The recent tweets of Union housing minister Venkaiah Naidu revealed a lot on the real estate regulatory act (RERA). RERA came into force since yesterday, after a prolonged halt of 9 years. This enactment is one of the remarkable steps of the union government till now, which will truly bring the new era for the property buyers. Real estate sector will develop positive market sentiment once again with the means of RERA. The central minister also assured that every small/big real estate transaction with be performed in a regulated environment now on.
Most of the Naidu’s tweets are about acclaiming PM’s outstanding initiative to bring forth RERA into action.
This act will bring back liability, precision and effectiveness into the realty sector. Both the buyers’ and the sellers’ rights and obligations will be cross-checked under the 92 sections of the Real Estate (Regulation & Development) Act, 2016.
The ministries of housing & urban poverty alleviation (HUPA)has also framed and passed the model real estate regulations for approval by the regulatory authorities in the states and union territories (UTs).
All the promoters are now required to show their approved plans and layout plans of at least 3 feet X 2 feet size at all market offices and the other related offices where properties are on trade including all branch and state offices of the promoters comprising the project site.
Real estate regulatory authorities will unanimously take decisions on all realty issues. In case there’s a tie, then the process will be performed through voting with chairman using casting vote. Certain level of attendance is required for the meetings of the regulatory authorities, if a meeting is put off due to lack of such quorum, that meeting can be executed without maintaining the quorum. Members of regulatory authorities will assert interest if any in the matters coming up for debate and should not chip in there in.
Developers will have to register their ongoing projects (without completion certificate) and also the new projects with the regulatory authorities within the end of July. Real estate agents have 3 months for registration.
Builders will have to deposit 70% of the resources collected from buyers and investors in a different bank account in case of new projects and 70% of fallow funds in case of enduring projects. Projects with plot size of lowest 500 sq meter or eight apartments will have to be registered with regulatory authorities.
Both developers and consumers will currently have to pay the same penal interest of SBI’s marginal cost of lending rate plus 2% in case of postponements. Developers will be answerable for structural imperfection for five years.
RERA also highlights the clause of imprisonment of up to three years for developers and up to one year in case of agents and buyers for contravention of instructions of appellate tribunals and regulatory authorities.
As per the ministry of HUPA data there were 76,044 companies in realty business at the time of passing of the Bill in Rajya Sabha in March last year; this includes 17,431 in Delhi, 17,010 in West Bengal, 11,160 in Maharashtra, 7,136 in Uttar Pradesh, 3,054 in Rajasthan, 3,004 in Tamil Nadu, 2,261 in Karnataka, 2,211 in Telangana, 2,121 in Haryana, 1,956 in Madhya Pradesh, 1,006 in Odisha. 1,270 in Kerala and 1,202 in Punjab.
In May 2008, the ministry of HUPA first framed a concept-paper on regulation of real estate sector and a model law for legislation by states and UTs. Still, the Real Estate (Regulation & Development) Act, 2016 was at last passed by Rajya Sabha on March 10, 2016 and Lok Sabha on March 15, 2016.
On May 1 last year the government notified 59 sections of the Act, while the residual 32 sections will roll out from May 1 this year.
All the states had been asked to notify the realty rules, within April 30, 2017 which apparently didn’t turn out to be the same. 13 states and UTs have notified the rules by far, while another 16 are in drafting stage. States have an additional three months to notify the RERA rules and assign the regulator.
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