Taking a significant step forward in enactment of the Real Estate (Regulatory and Development) Bill, 2016 as a law, the Upper House of the Parliament, Rajya Sabha, passed it with a voice vote. With this passage and upon signing by President of India, the Bill will become the law which many homebuyers had wanted.
The law would find good favour with buyers and will put builders on serious notice to complete project as per their promises. Even the real estate agents are sought to be regulate under the Bill.
Main Provisions of the Bill:
1. Provision for State level Real Estate Regulatory authorities (RERAs) for grievance redressal.
2. Both residential and commercial project in its ambit.
3. Every project of more than 500 sq meters area or more than 8 apartments has to be registered with RERA. If this is not done, there is provision of fine up to 10 percent of project cost. Further violation will result in imprisonment.
4. Developer has to park 70 percent of project funds into a dedicated escrow account. This has been done to ensure that the builder first completes the project for which the money has been taken and that it is not invested in other projects.
5. Developer to give all information relating to project plan, approvals, layout, status of the title to land, sub contractors and schedule of completion with RERA.
6. Developer prohibited from launching or even marketing of projects till the time all approvals have been obtained and the project is registered with RERA.
7. Sale prices to be based on Carpet Area which has been clearly defined in the law. Spaces such as kitchen and toilet have been included in its definition.
8. Delay in project will cost developer same sum of money which the customer pays as EMI to banks.
9. Violation of order of RERA can lead to imprisonment up to 3 years with or without fine.
10. Buyer given the right to demand after sales services within 1 year of taking possession in case there is any deficiency.
11. Developer liability increased to 5 years in cases where he is not able to repair the structural defects. Thus, the structural safety and construction quality has to be considered till 5 years from date of possession.
12. Real Estate Appellate Tribunal to pass verdict in 60 days, not 90. RERAs to dispose of complaints in 60 days.
13. Even allottees will have to face penalty if they do not pay their dues on time.
14. No alterations in layout unless consent of 2/3rd of allottees is taken.
15. In case of abandonment of the project by developer, either the State of the allottees can take up completion of project.
16. Real Estate Agents shall also need to be registered with RERA.