Noida Authority changes property registration rule to protect homebuyers

To bolster homebuyer protection, the Noida Authority has introduced a new rule requiring a tripartite “sale agreement” between the builder, buyer and the Authority. This agreement must be registered as soon as the buyer pays 10% of the property cost to the developer, shifting the registration process to an earlier stage in the transaction. The decision, announced by CEO Lokesh M following a board meeting led by Chief Secretary Manoj Kumar Singh, aims to safeguard homebuyers’ interests, increase government stamp duty revenue, and improve project development oversight.

Currently, property sales are initiated by an informal agreement on a Rs 100 stamp paper between the buyer and builder, with the Authority only involved after project completion. The new rule mandates that once the 10% payment is made, a formal builder-buyer agreement must be registered with Noida Authority. This document will ensure transparency, clarify property details, include total cost and payment terms, and set the possession date, offering legal protection for buyers much earlier in the purchase process.

As per Section 13 of the Real Estate (Regulation and Development) Act (RERA), builders are prohibited from taking more than 10% of the property’s cost without a registered sale agreement. Under the new rule, an initial 2% of the stamp duty will be due at this stage, with the balance payable at possession. After registration, the builder must submit a list of buyers and a copy of the agreement to Noida Authority, creating a tripartite deed that solidifies the buyer’s rights to the property. The revised registration procedure aims to prevent issues like multiple sales of the same unit, unilateral cancellations due to payment delays, or resale without Authority notification. This step also aids in minimising tax evasion by maintaining comprehensive records of property transactions.

What Changes Will Take Effect?

Under the current model, builders secure leasehold rights from Noida Authority and begin sales after project approvals and registration with the Uttar Pradesh RERA. Once a buyer pays 10%, an informal sale agreement is created. Only after the project’s completion, occupancy certificate issuance, and full payment is the title formally transferred through a sub-lease deed among the buyer, builder and Noida Authority. With the new rule, a registered builder-buyer agreement must be presented during the registration of the tripartite sub-lease deed, providing the Authority with real-time tracking of each unit’s sale. This additional layer ensures the protection of buyers by preventing duplicate or fraudulent allocations of already-sold units.