In recent updates, the Supreme Court classified a Builder-Buyer agreement as a crucial case for consumer protection. And respectively have asked the centres to form some uniformity in the agreement. A builder-buyer agreement is a step further towards protecting the buyers’ interests. But what exactly is a builder-buyer agreement?
Builder-Buyer Agreement
A builder-buyer agreement is just a form agreement that is formed between a buyer and a seller when purchasing real estate property. The contract projects some of the key terms and conditions that apply to the builder’s sale of real estate to the buyer. It is a legal document binding all the parties to the transaction and safeguarding their rights and interests. However, it is important to keep in mind that the terms and conditions of a builder-buyer agreement differs as per the cases.
Builder-Buyer Agreement Format
After the RERA Act. The builders must maintain, create and complete the builder-buyer contract by the terms and guidelines established by the home-buyer-specific established law. As per the law’s section 13(2), the builder-buyer agreement must include detailed information.
- Development of the Project
- Construction of Buildings and apartments
- Mode of payment
- Any specifications and internal/external development works
- Refund Policy
- Date of Payment
- Rate of interest involved
- Grace period
- Property particulars with different clauses
- RERA registration
- Grace period involved
How Can Property Buyers Benefit from the Builder-Buyer Agreement?
Property buyers can benefit from a builder-buyer agreement in several ways:
1. Legal protection
The builder-buyer agreement is a legally binding document that protects the buyer’s rights and interests. It helps you to establish clear terms and conditions, preventing any unilateral changes taken by the builders and thereby providing legal remedies in case of any breaches or disputes.
2. Property Specifications and Amenities
The builder-buyer agreement includes detailed property specifications that provide information about the size, layout, quality of construction materials, and basic amenities. This entitles the buyer to receive the property per the agreed-upon standards and avoid discrepancies or deviations.
3. Price and Payment Terms
The agreement specifies the purchase price of the property and the payment schedule, including the down payment, instalments, and the final payment. This provides transparency and clarity on the financial obligations of the buyer and the timeline for expenditures.
4. Timeline for the Possession Date
The builder-buyer agreement includes specific timelines for the project’s completion and the property’s delivery. It also mentions the agreed-upon possession date, which holds the builder accountable for the timely completion and handover of the property.
5. Builder’s Obligations and Responsibilities
The contract covers the builder’s responsibilities, including getting required approvals, abiding by building laws and regulations and supplying essential amenities and infrastructure. It minimises the possibility of delays or subpar building by ensuring that the builder fulfills their obligations as specified.
6. Compensation Granted
In the event of any delays, defects, or breaches by the builder, the agreement typically provides remedies and compensation mechanisms for the buyer. This may include penalty clauses for delays, provisions for rectification of defects, or even cancellation of the agreement with an appropriate refund or alternative options.
Bottom Line
A builder-buyer document is an essential legal document that establishes the sale policies between a property purchaser and an individual or an entity buyer. It protects the rights and interests of both parties involved and serves as a reference point for the transaction. A builder-buyer agreement aids in ensuring an open and equitable relationship between the two parties by considering the obligations, responsibilities, payment conditions, delivery schedules, and dispute resolution procedures. To prevent any future disagreements or problems, it is crucial that both parties carefully read and comprehend the agreement before signing it.