REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016(RERA) AND ITS IMPLICATIONS

The Real Estate (Regulation and Development) Act, 2016 here after referred to as ‘RERA’ is an act of the Parliament of India which seeks to promote the house-buyers as well as to boost investments in real estate industry. The Central and state governments are liable to notify the Rules under the Act within a statutory period of six months.

The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 sq.mtr, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution.

For ongoing projects which have not received completion certificate on the date of commencement of the Act, will have to seek registration within a period of  3 months. On successful registration, the promoter of the project will be provided with a registration number, a login Id, and password for the applicants to fill up essential details on the website of the RERA. For failure to register, a penalty of up to 10 percent of the project cost or three years imprisonment may be imposed.

Other provisions includes the following:

1] The buyers will now get a legal declaration from the developers along with all the other required documents. The legal document will be supported by an affidavit that will state the period within which a phase or the project will be completed.

 

2] The developers will have to specify in agreement of sale – the date of possession and the rate of interest in case there is a delay. The period will be different for every builder. Most of the time the construction or delivery of the projects get delayed because of the land on which the development has to take place gets involved in disputes.

 

3] The developers will now have to provide a written affidavit stating that the legal title to the land on which the project has to be built belongs to him. They will have to show the valid legal documents related to land and if another person owns the property then the authentication of the title. The developer will have to provide a written affidavit stating that the land is free from any liability.

 

4] The developer will now have to maintain a separate account in a scheduled bank – an escrow account and 70 percent of the amount received from the buyers will be deposited in the account. The capital will be used to cover the cost of the land and the construction.

 

Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints in 60 days while no time frame was indicated in earlier Bill.