The Real Estate (Regulation and Development) Act, (RERA) 2016, is considered as one of the landmark legislations passed by the Govt. of India. It aims to address grievances of buyers and to bring transparency and accountability in country’s real estate sector. Real Estate (Regulation and Development) Act, 2016, shall come into force from May 1, 2017.
Following are the key features of RERA:
1) A developer can’t change the original floor plan without the written consent of the buyer. Nor can a developer increase the cost of his project.
2) If a developer fails to complete a project in time, he’ll have to pay interest on the amount paid by the buyer.
3) It’s mandatory for a developer to register all commercial and residential real estate projects where the land is over 500 square metres or includes eight apartments under-construction.
4) Every phase of apartment will be considered a standalone real estate project, and separate registration will have to be obtained for each project.
5) Each state will have to establish a State Real Estate Regulatory Authority. Buyers could approach this authority for redressal of their grievances.
6) The property will now be sold to buyers based on carpet area only. Any property sold on super built-up area will become illegal under the new law.
7) If a developer fails to register his property, he will attract a penalty up to 10% of the project cost and a repeated violation could land him in jail.
8) With this act in force, the developer will have to place 70% of the money collected from a buyer in a separate escrow account to meet the construction cost of the project. This will keep a check on developers who divert the buyer’s money to start a new project, rather than finishing the one for which money was collected and also ensure that the respective project is finished in time.
9) If a buyer detects any deficiency in the project, he can contact the developer for repairs in