Realtors must tell buyers about bank claim

Home buyers will now know if the land on which their building stands is free of outside claims after a recent RBI circular mandating builders mortgaging the land to raise money to disclose it in all advertisements and brochures. RBI has asked lenders to ensure that all publicity material relating to the sale of real estate make a mention of the bank’s lien on the property so that home buyers are not kept in the dark. RBI aims to prevent prospective buyers from being lulled into the belief that the flats they own are on ‘free-hold’ land through this move. In Mumbai flatowner gets rights over his house through membership of a cooperative housing society. The land is not owned by the society unless it is transferred through a conveyance.

Banks suggest no increase in real estate price

Banks in India are suggesting property developers to stop increasing real estate prices as it could stop the market recovery. Developers have been taking advantage of rise in sale but its side effect could put off the buyers.

S. Sridhar, Chairman and Managing Director of the Central Bank of India described the move as short sighted and that the developers are naïve if they think that by increasing prices, they would stimulate demand. Further he said, “It is difficult to generalise but as a whole there is some more scope for downward adjustment in prices, or in certain places it should plateau. That will stimulate the demand”. He added, “If the real estate players revise the prices upwards, it will stall the recovery process. Demand for housing loans has picked up among the banks but the situation is still fragile”.