Good news for home buyers: Govt to introduce law to cap penalty on payment default by home buyers
The government is planning to bring in a new law that restricts the maximum amount that a real estate developer or financier can charge a home buyer as penalty in case of delay in payment.Apnaloan.com Research Bureau
10 Aug 2007
The government is planning to bring in a new law that restricts the maximum amount that a real estate developer or financier can charge a home buyer as penalty in case of delay in payment. The proposal is to limit the penalty to 1% of the default amount. This clause will be incorporated in the proposed Real Estate Management & Regulation Bill.
According to reports, developers used to charge 8 to12% as penalty on delayed payments. This is especially valid for under-construction projects, where the home buyers pay back is linked to completion of the project in stages.