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INTRODUCTION

This 'Code of Conduct' is recommendatory in nature. Member Associations, may modify the same in order to meet their local conditions, provided such changes are not out of harmony with the essence of these contents.

OBJECTS

The aim of this code of conduct for Developers, Promoters and Builders is to maintain the honour and dignity of Developers, Promoters and Builders in general, to secure the spirit of friendly co-operation between the Developers, Promoters and Builders and their customers in the promotion of highest standard of promotion, development and building activities and to establish transparency, and fair dealing between the developers, promoters and builders with their customers; and to establish a spirit of brotherhood within the Associations of Developers, Promoters and Builders to try and ensure that Developers, Promoters and Builders discharge their responsibilities to the community in general.

For the aforesaid objectives the member associations of CREDAI desire to adopt the following norms of conduct. (However, specific mention of the following norms of conduct / rules shall not be construed as conferring upon the members and / or the customers and / or the premise purchasers any legal right enabling them to enforce the same in Court of Law of otherwise).

If any member is found to violate the code, action can be taken against him by the Member Association (even to the extent of his membership being discontinued) subject to a detailed enquiry by a select committee whose recommendations if endorsed by the Managing Committee and by the General Body of the respective member association, would lead to a written warning/reprimand or termination of membership of the member.

Any such action proposed to be taken by the managing Committee shall be put in to effect 30 days after communicating the proposed decision to the member in writing by Registered Post Acknowledgement due at his address as per records of the Association. The member can appeal the decision of the Managing Committee to the General Body of the member association whose decision shall be final and binding. This appeal must be lodged within 30 days of the date of communication by the Managing Committee failing which the decision communicated shall be final and binding The member may appeal against this decision to the CREDAI (national) within 30 days of this communication from the member association. The CREDAI (national) will hear this matter within 30 days thereafter and communicate the final decision to the member association as also the individual member.

Once the decision to discontinue the membership is finalized the association will have to inform in writing to all local statutory authorities of this action as also publish a notice in the local newspapers for information to public at large with regard to the discontinuation of the membership of that developer. Additionally all the CREDAI (national) and other member associations will be duly informed of the same and should the member be a member of any other CREDAI association then it is for them to decide on course of action for that membership in light of this termination of membership.

CODE OF CONDUCT

We, the member associations of CREDAI adopt the following code of conduct. Any addition / Deletion can be effected from time to time with the consent of the General Body. Proposals must be circulated 30 days prior to the General Body meeting.

TITLE

There should be a true disclosure of the property under development in the "Title Certificate" from a solicitor / Advocate showing the rights and obligations of the developers along with the Agreement for sale

INSPECTION OF SANCTIONS

All sanction from the sanctioning authorities like approved plans and commencement certificates, N.A. permission, exemption order under U.L.C. Act (if required) etc., should be made available for perusal of the purchaser at the time of signing the agreement.

BOOKING OF PREMISES

The Developer should normally commence booking / Sale of flats / premises only after obtaining sanction of plans and commencement certificate and clearances from the competent authorities. If booking is entered into with purchasers before obtaining all required clearances the purchaser must be made aware of this fact at the time of this booking and if necessary by way of a true disclosure in the agreement and or the title certificate.

AGREEMENT OF SALE

The Developer should enter in to a proper agreement as per the relevant Acts immediately on receipt of Earnest Money or any Deposit from the purchaser of flats / premises.

PAYMENTS

Payment receivable under the Agreement for sale should be scheduled according to the progress of the work and as per the provisions of the relevant Acts or as may be mutually agreed between the purchaser and developer.

ESCALATION

The developer should not enhance the price of the flats / premises once the agreement for sale is executed - on any account whatsoever; except for additional levies, taxes, court orders or in terms of the relevant Acts or under force majeure conditions. However, if there is a specific understanding between the Developer and Purchaser which is spelt out in the agreement, escalation can be charged on mutually agreed formulae or terms.

CONSTRUCTION OF BUILDING

The developer should construct the building only as per the rules / sanctioned plan and regulations of the Authority. Any variations should be within prescribed and permitted and prevailing norms / rules.

QUALITY OF CONSTRUCTION

The Developers must ensure good quality materials and proper workmanship. Specifications as per agreement should be adhered to and statutory specifications of the Local Planning Authority should be complied with. Proper technical supervision on site should be ensured through qualified and experienced technical personnel in addition to usual qualified structural engineers and architects..

DESCRIPTION OF AMENITIES

All amenities and common facilities should be clearly mentioned in the agreement for sale and same should be complied with. The developer should also ensure transfer of common amenities to the association by a proper deed as may be appropriate.

INFRASTRUCTURAL REQUIREMENTS

All conditions with regard to infrastructure as set out in the approval of the layout plan by Municipal Authority or Planning Authority should be fully complied with by the Developer. The building and its premises should be left in a clean and habitable condition.

TREE PLANTATION

Tree plantation should be done near/at sites as per local rules or the CREDAI recommendation of 10 trees per1000 sq.mtrs of plot area, except where it is not possible in congested areas.

LABOUR WELFARE

Members are encouraged, at large sites (more than 4000 sq.mtrs) to have crèches and educational facilities for the children of the labour, be provided along with other possible labour welfare activities, such as periodical medical check-ups, insurance etc.

REFUND OF MONEY

In case the completion of the building is delayed beyond the period stipulated under the agreement for sale with the flat purchaser and with full regard to force majuere conditions mentioned in the agreement, the Developer should return all the moneys received by him from the flat purchaser, along with interest as specified in the agreement. Suitable refund condition or compensation should be clearly mentioned in the agreement.

FORFEITURE

Developer shall incorporate in the agreements, a clause to the effect that in the event of non-payment of installments or other components of agreed sale price, the cancellation and forfeiture of any amount shall be in terms of the agreement which must transparently state addressing issues such as amount of forfeiture, interest charges, liquidated charges,period for repayment etc.

MODE OF CONVEYENCE:A MEMBER

  • Shall clearly indicate in his agreements, the type of conveyance proposed to be effected i.e. whether undivided interest or the unit as a whole or by means of any other scheme and also mention either the extent of divided or undivided interest in sq./ Sq.Mtr or the percentage of undivided interest and in any case shall take care to ensure that aggregate of divided of undivided interest in land allotted to all the units of a project shall not be in excess of the extent of land.
  • Shall allot specific interest and / or entitlement in land for every car parking space.
  • Shall make available the copies of title documents to the purchasers on request.
  • Shall incorporate a condition in his agreement to the effect that all the covenants other than those specific to a particular unit such as rate, area etc. Shall be common to all the purchasers of a particular project. If the developer intends to reserve some specific rights such as allotment of ground space for garden (in the setback area), terrace, car park (in the setback area) for private use of some units, such intention shall also be mentioned in all the agreements pertaining to the project.

POSSESSION

The developer should ensure timely completion, physical possession, as committed to buyer. It shall be builder's responsibility to obtain completion / occupation certificate from the local authority.

Developer shall incorporate in his agreements, a clause that the delivery / possession of the flat shall be given to the client against complete settlement of the entire consideration and all other components of sale price / quotation.

DEFECT LIABILITY PERIOD

Developer shall incorporate in his agreements, a clause for defect liability for a minimum period of 12 months or as per prevailing laws (whichever is more) from the date of handing over of possession or intimation to their clients regarding the readiness to hand over possession, whichever is earlier and which shall be limited to the defects in the construction(I.e. structure) and not on the bought out materials most of which are covered under varied warranty periods by the manufacturers themselves. However, in the event of recurring problem with the bought out materials, the member shall co-operate with the purchaser in sorting out the issue. This defect liability shall not cover force majeure situations such as damage resulting from war, flood, earthquakes etc.

FORMATION OF A SOCIETY OR A BODY CORPORATE

The developer should take steps for registration of co-operative Hosing Society or any other body corporate as may be decided upon by the developer in the interest of the flat purchasers.

SOCIETY ACCOUNT / OTHER DEPOSITS SUCH AS STAMP DUTIES

The developer shall maintain separate account in respect of any sums received by him from the flat purchases as Advance or Deposit, sums received on account of the capital for promotion of a co-operative Housing Society / Apartment Association or a company or towards the out goings, legal charges, etc, and shall utilize the said amounts only for the purpose for which they have been received. Such accounts should be given to the Society / Association / company not later than 3 months from handing over the charge of the building to such Society / Association / Company and / or within a period of 3 months from the date of final conveyance, whichever is later.

TRANSFER CHARGES

If a transfer charge is to be charged it must be spelt out in the agreements and should not exceed more than 2% of the purchase price for transferring the rights of the flat purchaser under an agreement for sale. Any such consent by the developer to the flat purchaser for transferring his rights under agreement of sale should not be unreasonably withheld, provided the flat purchaser pays, and / or is ready and willing to pay full amount of consideration under the agreement for sale together with transfer fees as aforesaid and other dues payable.

TRANSFER OF TITLE

The developer should not inordinately delay the execution of the conveyance or any other similar instrument in favour of the common organization of the flat holder, after the development and sale of entire scheme and after all amounts payable by the purchasers are paid to the developer.

DISCLOSURE

  • A member may disclose in his brochures / hand-outs/ advertisements or any other publicity material that he belongs to an association which is a member of CREDAI.
  • May incorporate a clause in his brochures and or agreements that the same is subject to arbitration by the designated committee of Arbitrators appointed by the member Association of CREDAI.

HANDING OVER OF ORIGINAL OR CERTIFIED COPIES OF TITLE DEEDS, SERVICE DRAWINGS, ETC

The developer should at the time of transfer hand over to the society / apartment / association / company all original title deeds or certified copies as maybe available and related documents as well as certified copies of sanctioned plan of the buildings including all external service drawings and structural drawings.

INSPECTION BY THE CLIENT

The developers shall incorporate necessary clause in the agreement in order to enable the client deriving the rights to inspect the premises during the course of construction.

CONSUMER REDRESSAL FORUM

Every CREDAI member association will undertake steps to form a consumer redressal forum to address the grievances of consumers against the developer members:

  • Complaints should be considered / entertained by the member association only if the builder is a member of the concerned association and will be restricted to customer builder disputes alone.
  • The modalities for such intervention or mediation or arbitration shall be worked out independently by the member associations.
  • The consumer redressal forum will not adjudicate on any issue in which is subjudice with any court or consumer forums.
  • The member association in all the agreements with the Purchaser may insert a clause that in the event of there being any dispute with regard to the Agreement/s, which is not resolved by negotiation with the Purchaser, the same may be referred for mediation by member association. If the parties (member association & the purchaser) are unable to arrive at an amicable settlement in the mediation, the aggrieved party may approach court of law or have the matter referred for arbitration as agreed by them under the Agreement.
  • The member association shall form a Mediation committee/consumer redressal forum of three members who shall deal with the matters referred to the member association. The procedure for mediation and other modalities shall be worked out independently by member associations.