Things You Need To Know About The Real Estate Regulator Bill
The Rajya Sabha passed the new property bill, in 2016 March, called the Real Estate Regulator Bill. It seeks to increase the percentage of investments in the Indian real estate sector. It came to force from May 1st, 2016. The bill has brought about various implications with the most prominent one being the clarity for property buyers.
Here is a list of changes brought about by the Act:
- The Act establishes state-level authorities, RERAs (Real Estate Regulatory Authorities) who regulate all transactions of both residential and commercial projects. The functions of the tribunal includes the registration of all projects measuring more than 500 sq. meters or more than eight apartments. They are required to adjudicate cases and complaints within 60 days.
- This Act makes it compulsory for every developer to disperse details of the project like land title status, layout plans and government approvals to RERA and then give out the details to the customers. For instance, if you are looking to buy a house in Kolkata, the property dealer in Kolkata is required to present you with information like the schedule, timeline and timetable for completion of the project.
- According to the Bill, every project developer is required to deposit 70% of the project funds in a separate bank account and this has to necessarily be used only for constructional purposes of the same project. This move is directed to curb the investment of one project funds in another, thereby, reducing the delay in completion and handing over.
- The bill deters the developer from making any changes to the proposed plan without written consent from the buyer. This aims at putting an end to the common practice of increasing the unit price.
- Before this Act, there was no proper definition for super built up area and there was a lot of ambiguity surrounding the term. The developers misused this and they wrongly marketed their projects based on this. This Act, however, brings the developers under an obligation to only quote prices based on the carpet area of the unit. Moreover, the clear definition of carpet area has given the consumers the much needed clarity.
- Before this bill was passed, the developer faced no kind of loss when there’s delay in project completion. However, this new law mandates that the developer will be obligated to pay the same amount as interest which is charged by him from the buyer when he defaults in payment.
- Any consumer can contact and write to the respective developer within a year of possession, in case of deficiencies, to demand after sales service.
- Before the passing of this bill, the developer suffered in no way when the project completion gets stalled. However, the new law mandates that any delay in completion will put the developer under the obligation to pay the same amount as interest which he is charging from the buyer on delay in payment.
- The maximum jail period for the violation of appellate tribunal’s order by a developer is 3 years with or without fine.