Good news for home buyers! 10% interest for delay in delivery of project

New Delhi: In what could give a breather to home buyers, the interest rate on delayed project has been fixed at 10 percent, as per a news paper report.

The Times of India, quoting Anthony De SA, Chairman Real Estate Regulatory Act (RERA), Madhya Pradesh, said that buyers of housing project will get 10 percent interest of the amount they have invested as against Rs 5-10 per sq ft.

Buyers of delayed housing projects will get interest on the invested amount for the delay period, the  TOI said.

As many as 14 states and union territories have implemented the Real Estate (Regulation and Development) Act and another 14 states are in the process of notifying the rules, a senior government official said yesterday

The ongoing real estate projects need to be registered by July-end with the regulator set up under this law, Ministry of Housing and Urban Poverty Alleviation joint secretary Rajiv Ranjan Mishra said, "So far, 14 states and UTs have implemented this law. There are other 14 states which are in process of notifying the rules. We hope that they will do it soon," he said on the sidelines of a realty conference organised by FICCI, Grant Thornton and Khaitan & Co.

The law, which aims to protect property buyers from fly by night operators, was passed by Parliament in March 2016 and the Act came into force from this month.

The states and UTs that have notified this law are Andhra Pradesh, Bihar, Gujarat, Kerala, Maharashtra, Odisha, Uttar Pradesh, Chhattisgarh, Andaman & Nicobar Islands, Chandigarh, Dadra & Nager Haveli, Daman & Diu, Delhi, and Lakshadweep.

As per the provisions of this law, the ongoing projects, for which the completion certificate has not been issued, developers have to make an application to the authority for registration of projects within a period of three months from the date of commencement of this Act.

Additional Chief Secretary of Housing Urban Development, Punjab government, Vini Mahajan said the rules under this law cannot be beyond the Act.

Dilabag Singh Sihag, RERA Haryana Committee, said the draft rules has been issued for public consultation and a final notification would be issued soon.

The developers can sell their flats in the ongoing projects till July, the regulators clarified.

Earlier this week, Minister of Housing and Urban Poverty Alleviation M Venkaiah Naidu had written to chief ministers to soon notify the rules under the Real Estate Act. He expressed "deep concern" over reports that some states/UTs have diluted the key provisions of the Act.

Under this law, the Real Estate Regulatory Authority has to be established in each state for regulation and promotion of the real estate sector. The regulator has to ensure that property transaction takes place in a transparent manner and also protect the interest of consumers.

Apart from mandatory registration of projects and real estate agents, the law has prescribed that developers have to deposit 70 per cent of the funds collected from buyers in a separate bank account for construction of the project. This will ensure timely completion of the project.

The law also provides for penalties on developers who delay projects.

With PTI Inputs