To make real estate developers accountable for uncompleted and delayed projects, home loan providers have been insisting on construction-linked disbursal of funds, according to news released by Economic Times. Last year, several home loan providers and buyers experienced difficulty when several developers either stopped construction midway or slowed down the construction due to shortage of funds in 2008 and 2009.
Several buyers were stuck in a difficult situation as they were expected to pay monthly installments towards the loan without receiving the possession of their house. Experts opine that releasing funds based on proportion of completed construction will be good for the real estate industry . Besides making developers accountable, it will also benefit buyers as it will reduce the installment amount during development stages.
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