YEIDA Enforces Mandatory Registered Agreements for Property Sales

In a significant move aimed at safeguarding the interests of property buyers, the Yamuna Expressway Industrial Development Authority (YEIDA) has announced that all real estate transactions must now be conducted through registered agreements. This decision, which follows a directive from the Uttar Pradesh Chief Secretary Shri Manoj Kumar Singh, is set to replace the current practice of unregistered agreements that have frequently led to disputes and legal complications for homebuyers. By mandating that all property sales be formalized through registered documents, YEIDA seeks to enhance regulatory oversight in the real estate sector and mitigate the risks associated with fraudulent sales practices.

Current Practices and Issues

As it stands, the prevailing method allows buyers to pay 10 percent of the property’s total cost and sign an unregistered agreement, which outlines details such as specifications, delivery dates, and payment plans. This informal approach has proven problematic, as it permits realtors to sell the same property to multiple buyers, leading to a host of legal challenges and distress among consumers. The CEO of YEIDA, Arun Vir Singh, emphasized that the decision to implement registered agreements is crucial for protecting homebuyers and promoting transparency within the real estate market.

The directive comes in response to numerous complaints from homebuyers who have encountered realtors selling plots, apartments, and other properties to several individuals using unregistered agreements, which ultimately leads to prolonged litigation and distress. The Chief Secretary’s directive also highlighted the revenue losses incurred by the state government due to unregistered sales, prompting this regulatory shift.

New Framework for Property Sales

Under the new framework, both realtors and buyers will be required to pay stamp duty on the property cost at the time of the agreement. This payment will ensure that all transactions are documented and legally recognized. The registered agreements will be filed at the local stamp and registration office, making the process more secure and binding. Additionally, the Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has made it mandatory for buyers and builders to execute property sales through registered agreements, as outlined in the Uttar Pradesh Real Estate Regulatory Act of 2016.

Section 13 of the RERA act specifies that realtors can only accept advance payments from buyers after a registered agreement has been executed. This requirement aims to curb the practice of selling the same property to multiple buyers and ensures that consumers are adequately protected. Sanjay Bhoosreddy, chairman of UP RERA, reiterated the importance of enforcing this directive to protect the interests of property buyers and create a fairer real estate market.

Future Implications and Benefits

While the implementation of this rule is still pending for the Noida and Greater Noida authorities, YEIDA has taken proactive measures to communicate with relevant bodies about the necessity of formalizing property sales through registered agreements. This move is expected to promote accountability among realtors and provide buyers with a greater sense of security when investing in real estate.

Legal experts in the field, such as Ram Mohan, an advocate for property registration, have welcomed this initiative as a much-needed reform. They argue that the existing practices of relying on unregistered agreements have allowed unscrupulous realtors to exploit unsuspecting buyers. By allowing buyers to pay the stamp duty on the initial 10 percent at the time of the agreement, and the remaining 90 percent upon property possession, the new framework aims to simplify the buying process while ensuring compliance with legal standards.

Conclusion

By instituting a more regulated framework for real estate transactions, the authorities hope to enhance transparency, reduce fraudulent practices, and foster a more secure environment for property investment. As the Noida and Greater Noida authorities prepare to follow suit, this initiative could serve as a model for other regions, reinforcing the importance of buyer protection in the ever-evolving real estate landscape. This move not only benefits consumers but also contributes to a more robust and trustworthy real estate market in Uttar Pradesh.