Realtors must tell buyers about banks' claim on property: RBI

Prospective home buyers will now know if the land on which their building stands is free of outside claims after a recent Reserve Bank of Realty

India (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 about this legal claim or ‘hold’.

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.

Says Anuj Puri, country head of real estate consultant Jones Lang LaSalle Meghraj, “The RBI circular will bring transparency and accountability on the part of developers. It would also give a chance to buyers to see the viability of projects especially when the loan amount is very high.”

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source:http://economictimes.indiatimes.com