New Delhi: The Centre on Monday notified the rules for Real Estate Act, that seeks to regulate the housing sector besides bringing transparency and ensuring timely completion of projects, which will be applicable for five Union Territories.
The rules notified by the Housing Ministry will be applicable to the Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, and Lakshadweep, an official release said.
The Ministry of Urban Development will come out with such rules for the National Capital Region of Delhi while the other states and UTs will come out with their own rules.
The Act, which is touted as a major reform measure to regulate the vast real estate sector, requires registration of all projects with state-level Real Estate Regulatory Authorities to ensure protection of the interests of both buyers and builders.
The rules also require builders to deposit 70 percent of unused amounts collected for ongoing projects in a separate bank account to ensure timely completion of the projects.
The rules state that a developer will be required to refund or pay compensation to the allottees with an interest rate of SBI's highest Marginal Cost of Lending Rate plus two percent in case of delay in project.
It stipulates that such payment to the allottee be made within 45 days of it becoming due.
On suggestions from promoters, to incentivise registration of projects and real estate agents with the regulatory authorities, fee for the same has been reduced by half, the release said.
For registration of projects, the fee has been reduced to Rs 5 per square metre for up to 1,000 square metre and Rs 10 per square metre beyond this limit subject to a maximum of Rs 5 lakh per project.
However, for commercial and mixed development projects, it will be Rs 10 and Rs 15 per square metre subject to a maximum of Rs 7 lakh.
For commercial projects, it will be Rs 20 and Rs 25 per square metre subject to a cap of Rs 10 lakh per project. For plotted development, it is Rs 5 per square metre with a ceiling of Rs 2 lakh.
The fee for renewing registration of projects with the regulatory authorities will be half of the registration fee, the release said.
For registration of real estate agents, the fee now prescribed is Rs 10,000 for individuals and Rs 50,000 for other entities, as against Rs 25,000 and Rs 2,50,000 proposed in the draft rules, it said.
Similarly, fee for renewal of registration of projects and agents have also been reduced to Rs 5,000 and Rs 25,000 respectively.
According to the rules, for every appeal to be made to
the Real Estate Appellate Tribunal, the fee proposed is Rs 5,000, while for every complaint to be made to Regulatory Authorities and Adjudicating Officers, fee proposed is Rs 1,000, the release said.
As per the rules, Adjudicating Officers, Real Estate Authorities and Appellate Tribunals shall dispose of complaints within 60 days.
The rules also provide for compounding of punishment with imprisonment for violation of the orders of Real Estate Appellate Tribunal against payment of 10 percent of project cost in case of developers and 10 percent of the cost of property purchased in case of allottees and agents, the release said.
Compliance with reasons for punishment shall be complied within 30 days of compounding, it said.
In case of the ongoing projects, developers will have to make public the original sanctioned plans with specifications and changes made later, total amount collected from allottees, money used, original timeline for completion and the time period within which the developer undertakes to complete it.
The requirement of disclosing Income Tax returns, proposed earlier, by a promoter has been withdrawn in the final Rules keeping in view the confidentiality attached with them and as pointed out by legal experts and promoters, the release said.
As per a notification issued in April this year, the Real Estate rules were to be notified by October 31 this year or within six months of the Act coming into force. The ministry's April notification brought into effect 69 of the 82 sections of the Act from May 1 this year.
With notification of Real Estate Rules by the Ministry of Housing & Urban Poverty Alleviation, states and Union Territories are also expected to do so soon.
As per the provisions of the Act, the Real Estate Regulatory Authorities are required to be put in place by April 30 next year before the full Act is brought into effect the next day.
The Real Estate (Regulation and Development) Bill, 2016 was passed by the Rajya Sabha on March 10 and by the Lok Sabha on March 15 this year.