New Delhi: The much-awaited Real Estate Act comes into force from Monday (May 01) with a promise of protecting the right of consumers and ushering in transparency.
The government has described the implementation of the consumer-centric Act as the beginning of an era where the consumer in king. Real estate players have also welcomed the implementation of the Act, saying it will bring a paradigm change in the way the Indian real estate sector functions.
The Real Estate (Regulation and Development) Bill, 2016 was passed by Parliament in March last year and all the 92 sections of the Act comes into effect from May 1.
Key Highlights of Act
-Projects with plot size of minimum 500 sq.mt or 8 apartments shall be registered with Regulatory Authorities.
-The developers will now have to get the ongoing projects that have not received completion certificate and the new projects registered with regulatory authorities within 3 months from 1 May.
-Depositing 70% of the funds collected from buyers in a separate bank account in case of new projects and 70% of unused funds in case of ongoing projects.
-Both developers and buyers to pay the same penal interest of SBI’s Marginal Cost of Lending Rate plus 2% in case of delays.
-In case of project delays, the onus of paying the monthly interest on bank loans taken for under-construction flats will lie on developers unlike earlier, when the burden fell on home buyers.
-All developers are required to disclose their project details on the regulator's website, and provide quarterly updates on construction progress.
-Liability of developers for structural defects for five years: RERA also states that any structural or workmanship defects brought to the notice of a promoter within a period of five years from the date of handing over possession must be rectified by the promoter, without any further charge, within 30 days. If the promoter fails to do so, the aggrieved allottee is entitled to receive compensation under RERA.
-Imprisonment of up to three years for developers and up to one year in case of agents and buyers for violation of orders of Appellate Tribunals and Regulatory Authorities.