From today, the much-awaited Real Estate Regulation Act (Rera) comes into force and now home buyer will be the king no longer at the mercy of realtors.
That shold be the ideal situation but so far, only 13 states including Maharashtra, Uttar Pradesh, Gujarat, Madhya Pradesh, Odisha and Delhi have notified the rules while another 16 have prepared draft rules and legal opinion is being taken in respect of North-Eastern states, given the land ownership issues there.
The Real Estate (Regulation and Development) Bill, 2016, was passed by the Rajya Sabha on March 10 and by the Lok Sabha on March 15 last year.
About 60 sections of the Act were brought into force with effect from May 1 last year. The remaining 32 sections were notified on April 19. The Maharashtra government has been proactive on this, clearing the state Real Estate Regulatory Authority and appointing the housing regulator even before the Centre made the norms effective.
States including Haryana, Punjab, Kerala, Rajasthan, Karnataka, others, have reportedly prepared draft rules and are expected to notify them soon.
The rules are serious about under-construction residential projects.
Developers of ongoing projects, as on the date of commencement of the rules which have not received completion certificates, will need to apply to the regulatory authority for registration of their project within three months of the commencement of the Act.
The consumer-centric law prescribes compulsory registration of all ongoing and upcoming real estate projects, as well as penalties and punitive measures on developers who delay their projects.
All developers are required to disclose their project details on the regulator’s website and provide quarterly updates on construction progress.
In the case of project delays, the onus of paying the monthly interest on bank loans taken for under-construction flats will lie on developers.
A separate account will have to be used to deposit 70% of the money collected for the project’s construction, and developers can draw from it only for construction purposes. The appellate tribunal will hear and act on all related grievances.
Also, switch from build-up to carpet area will give clarity of what actually buyer will get and the developer cannot tamper the offered design, which will attract penalty. Last, but not the least, the parking area needs to be clearly mentioned in the agreement.
Here's what the act says:
All developers are required to disclose their project details on the regulator’s website, and provide quarterly updates on progress
In case of delays, the onus of paying the monthly interest on bank loans will lie on developers
About 70% of the money collected for the project’s construction would have to be kept in a separate account
The switch from built-up to carpet area will give clarity on what the home buyer will actually get