Last Updated on June 15, 2024 by Satish Mishra
RERA (The Real Estate Regulation and Development Act, 2016) has given India’s first real estate sector its own regulation. The Parliament passed the act last year and it has given time to Union Ministry of Housing and Urban Poverty Alleviation till 1st May 2017 to implement this act. This act will help in formulating and notifying the rules to the regulator which will directly be beneficial in the proper functioning of the real estate sector. The basic motive of RERA is to bring clarity and exercise fair practices which will protect the interest of the buyers and impose penalties on builders.
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What basically RERA is?
As per the RERA, every state and Union Territory will have their own set of rules and regulation which will govern the functioning of the regulator. Central Government has drafted the rules for the Union Territory that includes National Capital.
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Delays in the projects are one of the biggest issues which are faced by many buyers. According to the study, there are many projects which are delayed up to 7 years. The reason for this delaying is many like diversion of funds to other projects, changes in the rules and regulation of the bodies that are involved in construction or infrastructure development like Environment Ministry, National Green Tribunal etc. sometimes, government delays the project by not providing the funds for the project or not giving the permissions. Land Acquisition is also one of the main issues. The builders sell the projects to the investors by fraud like without taking proper approvals of plans, bad construction quality, and unauthorized increase in FAR, projects that are stuck in legal proceedings etc.
Also Read- REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 CHANDIGARH
The main provisions of RERA are:
It is essential for the promoter of the Real Estate development firm to maintain a separate escrow account for each of the projects. 70% minimum money has to deposit from buyers and investors. This deposited money will only be used for the purpose of construction.
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The builders have to submit their approved plans and ongoing projects and the alterations they make. They have to provide proper details like where the cost of the project is utilized, the total number of revenue collected from the allottees, the time taken for the completion of the project, delivery of the project with the completion certificate from the Charted Accountant/Architecture/Engineer. It is compulsory for each state regulator to register their real estate projects and agents under RERA. The developers cannot invite, sell, book or advertise about their projects which are not registered under RERA. After the registration, the promoter will get the registration number as per the projects where they have to mention full details about the project which will be easily accessible to the buyers.
Also Read- HOW TO MAKE COMPLAINT UNDER RERA
If the promoter delays in delivering the project with the agreed timeline then they have to return the entire amount which is invested by the buyers along with pre-agreed interest rate as per their contract. Even RERA has bounded the developers that they can ask only 10% of property cost as an advance payment. The regulators also have the power to fine and imprison the builders and the imprisonment can go up to 3 years of a project.
The post is written by Priya Singh from ICFAI University, Dehradun 2nd Year.
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