RERA (The Real Estate Regulation and Development Act, 2016) is India’s first Act to give real estate regulation and laws. The Parliament of India has passed the act last year i.e. 2016 and 1st May 2017 was given to Union Ministry of Housing and Urban Poverty Alleviation for the implementation of this Act. This Act formulates and notifies the rules to the regulate, directly or indirectly, for the proper functioning of the real estate sector. The basic motive of introducing RERA Act is to bring fair practices with the clarity to the buyers about their rights and interest and heavy penalties will be imposed on builders if they try to exercise unfair practice or infringe the buyer’s rights and interests.
What is RERA all about?
According to the RERA Act, every State and Union Territory of the country has their own set of rules and regulation which governs the functioning of the regulator. Central Government of India has especially drafted separate rules for the Union Territories including Delhi.
One of the biggest issues faced by the buyers is the delay in projects. According to the study and reports, for up to seven years the projects are delayed. The reason for the delay is:
- Diversion of funds to other projects,
- Changes in the rules and regulation of the department that are involved in the work of construction or in infrastructure development like:
- Environment Ministry;
- National Green Tribunal etc.
- Sometimes, government delays the project by not passing the order of the project or by not providing funds for the project.
- The issue of Land Acquisition,
- Selling of the projects by the builders to the investors by fraud like without approvals of plans, bad quality of construction, and unauthorized FAR, delays in projects due to legal proceedings etc.
IMPORTANT PROVISIONS OF RERA ARE:
The real estate development firm has to maintain a separate account for the projects. Minimum of 70% money has to deposit from buyers and investors. This deposited money is used for the construction.
The builders submit the details of the projects or work like approved plans, their ongoing projects and the alterations they make. They have to provide each and every detail of the projects like where cost is utilized in the project, collection of revenues from the allottees, the time duration taken for the completion of the project, competition certificate of the project from the Charted Accountant/Architecture/Engineer. Regulators of each state have to compulsorily register their real estate projects and agents who are working under RERA. The developers who have not registered their projects under RERA Act cannot invite, sell, book or advertise about it. After the registration, the promoter gets the registration number according to the projects where they have to provide full details of their project which is easily accessible for the buyers.
While delivering the given project, if the builder delays in fulfilling it then they have to return the entire amount to the buyers along with interest as decided at the time of contract. As RERA also limit the developers from asking any advance payment above 10% of the property cost. The power has been given to regulators to charge fine as well as imprison the builders which may last up to 3 years of the project.