Rera / Real Estate Regulation and Development Act-2016
Real Estate Regulation and Development Act-2016
The Real Estate (Regulation and Development) Act, 2016 was passed by the Rajya Sabha on 10th March, 2016 and by the Lok Sabha on 15th March, 2016. The Bill passed by Parliament was assented to by the President on 25th March, 2016.
Section 2, sections 20 – 39, sections 41 – 58, sections 71 – 78 and sections 81 – 92 notified for commencement with effect from 1st May, 2016.
Sections 3 to 19, section 40, sections 59 to 70, sections 79 to 80 notified for commencement with effect from 1st May, 2017.
The landmark legislation Real Estate (Regulation and Development) Act, 2016 (RERA), marking the beginning of a new era in the Indian real estate sector and a step towards reforming the real estate sector in India, encouraging greater transparency, citizen centricity, accountability and financial discipline.
The core objective of this transformative legislation is to ensure regulation and promotion of real estate sector in an efficient and transparent manner and to protect the interest of home buyers.
The Real Estate Act makes it mandatory for each state and union territory, to form its own regulator and frame the rules to govern the functioning of the regulator.
Real estate projects need to be registered with State Real Estate Regulatory Authority. Promoters cannot book or offer these projects for sale without registering them. Real Estate Agents dealing in these projects also need to register with Real Estate Regulatory Authorities.
70% of the collected amount from buyers must be deposited in an escrow bank account for construction of that project only and the withdrawals have to be certified by Architects, CA and Project Engineers.
Benefits under the Real Estate (Regulation and Development) Act, 2016 to Consumers:
RERA along with the Rules would ensure timely completion of projects. This is helping to achieve the vision of Hon’ble Prime Minister “HOUSING FOR ALL”. It prevents diversion of funds and protects the buyers’ interests.
The Act helps to curb black money . It makes operations transparent – project information will be available – promoting informed choice for buyers. The Disclosure of ‘Carpet Area’ for sale curbs the unfair trade practices.
“Agreement for Sale Rules" has ended the one-sided agreements and Buyer exploitation in the sector.
Fast track dispute resolution mechanism through Real Estate Regulatory Authority and Appellate Tribunals across Country.
Provision of equal rate of interest to be paid by the promoters and buyers, in case of default or delays thus brining equity in operations.
Benefits under the Real Estate (Regulation and Development) Act, 2016 to Developers:
The Act eliminates fly-by-night operators from the sector promoting genuine developers. It infuses credibility by making the sector mature and transparent.
Channelize investment into the sector.
Act/Rules would restore investment sentiment of consumers.
Regulatory mechanism will increase the confidence of the financial institutions in real estate sector.
Proper regulatory mechanism of the Act will increase foreign investment (FDI, ECB) in the real estate sector.