A New Era of Transparency in Real Estate Transactions

In a major decision that could reshape the real estate landscape of Noida, the Noida Authority Board has mandated tripartite sale agreements between builders, homebuyers, and the Noida Authority for all new housing projects. This agreement will require that the Noida Authority is notified of the buyer’s details at the time of the initial payment, rather than only upon project completion, as was previously the case.

Reducing Fraud, Protecting Homebuyers

The decision, announced by Noida Authority CEO Lokesh M following a board meeting chaired by Chief Secretary Manoj Kumar Singh, is expected to bring greater transparency to real estate transactions, prevent fraud, and safeguard homebuyers’ interests. As per experts, this change will enhance the monitoring of project development, secure buyers’ stakes, and lead to an increase in government stamp duty revenue.

The Mechanism of the Tripartite Sale Agreement

The tripartite sale agreement primarily acts as a pre-registration contract under Section 13 of the Real Estate (Regulation and Development) Act (RERA). According to the law, no promoter is allowed to collect over 10% of the property price as an advance without a written agreement. Under this new mandate, upon a homebuyer paying 10% of the property price, a tripartite agreement between the builder, buyer, and Noida Authority will be executed in the registry office. At this stage, 2% of the stamp duty will be payable immediately, while the remaining stamp duty will be settled upon final registration at the time of possession.

Shielding Buyers from Double Sales and Arbitrary Cancellations

This government-certified tripartite agreement will provide buyers with concrete proof of ownership right from the first payment, with the buyer’s name recorded in the stamp and registry department. This step will help curb malpractices such as builders selling the same unit to multiple buyers or arbitrarily canceling sales in case of delayed payments.

Closing Loopholes in Real Estate Sales

Cases of builders selling the same property to multiple buyers have often come to light in the past, with fraud being discovered only at the possession stage. Additionally, there have been instances where buyers resold properties without paying the necessary stamp duty. However, this will no longer be possible under the new tripartite sale agreement system, which mandates a secure record of ownership for each buyer.