Escrow Account to safeguard Home Buyers in UP
Owning a home would be dream or ultimate goal for many middle class people across the developing country like India. In current scenario, building or constructing a new home by own is nearly impossible for many as they are can’t afford with time factor as they are supposed to stick with the routine schedule. So hiring builders or constructions workers on contract basis is in practice also there are many people from urban areas where they are supposed to stick with the flat system due to inability of enough space. In such case approaching a real estate contractors or apartment builders would be the best option for them.
Owing a house by a Urban People
In most of the cities of India buying houses in flat system is getting popular and it’s became a kind of hot trend especially after the growth of the Information Technology field. Since, people are tends to find nearby places of their work area, apartments would be the best option they would get. At the same time, constructing an apartment is not an easy thing to do; the builders need to get enough funds from the buyers (people who are likely to buy flats from the constructing apartments).
Problems faced by buyers with the builders
In many cases, the construction works would be delayed by the builders by showcasing the reason of not getting enough buyers for the flats and because of the no sufficient funds to raise the building however, the buyers who already paid for their flats are supposed to wait until buyers get funds by selling all the apartments. It’s the quite common fact prevails in majority of the cities of India.
However, the above mentioned problem might be rectified in the Uttar Pradesh state. The state government of Uttar Pradesh has introduced the new policy for the builders and buyers in the real estate field.
Innovative Move by Uttar Pradesh state Government
The state Government of Uttar Pradesh has came up with innovative ideas which give relief to the buyers. Though, the scheme has been under testing in certain cities like Noida and Ghaziabad after witnessing and rectifying the practical difficulties the scheme will be established further.
As per the new scheme proposed by the state government of Uttar Pradesh, the building authorities are about to open an escrow account by which the funds will be transacted in between the buyers and builders. If they buyers fails to fulfill their promise on their schedule buyers are able to get their money refunded through the escrow accounts.
The Uttar Pradesh state is the first one to introduce such new scheme which will protect buyers in case of any mishandle done by the buyers. In order to make the scheme a successful one, the Uttar Pradesh state government has involved few agencies for monitoring those escrow accounts so that the buyers can feel safe on their investments on home constructions. The agencies will make the frequent check at the constructing areas in order to ensure the construction works are going in right path, after conforming those factors they would release the next payment for the developer for continuing their building construction.
What is escrow Account?
The term Escrow is generally referred as the third party agencies/agency that holds the authority of transacting the money in between the parties (buyers and sellers). The concept has been wide used in the United States of America when compared with all other countries. Though, in US these kinds of mainly under used for mortgage purposes, but here in the state of Uttar Pradesh the escrow accounts is about to use in real estate field.
Key points of New scheme introduced by the UP state Government
- This new scheme introduced by the UP state government will boost home buyers in the state in get involved in the home buying activities without must worrying about their investments.
- The involvement of third party agency like Yamuna Expressway Development Authority, Noida Authority, and Greater Noida Authority who are considered as the big constructors in the state would ensure the scheme transparency.
- Also the agencies who are all involved by the state government of Uttar Pradesh holds the power of refunding the buyers amount to respective buyers or to use the buyers future payment amount for the construction works.
- In addition to those terms, the new policy of UP state government also quotes that if the existing amount was not sufficient to perform the full refunds to the buyers then buyers and the builders can get into the settlement on their own.
- With the implementation of this scheme, if the construction works stopped after initial work then in that case it can well be predicted that the building developers had about only 10% to 20% of amount of the flats entire cost from the buyers who purchased the flats.
Reaction of the buyers over the new policy of UP government
To be frank, near about 99% of the buyers welcome the move taken by the state government of Uttar Pradesh since, it safeguards the investments of buyers done with the property developers. The state’s big developers from the cities Noida and greater Noida to welcome the move taken by the UP state government as it would regularize the building constructions and it will ensure the investment made by the buyers not wasted or delayed.
Also the implement of this innovative policy in constructions would ensure the buyers receiving the property in time. Also the developers would concentrates on finishing their work within the deadline in order to maintain their reputation factor among the public.
As the entire nation facing some hard situation in the real estate field due to the current implementation of currency demonetization by the central government, the introduction of such safety measures for the homebuyers by the state government of Uttar Pradesh would surely encourage the buyers to invest more in the real estate field particularly in home constructions.