasing stamp duty revenues for the state. Sahil Aggarwal of Nimbus Projects Limited praised the emphasis on transparency, while Ravi Nirwal of Square Yards noted it would provide buyers with early reassurance about their investment, as per the same Hindustan Times report.
Unchanged challenges for builders, sellers
However, some challenges remain for builders, especially around the 2 per cent stamp duty requirement. Adhering to this some experts suggest that this upfront payment could complicate secondary sales, as stamp duty may not be fully adjustable in case of resale. Additionally, having the Noida and Greater Noida Authorities directly involved in registration could lead to delays as draft approvals are processed.
Despite potential hurdles, this policy is seen as a step toward reinforcing buyer protections and enhancing transparency in Noida’s real estate market, paving the way for a more secure property ownership process.
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