Government of India has enacted the Real Estate (Regulation and Development) Act 2016 and all the sections of the Act shall come into force with effect from May 1, 2017. The key objectives of the Act are:
i).Ensuring Transparency & Efficiency in real estate sector in regards to sale of plot, apartment, building or real estate project;
ii).Protecting the interest of consumers in real estate sector;
iii).Establishing adjudicating mechanism for speedy dispute redressal;
iv). Establishing Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority.
With increasing complaints against the promoters, the Real Estate Regulatory Act notification by the Government of India has led to multiple guidelines which the promoters have to meet so as to legally build a project or sell it.
RERA has brought some milestone changes regarding the laws in real estate sector of India. The wholehearted commitment of the government into maintaining fair play in the property business has come as a big relief for the buyers. Apart from the buyers, the promoters and the real estate agents who go by the government norms, but have to suffer from the spread of bad word against them due to some ill practices by some promoters and real agents, also will feel happy and relieved.
Applicable to both Residential and Commercial real estate projects with effect from 1st May 2017;
2. RERA AUTHORITY
Establishment of Real Estate Regulatory Authority as a regulator of the real estate sector with following powers:
i). Creation of a transparent and robust grievance redressal system;
ii).To receive complaints from aggrieved customers and adjudicate the same with authority to pass Interim orders;
iii). Maintaining database of promoters, projects;
iv).Grading of promoters and real estate projects.
3. RERA APPELLATE TRIBUNAL
Establishing a Real Estate Appellate Tribunal to hear matters arising from orders passed by the RERA Authority.
4. MANDATORY REGISTRATION OF PROMOTERS & REAL ESTATE AGENTS
Mandatory Registration by Promoters of the real estate projects developed by them with the RERA Authority. Revocation of Registration in the event it is found that the promoter has engaged in unfair practice or irregularities like falsely representing the services of particular standard or grade, makes false or misleading representation;
Mandatory Registration by the Real Estate Agents who facilitate the sale and purchase of real estate projects. Revocation of Registration and/or suspension from carrying out their activities in the event of misrepresentation or fraud.
5. COMPULSORY DEPOSIT OF 70%
Promoter is required to compulsorily deposit 70% of the amounts realized for the real estate project from the allottees in a separate account in a scheduled bank within a period of 15 days to cover cost of construction to be used for that purpose.
6. MANDATORY DISCLOSURE
Mandatory disclosure by Promoters for public viewing the following details:
i).Registration granted by the RERA Authority;
ii).Quarterly up to date list of number and types of apartments, plots booked;
iii).Quarterly up to date list of number of garages booked;
iv).Quarterly up to date status of the Project;
v).Sanctioned plans, layout plans;
vi).Status of land, approvals obtained ;
vii).Names and addresses of real estate agents, contractors, architect, structural engineer, etc.
7. FUNCTIONS & DUTIES OF PROMOTERS
i).Disclosure of all relevant information of the project;
ii).Adherence to approved plans and project sanctions;
iii).Rectify structural defects;
iv).Refund money in cases of default;
v).Not to make any additions and alterations in the sanctioned plan without the prior consent of the allottee.
8. PUNITIVE PROVISIONS
Promoters cam be held liable to penalty amounting to 10% or 5% (depending on the nature of violation of the Act) of the estimated cost of the real estate project and/or imprisonment.
9. OTHER NOTABLE FEATURES
i).Obligation regarding veracity of advertisement or prospectus;
ii).No deposit or advance to be taken by promoter without first entering into agreement for sale;
iii).Responsible to obtain the completion certificate or the occupancy certificate;
iv).Provide and maintain essential services at reasonable charges till formation of the association of the allottees.
10. EXEMPTIONS FROM REGISTRATION
Registration under RERA is not required under the following circumstances:
i).Development of land of less than 500 sq.mtrs.; or
ii).Number of apartments does not exceed 8 in all the phases;
iii).Completion certificate is received prior to commencement of the Act i.e. 1st May 2017;
iv).Renovation or Repair or Redevelopment which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building under the Real Estate Project.
The implementation of RERA has been reposed on the State Governments to draft rules and regulations to implement RERA . Several states like Maharashtra, Rajasthan have implemented the RERA (with or without modifications) while other states like West Bengal, Odisha, Karnataka are yet to implement the said Act.
– Arkodeb Sinha