Real Estate Regulation Act
Ending the nine year long wait, regulation of real estate sector involving over 76,000 companies across the county becomes a reality from May 1, 2017...
Ending the nine year long wait, regulation of real estate sector involving over 76,000 companies across the county becomes a reality from May 1, 2017 with the Real Estate (Regulation & Development) Act,2016 coming into force.
With all the 92 Sections of the Act coming into effect from the day, developers will get all the ongoing projects that have not received Completion Certificate and the new projects registered with Regulatory Authorities within three months i.e., by July end. This enables the buyers to enforce their rights and seek redressal of grievances after such registration.
The Act ushers in the much desired accountability, transparency and efficiency in the sector with the Act defining the rights and obligations of both the buyers and developers. This important legislation gained momentum under this Government and could see the light finally.
Some of the major provisions of the Act, besides mandatory registration of projects and Real Estate Agents include:
• Under these Regulations, developers are required to display sanctioned plans and layout plans of at least 3 feet X 2 feet size at all marketing offices, other offices where properties are sold, all branch offices and head office of the promoters in addition to the site of project.
• Depositing 70% of the funds collected from buyers in a separate bank account in case of new projects and 70% of unused funds in case of ongoing projects;
• Projects with plot size of minimum 500 sq.mt or 8 apartments shall be registered with Regulatory Authorities;
• Both developers and buyers to pay the same penal interest of SBI’s Marginal Cost of Lending Rate plus 2% in case of delays;
• Liability of developers for structural defects for five years; and
• Imprisonment of up to three years for developers and up to one year in case of agents and buyers for violation of orders of Appellate Tribunals and Regulatory Authorities.
As per industry information, between 2011 and 2015, real estate projects in the range of 2,349 to 4,488 projects were launched every year amounting to a total of 17,526 projects with a total investment of Rs.13.70 lakh cr in 27 cities including 15 State capitals. About ten lakh buyers invest every year with the dream of owning a house.