The Real Estate (Regulation & Development) Act,2016 coming into effect, developers shall 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.
Major provisions of the Act
- 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.
- 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.
Real Estate Regulatory Authorities
- To take decisions on all issues preferably through consensus failing which through voting with Chairman using Casting Vote in case of a tie.
- There shall be quorum for the meetings of the Regulatory Authorities and if a meeting is adjourned due to lack of such quorum, such meeting can take place without quorum.
- Members of Regulatory Authorities shall declare interest if any in the matters coming up for discussion and shall not participate there in.
Need for an Act
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 an 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.
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.
Source : Pib
GS II : Government policies and interventions for development in various sectors and issues arising out of their design and implementation