Ensuring safe and secure real estate transactions
The MCHI assurance and code of conduct have provided a double dose of confidence to home seekers
Maharashtra Chamber of Housing Industry (MCHI) has taken two major steps, which have given double confidence to home seekers. The MCHI 'assurance' along with the recently adopted code of conduct, has ensured that people can buy flats without any concerns or tensions.
The impact of both these initiatives was visible at the MCHI Property 2011 exhibition, the 19th edition of the real estate and housing finance expo held at the MMRDA Grounds, Bandra Kurla Complex from October 6 to 9, 2011. In fact, at the exhibition's inauguration, Minister of State for Housing, Maharashtra, Sachin Ahir made a special mention of MCHI adopting a self regulatory code of conduct for developers, and he also had praised MCHI's initiatives as regards taking adequate care to ensure that properties on display at the exhibition had necessary clearances.
Referring to these unique buyer- friendly initiatives, Paras Gundecha, president, MCHI, said, that MCHI had recently endorsed a 'code of conduct' for its member developers to scrupulously adhere to ethical business practices. "MCHI has also set up a consumer Grievance Redressal Forum to attend to buyers' complaints. MCHI over the years has emerged as a strong bond between homebuyers and the developers. The organization has extended its reach across all the regions of Mumbai City, Suburbs and across the Mumbai Metropolitan Region (MMR) in the recent past, reaching out to all stakeholders.
Boman Irani, Hon. Secretary, MCHI said, "The MCHI Assurance is what made all the difference between any other real estate exhibition and MCHI's Property 2011. With our commitment being "MCHI Hai Toh Bharosa Hai", the properties on display carried the MCHI stamp of assurance The MCHI Assurance brought in the 'safe and secure' aspect for a home buyer. Very simply, it meant that MCHI had worked with all the participants to make sure that projects exhibited for sale were in adherence with the MCHI Assurance. In other words, these projects had a Commencement Certificate (CC) and/or Intimation of Dis-Approvals (IOD). Also, these projects had to fulfil the requirement of sanctions towards home loans from any leading HFI or nationalized bank. Any project without the above was clearly labelled as an "upcoming project" at the exhibition."
"MCHI being an 'official' organization of real estate developers, recognized by the government of India and Maharashtra, meant the exhibition translated into added security, satisfaction and peace of mind for home seekers," he added.
Bandish Ajmera, Chairman, MCHI Exhibitions Committee said " The MCHI Assurance is very simple: it puts buyers' interests first. "All the participating Developers have to sign the MCHI assurance letter, which will have undertaking signed by the MD of the participating company. It means very simply that projects displayed at the exhibition have IOD and CC, and the participating developer will abide by the MCHI code of conduct. MCHI Property 2011 was planned and organized so as to enhance the comfort and convenience of the home buyers. Various new initiatives were undertaken to ensure that every visitor thoroughly enjoyed the experience of buying a home, while making a most informed choice," he said.
"MCHI property exhibitions have proven to be a perfect place to find a dream home and the 'Bharosa' factor is getting stronger by the year," said MCHI Exhibition Committee co-chairwoman Manju Yagnik.
MCHI CODE OF CONDUCT COVERS THE FOLLOWING ASPECTS:
1 TITLE
The title of the property under development shall have a true disclosure in the "Title Certificate" from a Solicitor / Advocate showing the rights and obligations of the Developer along with the Agreement of Sale.
2 INSPECTION OF SANCTIONS
All sanctions from the sanctioning authorities like approved plans and commencement certificate, N. A. permission, exemption order under U.L.C. Act (if required) etc., shall be made available for perusal of the purchaser at the time of signing the Agreement of Sale.
3 BOOKING OF PREMISES
The Developer shall at the time of booking / sale of flats / premises shall disclose all the requirements as required under MOFA.
4 AGREEMENT OF SALE
We hereby resolve under Code of Conduct to govern and bound by the conduct as set out below.
4(a) To be transparent (and to be recognized for being so) in all our dealings and documentation with our customers, and in this regard we commit ourselves to do the same mandatorily:
4(a)(i) Disclose and declare all the components of the sale consideration; and in the event that any one of the components is to be based on actuals to be determined at a future date, then it would be so disclosed and the current value of such component declared.
4(a)(ii) Disclose and declare whether or not escalation, in any of the components constituting the sale consideration is envisaged and if so, the basis on which such escalation is to be computed and the time frame within which the same would be applicable.
4(a)(iii) Disclose and declare whether any rights, residual or otherwise, are being retained in the property being developed and if so, the nature of such rights.
4(a)(iv) Disclose and declare the nature of the product warranty if any, and the period for which such warranty will be valid, and whether such warranty is being passed on/assigned on good from suppliers through us to our customers.
4(a)(v) Disclose and declare the manner, timing and conditions under which delivery of each developed area and the project as whole would happen, and also the circumstances under which we may withhold delivery to our customers.
4(a)(vi) Disclose and provide a clear narrative of how the title of the property being developed has been delivered.
4(a)(vii)Disclose and declare whether any part of the common areas such as open car parking, garden or terrace areas etc. are specifically excluded from common enjoyment and in such an event mandatorily mention such exclusion in the agreements with all our customers, in the development.
4(a)(viii) Disclose and declare the schedule of payments by our customers, relating them to specific events like time and progressive construction. Disclose and declare the delays if any during the project for reasons beyond the Developer's control on a periodic basis and intimate the delay in possession if any well in advance.
4(a)(ix) Disclose and declare the circumstances under which interest on delayed payments is collectable from our customers, rate at which interest would be charged and method of collection of such interest.
4(a)(x) Disclose and declare the circumstances under which liquidated damages is payable to our customers, the basis of its computation, and the method of such payment.
4(a)(xi) Disclose and declare the Govt. Duties and taxes that are applicable to the transaction as applicable at the time of tansaction or thereafter to provide maximum clarity and transparency.
4(b) To mandatorily standardize and practices employed us with regard to
4(b)(i) Carpet Area
The Developer shall disclose the Carpet Area of the premises in accordance with provision of MOFA.
Any area that is specific to the flat/ premises exclusively to be enjoyed by the premise owner will also be disclosed and whether chargeable separately.
4(b)(ii) Guarantee as to non-violation
Our customers would be assured that the Building Laws would be complied with and would be guaranteed of assured protection from any possible adverse consequences of violation.
The Guarantee may be in the from of:
A. Completion Certificate and /or Occupation Certificate
B. Indemnity to keep our customers harmless of the consequences of any violation solely arising from any acts of commission or omission done attributable to us.
4(b)(iii) Conveyance of undivided shares:
We would arrange for conveyance of lands to the common organization of flats/premises purchases within the period prescribed under the law.
4(b)(iv) Time frame for delivery:
The time frame within which delivery could take place would be reckoned from the date of plan sanction/building permit, unless our customers and ourselves mutually agree upon an alternative.
4(b)(v) Conformity to zoning and non-violation of FSI
We would declare that we would maintain zoning conformity and FSI eligibility without any deviation, as per Laws in force. However, we may prior to making a particular project available to our customers for sale, obtain conversion of the zone.
4(b)(vi) Prohibition on adding
undisclosed elements to the consideration
We agree that other than changes in the statutory levies, any component of the sales consideration not mentioned in the agreement under any head at the time of entering into the contract with our customers, is not bound to be payable by our customers.
4(b)(vii) REFUND OF MONEY
In case the completion of the building delayed beyond the period stipulated under the agreement for sale with the flat purchaser, the Developer shall return all the moneys, received by him from the flat purchaser, along with interest as specified in the agreement. Suitable refund condition or compensation shall be clearly mentioned in the agreement.
4(b)(viii) FORFEITURE :
The Developer shall incorporate in the agreements, a clause to the effect, that in the event of non-payment of installments or other components of sale price, the forfeiture shall be as per mutually agreed terms of agreement / contract but limited to 20% of the amount of consideration (both towards land and construction) however, subject to a notice before forfeiture with an opportunity to the purchaser to pay before the option of forfeiture is exercised. In addition any interest due shall be recoverable. The refund shall be payable within 7 days after resale of the account of the defaulter or to the extent of 20%, whichever is more.
4(b)(ix) POSSESSION
The Developer shall ensure timely completion, physical possession, as committed to buyer. It shall be builder's responsibility to obtain completion / occupation certificate.
The Developer shall incorporate in his agreements, a clause that the delivery / possession of the flat shall be given to the client against complete settlement of the entire consideration interalia with taxes, deposits and all other components of sale price / quotation.
4(c) ARBITRATION/MEDIATION
That we shall provide for arbitration clause providing for arbitration arising of disputes out of agreement for sale, with prospective purchasers under Indian Arbitration and Conciliation Act, 1966.
We shall also provide mediation by MCHI before arbitration is invoked.
5 LABOUR WELFARE
Members are encouraged, at large sites (more than 4000 sq. mtrs) to have crèches and educational facilities for the children of the labour, along with other possible labour welfare activities, such as periodical medical check-ups, insurance, etc.
6 FORMATION OF A SOCIETY OR A BODY CORPORATE :
The Developer shall take steps for registration of Co-operative Housing Society or any other body corporate as may be necessary as per law.
7 SOCIETY ACCOUNTS / OTHER DEPOSITS SUCH AS STAMP DUTIES :
The Developer shall maintain separate account in respect of sums received by him from the flat from the flat purchasers as Advance or Deposit, sum received on account of the capital for promotion of a Co-operative Housing Society / Apartment Association or a Company or towards the out goings, legal charges, etc. and shall utilize the said amounts only for the purpose for which they have been received. Such accounts shall be given to the Society / Association / Company not later than 3 months from handing over the charge of the building to such Society / Association / Company and / or within a period of 3 months from the date of final conveyance, whichever is later.
The MCHI assurance and code of conduct have provided a double dose of confidence to home seekers
Maharashtra Chamber of Housing Industry (MCHI) has taken two major steps, which have given double confidence to home seekers. The MCHI 'assurance' along with the recently adopted code of conduct, has ensured that people can buy flats without any concerns or tensions.
The impact of both these initiatives was visible at the MCHI Property 2011 exhibition, the 19th edition of the real estate and housing finance expo held at the MMRDA Grounds, Bandra Kurla Complex from October 6 to 9, 2011. In fact, at the exhibition's inauguration, Minister of State for Housing, Maharashtra, Sachin Ahir made a special mention of MCHI adopting a self regulatory code of conduct for developers, and he also had praised MCHI's initiatives as regards taking adequate care to ensure that properties on display at the exhibition had necessary clearances.
Referring to these unique buyer- friendly initiatives, Paras Gundecha, president, MCHI, said, that MCHI had recently endorsed a 'code of conduct' for its member developers to scrupulously adhere to ethical business practices. "MCHI has also set up a consumer Grievance Redressal Forum to attend to buyers' complaints. MCHI over the years has emerged as a strong bond between homebuyers and the developers. The organization has extended its reach across all the regions of Mumbai City, Suburbs and across the Mumbai Metropolitan Region (MMR) in the recent past, reaching out to all stakeholders.
Boman Irani, Hon. Secretary, MCHI said, "The MCHI Assurance is what made all the difference between any other real estate exhibition and MCHI's Property 2011. With our commitment being "MCHI Hai Toh Bharosa Hai", the properties on display carried the MCHI stamp of assurance The MCHI Assurance brought in the 'safe and secure' aspect for a home buyer. Very simply, it meant that MCHI had worked with all the participants to make sure that projects exhibited for sale were in adherence with the MCHI Assurance. In other words, these projects had a Commencement Certificate (CC) and/or Intimation of Dis-Approvals (IOD). Also, these projects had to fulfil the requirement of sanctions towards home loans from any leading HFI or nationalized bank. Any project without the above was clearly labelled as an "upcoming project" at the exhibition."
"MCHI being an 'official' organization of real estate developers, recognized by the government of India and Maharashtra, meant the exhibition translated into added security, satisfaction and peace of mind for home seekers," he added.
Bandish Ajmera, Chairman, MCHI Exhibitions Committee said " The MCHI Assurance is very simple: it puts buyers' interests first. "All the participating Developers have to sign the MCHI assurance letter, which will have undertaking signed by the MD of the participating company. It means very simply that projects displayed at the exhibition have IOD and CC, and the participating developer will abide by the MCHI code of conduct. MCHI Property 2011 was planned and organized so as to enhance the comfort and convenience of the home buyers. Various new initiatives were undertaken to ensure that every visitor thoroughly enjoyed the experience of buying a home, while making a most informed choice," he said.
"MCHI property exhibitions have proven to be a perfect place to find a dream home and the 'Bharosa' factor is getting stronger by the year," said MCHI Exhibition Committee co-chairwoman Manju Yagnik.
MCHI CODE OF CONDUCT COVERS THE FOLLOWING ASPECTS:
1 TITLE
The title of the property under development shall have a true disclosure in the "Title Certificate" from a Solicitor / Advocate showing the rights and obligations of the Developer along with the Agreement of Sale.
2 INSPECTION OF SANCTIONS
All sanctions from the sanctioning authorities like approved plans and commencement certificate, N. A. permission, exemption order under U.L.C. Act (if required) etc., shall be made available for perusal of the purchaser at the time of signing the Agreement of Sale.
3 BOOKING OF PREMISES
The Developer shall at the time of booking / sale of flats / premises shall disclose all the requirements as required under MOFA.
4 AGREEMENT OF SALE
We hereby resolve under Code of Conduct to govern and bound by the conduct as set out below.
4(a) To be transparent (and to be recognized for being so) in all our dealings and documentation with our customers, and in this regard we commit ourselves to do the same mandatorily:
4(a)(i) Disclose and declare all the components of the sale consideration; and in the event that any one of the components is to be based on actuals to be determined at a future date, then it would be so disclosed and the current value of such component declared.
4(a)(ii) Disclose and declare whether or not escalation, in any of the components constituting the sale consideration is envisaged and if so, the basis on which such escalation is to be computed and the time frame within which the same would be applicable.
4(a)(iii) Disclose and declare whether any rights, residual or otherwise, are being retained in the property being developed and if so, the nature of such rights.
4(a)(iv) Disclose and declare the nature of the product warranty if any, and the period for which such warranty will be valid, and whether such warranty is being passed on/assigned on good from suppliers through us to our customers.
4(a)(v) Disclose and declare the manner, timing and conditions under which delivery of each developed area and the project as whole would happen, and also the circumstances under which we may withhold delivery to our customers.
4(a)(vi) Disclose and provide a clear narrative of how the title of the property being developed has been delivered.
4(a)(vii)Disclose and declare whether any part of the common areas such as open car parking, garden or terrace areas etc. are specifically excluded from common enjoyment and in such an event mandatorily mention such exclusion in the agreements with all our customers, in the development.
4(a)(viii) Disclose and declare the schedule of payments by our customers, relating them to specific events like time and progressive construction. Disclose and declare the delays if any during the project for reasons beyond the Developer's control on a periodic basis and intimate the delay in possession if any well in advance.
4(a)(ix) Disclose and declare the circumstances under which interest on delayed payments is collectable from our customers, rate at which interest would be charged and method of collection of such interest.
4(a)(x) Disclose and declare the circumstances under which liquidated damages is payable to our customers, the basis of its computation, and the method of such payment.
4(a)(xi) Disclose and declare the Govt. Duties and taxes that are applicable to the transaction as applicable at the time of tansaction or thereafter to provide maximum clarity and transparency.
4(b) To mandatorily standardize and practices employed us with regard to
4(b)(i) Carpet Area
The Developer shall disclose the Carpet Area of the premises in accordance with provision of MOFA.
Any area that is specific to the flat/ premises exclusively to be enjoyed by the premise owner will also be disclosed and whether chargeable separately.
4(b)(ii) Guarantee as to non-violation
Our customers would be assured that the Building Laws would be complied with and would be guaranteed of assured protection from any possible adverse consequences of violation.
The Guarantee may be in the from of:
A. Completion Certificate and /or Occupation Certificate
B. Indemnity to keep our customers harmless of the consequences of any violation solely arising from any acts of commission or omission done attributable to us.
4(b)(iii) Conveyance of undivided shares:
We would arrange for conveyance of lands to the common organization of flats/premises purchases within the period prescribed under the law.
4(b)(iv) Time frame for delivery:
The time frame within which delivery could take place would be reckoned from the date of plan sanction/building permit, unless our customers and ourselves mutually agree upon an alternative.
4(b)(v) Conformity to zoning and non-violation of FSI
We would declare that we would maintain zoning conformity and FSI eligibility without any deviation, as per Laws in force. However, we may prior to making a particular project available to our customers for sale, obtain conversion of the zone.
4(b)(vi) Prohibition on adding
undisclosed elements to the consideration
We agree that other than changes in the statutory levies, any component of the sales consideration not mentioned in the agreement under any head at the time of entering into the contract with our customers, is not bound to be payable by our customers.
4(b)(vii) REFUND OF MONEY
In case the completion of the building delayed beyond the period stipulated under the agreement for sale with the flat purchaser, the Developer shall return all the moneys, received by him from the flat purchaser, along with interest as specified in the agreement. Suitable refund condition or compensation shall be clearly mentioned in the agreement.
4(b)(viii) FORFEITURE :
The Developer shall incorporate in the agreements, a clause to the effect, that in the event of non-payment of installments or other components of sale price, the forfeiture shall be as per mutually agreed terms of agreement / contract but limited to 20% of the amount of consideration (both towards land and construction) however, subject to a notice before forfeiture with an opportunity to the purchaser to pay before the option of forfeiture is exercised. In addition any interest due shall be recoverable. The refund shall be payable within 7 days after resale of the account of the defaulter or to the extent of 20%, whichever is more.
4(b)(ix) POSSESSION
The Developer shall ensure timely completion, physical possession, as committed to buyer. It shall be builder's responsibility to obtain completion / occupation certificate.
The Developer shall incorporate in his agreements, a clause that the delivery / possession of the flat shall be given to the client against complete settlement of the entire consideration interalia with taxes, deposits and all other components of sale price / quotation.
4(c) ARBITRATION/MEDIATION
That we shall provide for arbitration clause providing for arbitration arising of disputes out of agreement for sale, with prospective purchasers under Indian Arbitration and Conciliation Act, 1966.
We shall also provide mediation by MCHI before arbitration is invoked.
5 LABOUR WELFARE
Members are encouraged, at large sites (more than 4000 sq. mtrs) to have crèches and educational facilities for the children of the labour, along with other possible labour welfare activities, such as periodical medical check-ups, insurance, etc.
6 FORMATION OF A SOCIETY OR A BODY CORPORATE :
The Developer shall take steps for registration of Co-operative Housing Society or any other body corporate as may be necessary as per law.
7 SOCIETY ACCOUNTS / OTHER DEPOSITS SUCH AS STAMP DUTIES :
The Developer shall maintain separate account in respect of sums received by him from the flat from the flat purchasers as Advance or Deposit, sum received on account of the capital for promotion of a Co-operative Housing Society / Apartment Association or a Company or towards the out goings, legal charges, etc. and shall utilize the said amounts only for the purpose for which they have been received. Such accounts shall be given to the Society / Association / Company not later than 3 months from handing over the charge of the building to such Society / Association / Company and / or within a period of 3 months from the date of final conveyance, whichever is later.
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