An agreement of your flat is a 'sugar teat'...keep on sucking till you get possession, baby!
"Agreement to Sell" & "Agreement to Sale"
We all know that 'booking a flat' is just a fantasy. Popularized by the banks and builders to earn huge profits. Property agreement is presented as if - "the goods" are transferred from the seller to the buyer. As if - a builder hand overs a 2 BHK Flat to a home buyer for a price!
Except the property buyer who has booked a flat, we all know that reality is - the property is not yet ready. In the next 30 months a builder is going to construct it. Obviously, the agreement between a builder and a property buyer is not "Sale Agreement". It is not absolute.
In the simple terms - a property agreement is just a pure and simple contract between a builder and a property buyer. By signing the contract - the property buyer only establishes his claim and a builder agrees. It means that it is "Agreement to Sell." Actual sale - exchange of goods against a full and final payment will take place when the flat is ready.
Till that happens the seller - the builder - remains the owner of the property. Obviously, the builder tries his best to protect himself against all odds he has to face in the long construction period and sets favorable terms in "Agreement to Sell".
Fantasy & Reality:
Developers in Maharashtra, one of the biggest realty markets in India, said since agreements are drafted as in the Maharashtra Ownership of Flats Act, there is very little scope of exploiting buyers.
“Basically, there is a standard agreement described by the Act. Therefore, there cannot be violation which can come under the purview of CCI. It is mandatory to follow the Act,” said Lalit Kumar Jain, national president, Confederation of Real Estate Developers Association of India.
Fact of the matter is, this "Agreement to Sell" is useful only to a builder and a bank. For a builder - agreement is a source of money. For a bank, a agreement is an excuse to fund a builder against the security of a property buyer.
Obviously, banks which lend funds & builders who receive funds, both have no issues about an agreement. Only, a property buyer who makes 2 commitments with this agreement - 1) to fund the builder and 2) to repay to a bank - has some issues. And issue is not about his role. Why don't banks fund builders directly? Why the financial transaction between a bank and a builder happens through a property buyer? Because banks don't trust builders! A property buyer is held as a ransom, offered as a security!!
Point is property agreement is useful only for builders and banks. Obviously, nobody wants to stop the practice of using property as fuel. Nobody says - property buyers, grow up! Give up dummy and enjoy real!!
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