What is Real Estate Regulation Act (RERA)?
The Real Estate Regulation Act 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act establishes Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute redressal. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. The Act came into force on 1 May 2016 with 59 of 92 sections notified. Remaining provisions came into force on 1 May 2017.
How Real Estate Regulatory Authority help Home Buyers?
With the Real Estate regulation and Development Act, Govt hopes to bring transparency and fair practices to realty sector. Here is the information on how it will change things for property Buyers.
The Real Estate Regulation Act 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act establishes Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute redressal. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. The Act came into force on 1 May 2016 with 59 of 92 sections notified. Remaining provisions came into force on 1 May 2017.
How Real Estate Regulatory Authority help Home Buyers?
With the Real Estate regulation and Development Act, Govt hopes to bring transparency and fair practices to realty sector. Here is the information on how it will change things for property Buyers.
The RERA law will change home buying experience. The law has made it compulsory for developers of all residential and commercial projects to register their projects with the specially formed RERA(Real Estate Regulatory Authority). Till such time that a particular project is not registered, the Developer cannot advertise, market, book, sell or offer for sale or invite persons to purchase in any manner any plot, apartment or building. Those who fail to register their properties as per the Act(RERA Act) will be liable to a penalty which may extend upto 10% of the estimated cost of the project. The Act states that no continued violation, the developer or promoter of the project shall be punishable with imprisonment for a term, which may extend up to three years, or with a fine which may extend up to a further 10% of the estimated cost of the project, or with both. Apart from Registration, the promoters shall be required to provide quarterly updates on the status of the project to the authority.
It is mandatory for the developer to give out all details of a project such as cost of land, development agreement, cost of construction, sanctioned plans, covered parking lots and open spaces, among others. All this information will be available to buyers online. The developer will also have to make a disclosure about the time frame in which the project will get the completed, and also submit phase wise plans of development. The developer will also have to update the information about the units and covered parking lots sold. While advertising the project, the developer will have to give out details about RERA website on which the details will be uploaded.
The Act ensures that a developer is unable to make any additions and alterations in the sanctioned plans, layout plans and the specifications and the nature of fixtures, fittings and amenities etc. without the previous consent of at least two thirds of the buyers, other than the promoter, who have agreed to take apartments in a building. Under the new law, the developer will not be able to restrict sale on the basis of caste or community. Also a buyer will only pay for carpet area.
Unlike the past, if a project gets delayed then the onus of paying the monthly interest on bank loans taken for under-construction flats will rest on developers. Under RERA, a separate account will be used to deposit 70% of the money collected for the project’s construction, and developers can draw from it only for construction purposes.
In case a buyer finds any structural or workmanship defect within five years from date of being handed over the flat, the promoter will have to rectify it without any further charge. If he fails to do so, the buyer is entitled to receive appropriate compensation under RERA.
The promoter will also have to execute a registered conveyance deed in favor of the buyer within three months from date of issue of occupancy certificate, or when 60% of the total number of purchasers in a building, have paid the full consideration to the promoter, whichever is earlier.
In case a developer fails to deliver on his promise, buyers will have to approach the Authority. The complaints will be heard and disposed of in a time-bound manner. If the buyer is dissatisfied with the orders passed by the Authority, he can approach the Appellate Tribunal, and eventually the High Court.
It is mandatory for the developer to give out all details of a project such as cost of land, development agreement, cost of construction, sanctioned plans, covered parking lots and open spaces, among others. All this information will be available to buyers online. The developer will also have to make a disclosure about the time frame in which the project will get the completed, and also submit phase wise plans of development. The developer will also have to update the information about the units and covered parking lots sold. While advertising the project, the developer will have to give out details about RERA website on which the details will be uploaded.
The Act ensures that a developer is unable to make any additions and alterations in the sanctioned plans, layout plans and the specifications and the nature of fixtures, fittings and amenities etc. without the previous consent of at least two thirds of the buyers, other than the promoter, who have agreed to take apartments in a building. Under the new law, the developer will not be able to restrict sale on the basis of caste or community. Also a buyer will only pay for carpet area.
Unlike the past, if a project gets delayed then the onus of paying the monthly interest on bank loans taken for under-construction flats will rest on developers. Under RERA, a separate account will be used to deposit 70% of the money collected for the project’s construction, and developers can draw from it only for construction purposes.
In case a buyer finds any structural or workmanship defect within five years from date of being handed over the flat, the promoter will have to rectify it without any further charge. If he fails to do so, the buyer is entitled to receive appropriate compensation under RERA.
The promoter will also have to execute a registered conveyance deed in favor of the buyer within three months from date of issue of occupancy certificate, or when 60% of the total number of purchasers in a building, have paid the full consideration to the promoter, whichever is earlier.
How to complain?
In case a developer fails to deliver on his promise, buyers will have to approach the Authority. The complaints will be heard and disposed of in a time-bound manner. If the buyer is dissatisfied with the orders passed by the Authority, he can approach the Appellate Tribunal, and eventually the High Court.
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