Mon, 1 May 2017 : The much awaited Real Estate Regulation and development Act(RERA), that seeks to protect home-buyers like never before comes into effect from today.
The bill was passed by the Parliament in March of 2016 however except for sections 59 and 92 that were notified, the vitals of the Act remained unimplemented.
Now that’s about to change and Indian real estate will turn consumer-centric with regulations on builders undergoing drastic change.
Under the Act, all States and Union Territories have to set up the regulatory authority and rules in line with model rules circulated by the Housing Ministry earlier.
And within three months from today, the developers will have to register both ongoing projects without completion certificate and new projects with such authority. Real estate agents too have to register themselves.
Additionally developers are required to disclose details of the project on the regulator’s website and provide quarterly updates on its progress.
Customer is the King
The builder has to deposit seventy percent of all funds collected from home-buyers into a separate bank account for a specific project. This is to ensure that money paid towards construction is not rolled over for other purposes.
Also in an unprecedented blow to developers if any project were to delay, the monthly interest on bank loans availed by the customer will have to be paid by the builder. The onus of paying such interest for under-construction delays was on consumers up to now.
RERA also states that any structural or workmanship defect brought to the notice of a promoter within five-year period of handing over, has to be rectified by the developer without any charge and within 30 days of notice. Also, if the problem is not fixed, the aggrieved allottee is entitled to receive compensation under the Act.
Another highlight of the Act is imprisonment of up to three years for developers for violation of orders of appellate tribunals and regulatory authorities. Agents or buyers committing such breach can be sentenced up to one year of imprisonment.
Asked about the impact of new act on the sector, Jaxay Shah, President of real estate industry body CREDAI said, “Supply will dip during this year but demand will improve as buyers will have increased confidence about investing in the property market”
Real Estate sector in India comprises over 76,000 companies across the country.