The Rajya Sabha had passed the Real Estate (Regulation and Development) Bill, 2015 to protect the interests of consumers and curb the malpractices in the real estate sector.
The bill seeks to create a uniform regulatory mechanism across the country and enhance the growth of construction sector. It also ensures to bring transparency and accountability in the real estate sector to access capital and financial markets essential for its long term growth.
The Real Estate (Regulation and Development) Act, 2016 came into force on 1 May 2016.
In this regard, Union Ministry of Housing and Urban Poverty Alleviation (HUPA) had notified 69 of the total 92 sections of the Act to bring it into force from 1 May 2016.
Key provisions of Acts
Sets up in motion the process of making necessary operational rules and creation of institutional infrastructure for protecting the interests of consumers.
Promotes the growth of real estate sector in an environment of trust, confidence, credible transactions and efficient and time bound execution of projects.
Real Estate Regulatory Authority will be formulated within one year as per the mandate of Act. Regulatory Authorities will have to dispose of complaints in 60 days and Appellate Tribunals will be required to adjudicate cases in 60 days.
Establishes state level regulatory authorities called Real Estate Regulatory Authorities (RERAs) and tribunals called Real Estate Appellate Tribunals (REAT) to settle disputes.
Enforces the contract between the developer and buyer and fast track the mechanism to settle disputes.
70% of the amount collected from buyers for a project must be maintained in a separate bank (escrow) account and must only be used for construction of that project. State government can alter this amount to less than 70%.
In case of delays in completion of projects on time, developers will have to pay the same penal interest rate as the buyer does.
All information for registered projects must be disclosed on website of the RERA. It will include details of promoters, land status, layout plan, schedule of execution and status of various approvals.
Promoters and real estate agents must register project details with RERAs who intend to sell any plot, apartment or building.
The commercial real estate also has been brought under its ambit. Projects under construction are also required to be registered with the RERAs.
The term carpet area has been clearly defined in order to eliminate any scope for wrongdoing.
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