The Noida Authority has introduced new rules to safeguard homebuyers in Noida. Now, when buying a new apartment, a “tripartite sale agreement” is required. This agreement involves the buyer, the builder, and the Noida Authority, and it must be signed once the buyer pays 10% of the apartment’s cost to the developer.
What’s New?
In the past, buyers would only register their property after the project was complete. Now, the Noida Authority mandates that registration of the sale agreement happen as soon as the buyer makes the initial 10% payment. Previously, buyers and builders made an initial agreement on a basic stamp paper, with the Noida Authority becoming involved only after the builder obtained an occupancy and completion certificate for the project.
How Will This Benefit Buyers?
The tripartite agreement offers added security for buyers. This new rule helps prevent fraudulent sales, as it creates an official record of the transaction at the start of the process. By including the Noida Authority in this agreement, it also brings greater transparency and ensures that property ownership is clear from the outset.
Preventing Fraud and Ensuring Transparency
The agreement helps protect buyers from cases where developers might try to sell the same unit multiple times or cancel agreements without valid reasons, like minor delays in payments. The Noida Authority will now be notified of every sale and resale, preventing unauthorized transactions and ensuring proper tax collection.
Legal Basis of the Rule
This rule aligns with Section 13 of the Real Estate (Regulation and Development) Act (RERA), which limits builders from taking more than 10% of a property’s cost without a formal agreement. Buyers will pay an initial 2% of the stamp duty when the agreement is registered, with the remainder due when the property is handed over and fully registered.
Steps in the Purchase Process
- The builder first acquires rights to the land from the Noida Authority.
- After obtaining approvals and registering the project, sales can begin.
- Once a buyer pays 10% of the total cost, a registered sale agreement is created, along with a 2% stamp duty payment.
- Upon completion of the project and full payment, the builder transfers possession to the buyer through a tripartite deed, formally documenting ownership.
This new requirement also helps the Noida Authority track the entire process, from the start of the agreement to final possession, reducing risks of double bookings and fraud.
Boosting Buyer Confidence and Market Transparency
With early registration, the new rule gives buyers confidence by legally securing their ownership from the beginning. This added transparency can also reduce uncertainties about project completion and possession timelines.
Possible Challenges for Builders
Although these changes enhance transparency, some builders may be concerned about the 2% stamp duty cost. Also, if a buyer decides to resell, the stamp duty might need to be paid again if the new owner is different from the initial one. Additionally, since Noida and Greater Noida Authorities are now involved in the registration process, some delays may occur, especially as draft approvals go through formal channels.
In summary, these new rules prioritize homebuyer safety and market transparency, setting clearer boundaries and stronger protections from the start of a property purchase in Noida.
