RERA or The Real Estate (Regulation Development) Act, 2016 has finally come into effect from today after a wait of nine years. The Act would regulate the real estate sector that spreads over 76,000 companies and is expected to trigger a “new era” of transparency and efficiency for both the buyers and developers.
In a series of tweets on Sunday, Venkaiah Naidu, Union Minister of Housing and Urban Poverty Alleviation said: “Real Estate Act coming into force after a nine-year wait marks the beginning of a new era making buyer the King while developers benefit from the confidence of the King in the regulated environment.
#RERA comes into force 9 years after it was first mooted. PM @narendramodi’s personal interest made it a reality now.
3/n— M Venkaiah Naidu (@MVenkaiahNaidu) April 30, 2017
Prime Minister Shri Narendra Modi’s personal interest in this matter made the Act a reality. The Act brings in the much-desired accountability, transparency and efficiency in the sector with the Act defining the rights and obligations of both the buyers and developers. This important legislation gained momentum under this Government and could see the light finally.
#RERA promotes accountability, transparency & efficiency in the sector. Buyer set to be King. Promoter benefits from king’s confidence. 2/n
— M Venkaiah Naidu (@MVenkaiahNaidu) April 30, 2017
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The Real Estate Act 2017 has a number of significant provisions for the benefit of buyers and ensuring transparency in the real estate sector. Some of these important provisions are:
Deposits: Builders are required to deposit 70 percent of the funds collected from buyers in a separate bank account in case of new projects and 70 percent of unused funds in case of ongoing projects.
Mandatory registration: All projects with the plot size of a minimum 500 sq.mt or eight apartments need to be registered with Regulatory Authorities.
Penal interests in case of delay: Both developers and buyers have to pay the same penal interest of SBI’s Marginal Cost of Lending Rate plus 2% in case of delays.
Liability: Liability of developers for structural defects for five years.
Punishment: Imprisonment of up to three years for developers and up to one year in the case of agents and buyers for violation of orders of Appellate Tribunals and Regulatory Authorities.