The Real Estate (Regulation & Development) Act, 2016, the landmark realty law to protect home buyers from fraudulent developers is enrolled from today nine years after it was conceived. It is an Act of the Parliament of India which seeks to protect homebuyers as well as help to boost investments in the real estate industry. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. This Act came into force on 1 May 2016 with 59 of 92 sections notified. Remaining provisions came into force on 1 May 2017. The Central and state governments are liable to notify the Rules under the Act within a statutory period of six months.
It makes it mandatory for all builders – developing a project where the land exceeds 500 square metre – to register with RERA before launching or even advertising their project. Developers have been given time until July 31 to register.
#RERA Congratulate @MVenkaiahNaidu @dev_fadnavis Govt 4 implemntin RERA 1May2017, landmark law 2 safeguard home buyers, developers & brokers
— ashish shelar (@ShelarAshish) May 1, 2017
#RERA to increase transparency in Real Estate sector. Know how this historic regulation will impact you positively-https://t.co/ErvF0PiCDJ
— M Venkaiah Naidu (@MVenkaiahNaidu) April 30, 2017
Things you should know about RERA
- Ongoing and under construction projects will also come under this act. According to this act, developers will have to pay 70% of the total amount received from the customers within the period of three months into a different bank account starting from the date when the project was registered.
- In case the developers did not pay any refund the project got delayed but with RERA they will have to pay a compensation amount to the customers. This will account for about 11 to 12% rate of interest which includes the lending rate of 2% as well.
- RERA act will have to be followed by Developers, agents, and customers and in case anyone is not following then they will get imprisonment of 3 years along with paying 10% of the total project cost for the developers and 10% of the property cost in case of the agents and customers both.
- Buyers and the developers are free to file their complaints and necessary action should be taken by the authorities as well as the concerned officers within the period of 60 days. No discrimination should be made on the part of the both the buyers and the developers.
- Under this RERA act developers will have to share complete information with the public like the design, sanctioned plans, delivery date of the project, money used, changes if made in the design or the plan, amount gathered etc. Thus the buyers will have all the details about a specific project and can decide whether it is worth investing or not. It is essential to declare the size of the home depending on the carpet area whether it was sold before the introduction of the RERA. This is done to ensure greater transparency which was the first motive of the government.
- Under this act Project registration is the first step in which the developers need to submit documents which include their PAN card, balance sheet information, annual report, profit and loss statement, an account of the cash flow, auditors report for the last 3 years, collaboration agreement copies along with authenticated copy of the project name too. The developer needs to mention the closed as well as the open parking areas in their project.
- According to RERA developer will have to keep the buyers up to date regarding the construction status of the project. This will be made available on the official website from where the buyers can see the design of the project, type of apartments, facilities included, design structure etc in the form of photos. Floor wise photos need to be uploaded before the end of every quarter in order to provide a complete idea of the construction.
- There will be no need to file any income tax returns because of the confidentiality associated with the project thus reducing the burden on the shoulders of the developers. Both the developers and the buyers can find complete and updated information on the RERA available on the website.
#RERA forges a happy, mutually beneficially alliance between buyers & developers. Rights & duties of buyers, promoters clearly defined. 5/n
— M Venkaiah Naidu (@MVenkaiahNaidu) April 30, 2017
Enacting #RERA gained momentum under our govt. We made it effective, going beyond Select Committee report. To benefit buyers every yr. 4/n
— M Venkaiah Naidu (@MVenkaiahNaidu) April 30, 2017
#RERA comes into force 9 years after it was first mooted. PM @narendramodi’s personal interest made it a reality now.
3/n— M Venkaiah Naidu (@MVenkaiahNaidu) April 30, 2017
RERA (Real Estate Regulatory Authority Act) main motive is to assist the developers and buyers both so that delivery can be made timely and the developers need to face any loss. RERA is a revolution to clean up the real estate industry and taking it to new heights.
