How The Fear Factor Is Causing Real Estate Much Trouble

Among all the things that caused much gloom within India's real estate in the past three years is fear in the hearts of buyers, existing and prospective. A prospective buyer would start his search with a suspicious mind, jittery and paranoid about the looming fears. What if his broker cheats him? What if the builder does not provide the possession on time? What if something goes wrong with the documentation? What if banks refuse to give him a home loan? What if the house that he gets is of poor quality? So many what ifs to answer! In a scenario such as this, you cannot blame this common man if he decided to hold his home-buying decision despite the fact that he desperately wants a home. News on skyrocketing prices would only discourage him further. Let us wait for price correction he would think, and delay the purchase. The adverse impact his individual decision, primarily based on apprehension and fear, would have on the sector is for all to see — volumes have been written about that.

Make no mistake. Those who have been able to buy homes are not a less-worried lot. In fact, they have more to lose in case tragedy strikes --- as long as you do not own an asset, it is alright; you would hardly be able to let go of your possession after you have enjoyed the luxuries offered by it. Hence, they have more reasons to worry. What if they are for some reason unable to pay the EMI (equated monthly installment)? What if there is a money crunch? Who would pay the EMI in case they are not able to? What if they want to change their jobs? What if they lose their jobs? Will the bank make a hostile takeover in case they go bankrupt? What if there is a dispute between the co-owners and the property will have to be divided? Who would be the owner of the property of the spouses decide to go their separate ways? What if it is found that the property was not legally constructed at a later stage? What if they give their property on rent and the tenant cheats them? There are so many questions that keep popping in the heads of homeowners, making them a jittery lot.

The legal remedy

There were legal remedies available to home buyers in India before the Real Estate (Regulation & Development) Act, 2016, came into picture. However, for obvious reasons, individuals would go to courts only if no other option is available to them. After all, who has the time, the energy and the resources to fight long-drawn legal battles? In the absence of a law that was particularly binding on them, developers did, past instances show, take things easy. Not many of them today can boast of sticking with promised delivery dates of their projects, for example. Things are different now. At no stage do they have the option to hide anything from the buyer or baffle him with their mathematical genius in respect of taxes (thanks to the Goods and Services Tax).

Laws such as the GST and the Real Estate Act may be confusing all of us for the time being. There might be debates around their provisions and interpretations. However, when all is settled down and we are over the teething issues, we will surely realise that they have been able to remove the fear from our hearts. In doing so, they would do the economy much good, but, more importantly, they would cure the hearts and minds of India's homebuyers of suspicion and fear.

Also Read: Will GST Empower Homebuyers To Strike A Better Deal?