By Dr Sanjay Murari Chaturvedi
In the past, we have seen lots of subvention schemes where the promoters were offering 10:90 or any other combination where you pay only 10% and rest on the possession where the promoter will pay all you pre EMI.
Looks so simple but it is actually taking guarantee from the promoter that if they dont pay to the housing finance company then you will pay. This is what the Tripartite Agreement between you, housing finance company and promoter will say. In short, the promoter will take 100% from you. First 10% from you as down payment and rest 90% from the housing finance company. Now, the housing finance companies have disbursed loan to you and paid the promoter.
What if the promoter does not pay Pre EMI and delays the project. The moment the promoter stops paying Pre EMI, the housing finance company will burge upon you and demand the EMI along with interest and spoil your CIBIL. Most of the corporate HR keep to CIBIL scores periodically to qualify you to be employed by them.
Housing finance companies will recover the 100% from you along with all delay interest, penalties and litigation charges.
Will RERA help? No. Because RERA does not have jurisdiction on housing finance contracts between you and housing finance companies. Promoter shall be subject to delay interest u/s 18 of RERA but the financial burden will pound on you if promoter runs away and is not traceable. Even big reputed promoters have duped home buyers under such subvention schemes.
Subvention schemes are nothing but taking liability of loan and paying to the promoter 100% even when he has not started the project. Best practice is to always go for the housing loan and pay the promoter as per the construction linked payment plans. As it is, subvention schemes will always cost you more than the usual property rates.