New Law enables the buyers to enforce their rights and seek redressal of grievances.
Ending the nine year long wait, regulation of the real estate sector involving over 76,000 companies across the country has become a reality from May 1,2017 with Real Estate (Regulation & Development) Act, 2016 coming into force.
With all the 92 Sections of Act coming into the effect, developers shall get all ongoing projects that have not received Completion Certificate and new projects registered with the Regulatory Authorities within three months i.e by July end.
This enables buyers to enforce their rights and seek redressal of the grievances after such registration.
The Act ushers in much desired accountability, transparency and the efficiency in sector with Act defining rights and obligations of both buyers and the developers. This important legislation gained the momentum under this Government and could see light finally,” stated Union Minister of Housing and the Urban Poverty Alleviation Venkaiah Naidu.
Ahead of Act coming into force, Ministry of Housing and Urban Poverty Alleviation has formulated and circulated Model Real Estate Regulations for adoption by Regulatory Authorities in States/UTs.
Under these Regulations, Developers are required to display sanctioned plans and layout plans of at least 3 feet X 2 feet size at all the marketing offices and the other offices where the properties are sold, all the branch offices and head office of promoters in addition to site of project.
Real Estate Regulatory Authorities may take the decisions on all the issues preferably through the consensus failing which through voting with the Chairman using the Casting Vote in case of a tie.
Some of the major provisions of the Act, besides mandatory registration of projects and Real Estate Agents include:
1. Depositing 70 percent of funds collected from the buyers in a separate bank account in case of new projects and 70 percent of the unused funds in case of the ongoing projects.
2. Projects with plot size of minimum 500 sq.mt or eight apartments shall be registered with the Regulatory Authorities.
3. Both the developers and the buyers to pay same penal interest of the SBI’s Marginal Cost of Lending Rate plus two percent in case of the delays.
4. Liability of the developers for structural defects for five years.
5. Imprisonment of up to three years for the developers and up to one year in case of the agents and the buyers for violation of orders of the Appellate Tribunals and the 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 crore in 27 cities including 15 State capitals.
About ten lakh buyers invest every year with dream of owning a house.
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- Presidency-Towns Insolvency Act,1909
- Public Premises (Eviction of Unauthorised Occupants) Act,1971
- Real Estate (Regulation and Development) Act,2013
- Real Estate Regulation and Development Act,2016
- Requisitioned Land (Apportionment of Compensation) Act,1949
- Requisitioning and Acquisition of Immovable Property Act,1952
- Slum Areas (Improvement and Clearance) Act,1956
- Transfer of Property Act,1882
- Urban land (Ceiling and Regulation) Act,1976
- Urban Land (Ceiling and Regulation) Repeal Act,1999
- Waste Lands (Claims) Act,1863