Real Estate Community Forum

In order to protect property buyers from such fraudulent transactions arising out of ambiguous titles, the preliminary draft of Real Estate Management (Regulation and Control) Act makes it mandatory for the promoter to clearly mention the title of the land, besides its area, location and price, in the prospectus or the ad for sale of property. Further the draft National Housing and Habitat Policy 2005 calls for mandatory title insurance for housing deals. The real estate experts believe that the proposed title insurance on the lines of the ones in practice abroad, will provide cover to the buyer against any loss due to defective titles of the property purchased.

Since the agreement of sale by Builders for Sale is a key document in any property transaction, the proposed law binds the promoter in term of the contents of the agreement as well as registration of agreement of sale. As per the initial draft, promoter who intends to offer for sale plots, buildings or apartments on ownership basis, shall before he accepts any sum of money as advance payment or deposit, enter into a written agreement for sale with each person who is to take and has taken such plot, building or apartment, as the case may be. The agreement shall be in prescribed form together with prescribed documents. Under the law, agreement of sale has to be registered under Registration Act 16 of 1908 at the proper registration office and execution admitted by the person executing the document or by his representative, assignee or agent.

All agreements entered into before the commencement of the Act will also be registered and its execution admitted within six months of its commencement and it will be deemed to have been executed within time.