New Delhi, May 1: The Real Estate (Regulation and Development) Act has come into effect on May 1. Though the central legislation has been passed in Parliament, the states will have to notify the rules as land is a state subject. So far only 13 states and union territories have notified the rules. The legislation has been passed keeping in mind the interest of the consumers. The law will protect home buyers from cheating by builders who are notorious for their unethical practices.
The RERA Act provisions for a Regulatory Authority in every state which will frame the rules and see its implementation. According to reports, the main objective is to promote the real estate sector and ensure transparency in the sale of properties. Here are the main provisions of the Act that will protect homebuyers.
- While booking the flat the promoter of the project will have to furnish details of sanctioned plans, layout plans all the necessary permissions of authorities. The stage-wise time limit for the development of the project will also have to given to the consumers. Details of electricity, water supply will also have to be furnished.
- The builders cannot advertise for the projects in any manner until their projects are not registered with the Real Estate Regulatory Authority. The advertisement will carry the registration number. For registration, the builder will have to furnish all the necessary approvals with the authority.
- The booking amount of a project will not exceed beyond 10 percent of the cost of the property. The booking amount cannot be charged without registration of the project. Even the towers in any housing project will have separate registrations.
- After the registration, the builder will have to create pages on RA website on which he will upload details of his project and will be required to update it every 3 months.
- A deadline will have to given to the to the buyers for the delivery of their houses. A delayed delivery will attract penalties. If the promoter fails to deliver the houses in time, he would have to pay the money back to the buyers with an interest as mentioned in the agreement. In case, the buyers insist on their houses, the builder will have to pay the interest monthly until the delivery.
- Builders will have to take the responsibility of the quality of the houses constructed. According to reports, builders will have to repair any structural defect within 30 days of the complaint, free of cost, until 5 years of possession.
- The state RA will have to specify the rate of default. Both builders and homebuyers will come in the ambit. According to reports, they will have to pay the interest rate of SBI’s highest Marginal Cost of Lending Rate plus 2%.
- According to the Financial Express, an imprisonment of up to three years for builders and one year for agents and buyers can be announced if they fail ti comply with the orders of Appellate Tribunals and Regulatory Authorities.