“How to prevent builders from charging extra fees under RERA in West Bengal?” is a frequently asked question by the flat or apartment buyers in West Bengal.

Prevent Builders from Charging Extra Fees under RERA in West Bengal

Buying a property in West Bengal entails not only considering the base price but also navigating through various hidden costs and legal intricacies. Despite regulatory frameworks like the Real Estate Regulatory Authority (RERA) aimed at safeguarding buyer interests, buyers often find themselves grappling with unexpected charges and contractual complexities. This article aims to shed light on both hidden costs and legal safeguards to empower buyers in making informed decisions. This article will allow you to prevent builders/developers/promoters from charging extra fees under RERA in West Bengal. However, it is further recommended to consult an experienced property lawyer in West Bengal before you proceed with purchasing any apartment or flat in West Bengal.

RERA Guidelines: A Beacon of Transparency

Real Estate Regulatory Authority (RERA) stands as a beacon of transparency in the real estate sector, aiming to streamline property transactions and protect the rights of both investors and builders. According to RERA regulations, the price quoted by builders should encompass all costs related to the property, including external development charges (EDC) and internal development charges (IDC). However, some builders attempt to circumvent these regulations, incorporating these charges indirectly into the property price. To prevent builders from charging extra fees under RERA in West Bengal, it is important to first understand the charges that you are legitimately liable to pay. The following charges are defined under RERA and you are liable to pay the same.

Understanding RERA Charges that Buyers are Liable to Pay

• External Development Charges (EDC): These charges pertain to the development of infrastructure outside the project area, such as roads, drainage systems, and parks.

• Internal Development Charges (IDC): IDC covers the costs incurred for developing infrastructure within the project area, including amenities like water supply, electricity, and landscaping.

Understanding Other Statutory Costs that Buyers are Liable to Pay

• Goods and Services Tax (GST): It may not be included in the pricing initially, leading to unexpected demands post-payment. Understanding these charges upfront is crucial to avoiding surprises.

• Late Payment Penalty Clause: Builders may exploit delays in home loan sanctions by increasing prices or threatening to sell properties to other buyers. Implementing a late payment penalty clause in the builder-buyer agreement can protect buyers from such situations.

Additional Costs Incurred During Property Purchase

Beyond RERA-regulated charges, buyers must be aware of other expenses associated with property purchases:

1. Stamp Duty and Registration Fee: Compulsory fees payable to the state government, varying from 5-7% for stamp duty and 1-2% for registration. These charges can significantly inflate the overall cost of the property.
2. Brokerage Fee: While not a hidden cost, brokerage fees can add up, impacting the total expenditure on the property. Charged by brokers, typically ranging from 1-2% of the total house cost. Buyers should settle details with their brokers beforehand to avoid surprises.
3. Interiors and Parking Space: Often overlooked but substantial expenses that buyers should budget for. Costs for interiors, parking space, and other amenities can add significantly to the total expenditure.
4. Goods & Services Tax (GST) and Preferential Locality Charge (PLC): GST on under-construction properties and PLC for premium locations are additional expenses that buyers should factor into their budget.

Now that you understand the costs and charges that you have to bear while buying apartments or flats in Kolkata and West Bengal, it is important to learn how to prevent builders from charging extra fees under RERA in West Bengal.

Unveiling Hidden Costs and Extra Fees Charged by Developers

1. Maintenance Deposits: Builders often demand maintenance deposits for future years upfront, ranging from 2 to 10 years. While seemingly innocuous, these deposits significantly inflate the initial investment, allowing builders to accrue additional funds upfront. However, it is often difficult to negotiate such maintenance fees and you may have to end up paying such fees.
2. Parking and Club Memberships: Additional charges for parking and club memberships are commonplace. Builders may charge exorbitant fees, flouting RERA guidelines that prohibit charging for such amenities separately.
3. Extra Charges for Electricity: Builders frequently neglect to include the cost of electricity for common areas in the property price, passing these expenses onto residents or buyers without prior disclosure.
4. GST and Other Statutory Charges: Taxes such as GST may not be included in the pricing initially, leading to unexpected demands post-payment. Understanding these charges upfront is crucial to avoiding surprises.
5. Late Payment Penalty Clause: Builders may exploit delays in home loan sanctions by increasing prices or threatening to sell properties to other buyers. Implementing a late payment penalty clause in the builder-buyer agreement can protect buyers from such situations.

RERA Regulations: Buyer Safeguards

• Outgoings Responsibility: Section 11 (4) (f): According to Section 11 (4) (f) of the Real Estate Regulatory Authority (RERA) Act, promoters/ developers must pay all outgoings, including land cost, taxes, maintenance charges, and mortgage-related expenses, until transferring physical possession of the real estate project to the allottee or associations of allottees. Failure to fulfil these obligations renders the promoter/ developer liable even after property transfer, subject to penalties and legal proceedings.

• Rectification of Defects: Section 14 (3): Under Section 14 (3) of the RERA Act, if any structural or workmanship defects are reported within five years of possession, it’s the duty of the promoter/ developer to rectify them promptly and without additional charges. Failure to do so entitles aggrieved allottees to compensation as stipulated in the Act.

• Insurance Obligations: Section 16: Section 16 of the RERA Act outlines the obligations of the promoter/ developer regarding insurance for the real estate project. Promoters/ developers are required to obtain specified insurances, including title insurance and construction insurance, before transferring the property to allottees. Premiums and charges for these insurances are the responsibility of the promoter/ developer, and upon formation of the allottees’ association, all relevant insurance documents must be handed over to them.

Strategies to Prevent Extra Fees

To shield themselves from these hidden costs and prevent builders from imposing additional fees, buyers can adopt several proactive measures:

1. Thorough Scrutiny of Agreement: Examine agreements meticulously, ensuring all charges are explicitly stated. Seek clarification on ambiguous terms before signing. It is recommended to get all agreements, booking forms and booking agreements vetted by an experienced property lawyer in West Bengal or Kolkata.
2. Negotiation and Transparency: Be prepared to negotiate with builders regarding any additional charges. Stand firm on RERA guidelines and refuse to pay illegal fees.
3. Legal Assistance: Seek legal counsel or experienced property lawyer in West Bengal if faced with resistance from builders. Lawyers specializing in real estate can provide invaluable guidance on how to prevent builders from charging extra fees under RERA in West Bengal.
4. Documentation and Record-Keeping: Maintain records of all charges and agreements, ensuring transparency and accountability throughout the transaction process. If you pay any amount in cash, do ensure that you receive proper money receipts against the same and do not flout any RERA guidelines. It is recommended to consult an experienced property lawyer in West Bengal who has experience dealing in RERA matters.

Get in Touch with a RERA Lawyer in West Bengal

In conclusion, navigating the real estate market in West Bengal requires a comprehensive understanding of RERA guidelines and proactive strategies to prevent extra fees. By staying informed, vigilant, and assertive, buyers can protect their interests and ensure a fair and transparent property transaction. With diligence and foresight, buyers can embark on their homeownership journey with confidence, knowing they have taken the necessary steps to prevent unexpected financial burdens. Most importantly, consult an experienced property lawyer in West Bengal who can help you to prevent builders from charging extra fees under RERA.

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