Historic RERA comes into effect
Author: Desk May 1, 2017
The much-awaited Real Estate Act comes into force from May 1, with a promise of protecting the right of consumers and ushering in transparency.
Hailing it as the start of a new era, Urban development Minister Venkaiah Naidu said the clock begins to tick for registration of projects by developers. The Act promotes accountability, transparency & efficiency in the sector. Buyer is set to be King and the promoter benefits from king’s confidence.
The Real Estate Regulation and Development Act comes into force 9 years after it was first mooted. PM Narendra Modi’s personal interest has made it a reality now. Enacting the act gained momentum under the Modi government.
It has been made more effective, even going beyond the Select Committee’s report. The Act forges a happy, mutually beneficially alliance between buyers & developers. Rights & duties of buyers and promoters are now clearly defined.
The developers will now have to get the ongoing projects that have not received completion certificate and the new projects registered with regulatory authorities within 3 months from May 1.
Under the rules, it is mandatory for the states and UTs to set up the authority. This Authority will address redressal of grievances against any builder. Some of the major provisions of the Act, include depositing 70 per cent of the funds collected from buyers in a separate bank account for construction of the project. This will ensure timely completion of the project as the funds could be withdrawn only for construction purposes.
The law also prescribes penalties on developers who delay projects. All developers are required to disclose their project details on the regulator’s website, and provide quarterly updates on construction progress.
In case of project delays, the onus of paying the monthly interest on bank loans taken for under-construction flats will lie on developers unlike earlier, when the burden fell on home buyers.
Clearly the Real Estate (Regulation and Development) Act will usher in a paradigm shift in the realty sector, making the home buyer king.