The Real Estate (Regulation and Development) Act – RERA has come into effect from May 1, 2017. Government’s objective behind this Act is to protect home buyers and bring in overall transparency in the real estate sector which will encourage genuine private developers.
- It is to be noted that Real Estate (Regulation and Development) Bill, 2016 was passed by Parliament in March 2016. So far only 13 States and Union Territories have notified the rules under this act.
Some important provisions of RERA:
- All State/UT governments have to appoint regulatory authorities for implementing the rules framed under RERA.
- Now onwards, developers will have to register all new projects with the authorities. Even the ongoing projects that have not received completion certificates will have to be registered within next three months.
- It has been made mandatory for developers to disclose all details about the project on regulator’s website and provide updates about construction progress at intervals of three months.
- The real estate agents will also have to get themselves registered with the concerned authority.
- The developers will have to deposit 70% of the funds collected from buyers in a separate bank account for construction of the project, which could be withdrawn only for construction purposes.This provision has been laid out to ensure timely completion of projects.
- Developers who delay the project will be subjected to penalty. In addition, they will also have to pay monthly interest on bank loans taken for under-construction flats.
- It is promoter’s responsibility to rectify any structural or workmanship defects which has been notified by the buyer within a period of five years from the date of handing over possession. Such defects have to be rectified within 30 days and the buyer should not be charged for the same, failing which the buyer is entitled to receive compensation under RERA.
Overview of Indian Real Estate Market:
- As per industry data, around 17526 real estate projects with investments of Rs 13.70 lakh crore were launched in 27 cities of India from 2011 – 2015.
- Every year, about 10 lakh buyers invest with the dream of owning a house.
- Indian real estate sector comprises over 76000 small and big companies.