Study on Real Estate Regulation and Development Act , 2016
This act has brought in many positive changes in the real estate sector .
This article throws light on the regulations of RERA in the economy and as a whole.
Real estate sector in India was highly unorganised and under developed. The interest of buyers and consumers were not protected.
This Acts helps in regulating the real estate sector in the country. It is not confined only with residential but also commercial real estate.
Under this act there is a Real Estate Regulatory Authority in centre ,state and union territories .
Every state would have regulatory authority and it’s provisions may vary from state to state.
RERA has brought upon mandatory discloser of all the minute details relating to the project to the buyers. Provisions under this Act :
1- focus and cross verify the real state constructions and transactions of their own state, mainly with the purpose of developing the real estate sector in the economy and also provide the government with necessary advice.
2-These authorities acts as a nodal agency and coordinate efforts of the government and various stake holders in the real estate sectors.
3-The main of these authority would be to boost the economy sector of the state.
4 – It deals with the real estate projects as well as real estate agency registration.
The registration is mandatory with the respective state RERA for all projects which exceeds an planning area of 500 sq. metre or a proposed building or real estate has more than 8 no. of apartments.
5- If any agent tends to sell any plot , house, building it is mandatory for the agent to register with the authority.
Failure in registration of the project with RERA, it would lead to paying compensation from the developers that is 10% of the project estimated cost.
This act mandates the construction agency to keep the project transparent with the buyers. It gives a sense of confidence and trust in consumer’s mind as all the minute details of the project are showcased to them. A promoter is a person who is actively involved in the project.
The promoter is responsible to lay down and disclose every information and details of the project. Promoter needs to adhere with the specification of the project , rectify the structural defects , refund the money in case of default from their end.
Promoter needs to make a mandatory deposit of 70% of the money collected by the allottees or buyers. The money is deposited in an escrow account and is maintained by the scheduled bank.
The deposited money is restricted to be used only in the purpose of construction of project.
The promoter adhere to the specifications of the project and once the plan is declared it cannot be changed in the future until the 2/3rd majority buyers of the project agrees on it .
Right of the buyers
1 – At every stage of construction the buyers have the right to ask for time schedule of the project.
2 – The promoters tend to mention the completion period of the project within a period of time before starting the project . The buyers have the right to ask for possession of their area when the date of completion arrives. In case of failure of completion of the project within the time mentioned , an interest has to be paid to the buyers.
3- The buyers can for refund and interest in case of any default from promoter’s side. The default case arrives when there is difference in the project promised v. the final project.
4 – The buyer can report construction defects within 5 years from the time the place is handed over to them and ask for rectification of the defects.
The Acts also prohibits the developers to collect more than 10% of the advance from the buyers.
Previously ,In case of grievances faced by the allottees , the allottees use to approach the consumer court for the dispute settlement but after the introduction of this act , the buyers in case of any grievances can contact RERA . Within 60 days they can re appeal for the grievances in Real Estate Appellate Tribunal if they are not satisfied with the verdict of RERA.REAT has the powers of the civil courts and solves the dispute with 60 days which is why it is called fast track dispute settle
The developers can sell and charge buyer for only the carpet area viz, the net usable space of that area and not lifts , balconies , stairs and lobby. It gives a clear mindset to the buyer about the area they have for utility.