As the changes occur in the economy there need to be regulators in every department to see whether no crime or fraud is committed. While, there is some present currently such as TRAI (Telecom Regulatory Authority of India), RBI (Reserve Bank of India), SEBI (Securities and Exchange Board of India) for their respective departments to care for. There hasn’t been a single authority to look after the real-estate sector where too some activities are conducted where the buyer/ the consumer has to pay the price if the deal goes awry. Well, this is not the scenario anymore. Last year, in the month of March, an act was passed out to establish authority for the real-estate sector. The act was named as Real Estate Regulatory Authority Act, 2016 (RERA). It came into force from this May i.e. 1st May 2017. The act was passed in the manner so that justice for the consumer and proper practices should be maintained in the real-estate sector by the developers. Wherein, every state and union territory will maintain a separate body for the real-estate sector where the developers have to report to them. Well, here is everything you need to know about it.
- Real Estate Prices
After the RERA came into action the prices of real estate dropped down as it was expected. Huge unsold inventory, lack of demand and demonetization has led the builders and the developers bringing the rate down and provide discounts and freebies to the customers. Well, before RERA, the risk of the delays, quality, title and all types of changes the cost was suffered by the customer. But, now these will be suffered by the developer and a premium would be demanded by the buyer ensuring the transfer of risk to the developer. While the developer cannot absorb these funds but can transfer them back to the customer in the form of price rise.
- Holding Delivery
One of the major hurdles faced by the buyers were the projects constructed in the year 2010-2013 had delayed delivery due to the allocation of the funds into new projects. But, after the implementation of the RERA act, the depositors have to maintain a ‘separate account’ wherein the money deposited from buyers will be utilised in construction. Also, the developers have to furnish additional information regarding the ongoing project besides the deposit.
- Current Projects
Developers have to make public the original sanctioned plans, changes, theamount deposited, allocation of money, thetimeline for completion and more certified by an engineer/architect/ practising CA for its current projects. Each regulatory will register and regulate these projects and the agents connected in each chain. Also, a website would be handled by the public so to have a track on the registered projects with all the information available regarding the registered projects under the RERA inclusive of the promoters and the agents attached to the respective projects.
Also, a matter of concern for RERA is the quality of construction. Protection can be availed by the people for 5 years after construction by RERA if there is some flaw in the project due to quality. The developer will be noticed upon it and has to rectify the same without taking any further charges in 30 days of the notice. No promoter can advertise or sell any property without the registration of property with the RERA. Each advertisement needs to be carried with the RERA registration number.
- Registration of Projects
After the Real Estate Regulator Authority Act, 2016 has come into action; the builders should make sure that they register the project with the regulatory authority. The builders would be made to register with the regulatory authority of the state including all the furnishing information, the financial statements, a copy of the legal deed and other things to be included. The registration number will be provided project-wise to the builder. If a builder fails to register he can be charged heavy penalties.
- Compensation of Holding Delivery
If the promoter fails to complete the project in the desired timeline and unable to deliver the project to the buyer in the desired timeline then the developer will have to return the amount to the buyer along with the interest rate of the delayed period as mentioned in the agreement of the deal. In the second case, where the buyer decides to the stay with the project until the time it is completed, the buyer will be paid interest by the promoter until the end of the project. If a developer does so he will be charged with penalties or on a further note cancellation of the registration.
- Online Information
Once the registration is done with the regulatory authority of the state, the builder will be given a Login-ID and password to create a page on the regulatory authority’s website and upload the project information concerned to which permission has been authorised to the developer. The developer will have to quarterly update the status of the authorised project on the website of the regulatory authority of the state. If a developer fails to update about the progress of the construction on the quarterly basis then he will be charged on the loan taken by the bank and not the buyer.
- Booking Amount
Well, most of the builders used to ask for 10 percent of the property as the advance payment for the booking of the same property. Now, after the RERA Act has come into the picture, the promoter cannot accept more than 10 percent of the advance money paid by the buyer at the time of the booking inclusive of the application fee or any other fee demanded by the promoter. It is mandatory for the promoter to first enter into the registered agreement of sale by RERA.
Thus, the consumer will be able to check the information about the new project registered by the developer along with the promoter and agents involved in it. Also, there will be a standardised procedure to overcome the consumer disputes in a swift and smooth manner so that consumer’s interest is not harmed. The act will ensure accountability; transparency and efficiency are maintained in the real estate sector.