The construction contract is registered according to the legal provisions with a stamp and a registration fee of 2 percent on the value of the contract it had. With 4 per cent registration fees and 7 per cent stamp duty, Tamil Nadu has one of the highest registration and stamp fees among Indian states. It is important to register the construction contract at the same time as the sale agreement of the undivided share of the state. The registration of new housing contracts, which has been mandatory since October, is accelerating. To date, more than 400 agreements have been registered, bringing revenues of EUR 1 billion to the government. With clear guidelines and rigorous procedures, officials expect this number to increase in the coming days. Previously, it was not mandatory to register the construction contract when a new apartment was purchased. Buyers recorded only the undivided share of land (UDS) and paid a royalty of 8% of the consideration mentioned in the agreement. Now you have to ask yourself what the risk is in such an arrangement.
The reason is that the value of the sales contract is usually equal to 1/2 or 2/3 of the total value of the consideration. A bank can pay the amount corresponding to the registration value after adjusting the seller`s contribution by 20%. A contractor receives almost 2/3 in the initial phase. A project may be delayed in such cases. Another possibility is a lack of title. In other words, if something goes wrong, then the buyer will be in big trouble. Therefore, if you want to register under the property of the construction, you are very careful. On May 11, the Inspector General of Registration adopted a decision stating that “when a document is submitted only for the registration of a (first) sale of an undivided title, the filers are advised not to require the registration of the building in the subject of the sale document or to insist simply because the certificate of completion was issued by the competent authority of the project.” Suresh Krishn, president-elect of the Confederation of Real Estate Developers` Association of India (Credai), told Moneycontrol that this was just a clarification. Tamil Nadu follows a dual convention system, since both land and buildings are registered separately from the concession agreement. (d) Once the home loan is approved, you can register on the value of the sale contract under the construction property.
The move follows in the wake of a few under-registration points that require the registration of the built-up area with the country`s UDS, which causes great distress, psychological torment, in addition to the fact that the Allottees entail huge and unnecessary costs for the registration of built land that is not authorized by law. Gross NPA of a bank is now the biggest concern of every bank. A bank`s performance is judged by NPas in difficult times. A bank faces maximum defaults while borrowing loans for real estate under construction. The reason is that the uncertainty is high in relation to the resale of real estate. A buyer buys with certain assumptions such as the completion period, increased revenues, clear securities, etc.