The long-awaited Real Estate Act is about to take place, and it promises to protect customers’ rights while also increasing transparency. Only 13 states and union territories, however, have been notified of the new rules.
According to the government, the introduction of this customer-centric Act marks the start of an age in which the customer will hold power. The real estate industry is also expecting the Act’s introduction. They feel that this change will improve the real estate sector’s functionality.
The government has managed to pass rules that will protect house buyers while also promoting true private players. The Real Estate (Regulation and Development) Bill of 2016, which was approved in March of last year, went into operation on May 1.
“After a nine-year wait, the Real Estate Act has finally come into force, entering a new era,” said Housing and Urban Poverty Alleviation Minister M Venkaiah Naidu.
He went on to say that the rule will make the “Buyer the King,” while developers will take advantage of the benefits of the improved consumer confidence in a regulated environment.
“The Act brings much-needed accountability, transparency, and efficiency to the industry by specifying the rights and duties of both customers and developers,” Naidu added.
Within three months, developers must submit all ongoing projects, those that have not yet received completion certification, and new projects with the necessary regulatory authorities. States and UTs must establish their power within the rules and regulations.
However, only 13 states have been able to notify the rules here so far. Odisha, Gujarat, Uttar Pradesh, Madhya Pradesh, Bihar, and Maharashtra are one of the states that are listed. Last year, the housing ministry issued guidelines for the five Union Territories of Dadra and Nagar Haveli, Chandigarh, Andaman and Nicobar Islands, Lakshadweep, and Daman and Diu while the Urban Development Ministry issued rules for Delhi’s NCR.
The other states, as well as the Union Territories, must establish their own rules. As per a spokesperson for the HUPA Ministry, he has been raising the issue with all UTs and states to perform the Act, asking that the authorities verify that the provisions of the Law are followed within the specified period.
The ministry had already prepared and circulated the model regulations for UTs and states to approve, and it is now up to them to announce the rules. States that do not follow the rules will not only face public pressure, but the buyer or the people will be able to take the case to court, according to the spokesperson.
In response to reports that some states have diluted important laws, the spokesperson adds that such states have already been identified and have promised the ministry that any dilutions would be corrected.
Those states that have not yet informed of the rules will face public pressure, and people may even take the matter to court, he added. Around 76000 firms from all over the world are now involved in the Indian real estate market. Apart from the necessary registration of real estate agents and projects, one of the primary requirements of this act is the deposit of 70% of the funds collected from purchasers into a separate bank account to develop and complete the project.
It will ensure that projects are completed on time, and funds will be taken just for construction purposes. The law also sets fines on developers who cause project delays. As a result, all developers must post-project data on the regulator’s website and provide quarterly reports on building progress.
In the case of project delays created by the payment of monthly interest rates for bank loans for basement homes, the weight falls on developers rather than house buyers, according to Ramesh Nair, CEO and Country Head of real estate services provider JLL India.
RERA further states that any structural or workmanship faults found during five years of the promoter’s gain of ownership must be fixed by the organizers without charge within 30 days.
If the organization fails to do so, the person who has been hurt is entitled to compensation under RERA, according to Nair. Another feature of the bill is the ability for developers to be jailed for up to three years and agents and customers for up to a year for disobeying orders of regulatory authorities and appeal tribunals.
According to industry data, between 2011 and 2015, real estate projects ranging in size from 2,349 to 4,488 were launched per year, a total of 17,526 projects worth Rs 13.70 lakh crore in 27 cities, including 15 state capitals.
Every year, almost ten lakh people invest in the goal of owning a home.
The bill’s implementation, according to the real estate industry committees CREDAI and NAREDCO, will result in a paradigm shift in the way Indian real estate operations. Property demand is expected to rise, but supply may be affected in the near run.
“The real estate industry will face a paradigm change as a result of it. It will protect previous apartment owners. The RERA’s regulator should look for ways to support present projects and offer help to homebuyers “Rajeev Talwar, Chairman of NAREDCO, said.
RERA, according to CREDAI President Jaxay Shah, would boost transparency in the sector and improve both local and foreign investor trust.
He said, however, that there will be a “teething problem” in the implementation of this law. Asked about the impact on prices, Shah said: “Supply will enter this year, but demand will improve as buyers have increased confidence in investment in the real estate market”
Real estate prices remain stable, but rates could rise 10% over the next six months, he added
Need hassle-free RERA Services?
MeraLegal will assist you in obtaining all appropriate licenses and registrations of real estate projects and agents; please click on the following link to contact one of our consultants.