The Real Estate (Regulation and Development) Act, 2016 has been introduced to protect the interests of home buyers, as well as to help boost investments in the Real Estate Industry. Real Estate Regulatory Authority (RERA) Bill was introduced by the UPA 2 government in 2013. In December 2015, the Union Cabinet of India had recommended 20 major amendments to the bill based on the recommendations of a Rajya Sabha committee that had examined the bill. The Bill had been referred to a select committee, which had given its report in July 2015. The bill was passed on 15 March 2016 and the Act came into force on 1 May 2016.
The said act has been established to protect the interests of the buyers, keeping in view the fact that the Home Buyers were facing harassment at the hands of the Builders and Real Estate Agents. There was no specific law to check the frauds and malafides of the builders and the real estate agents. People who used to invest in the projects constructed by the Builders were not given possession and as much as 90% of the projects were delayed. The quality was not the quality promised to the Buyers. Various other issues went unresolved. People were suffering and the Consumer Protection Act was not able to provide enough remedy to the Buyers/investors in the upcoming Real Estate Projects. Realizing this RERA was passed in 2016 to provide relief to the consumers.
MEASURES TAKEN TO PROTECT THE INTERESTS OF THE CONSUMERS:-
Firstly it has been made compulsory for all Real Estate agents to register themselves with the competent authority.
Further every project measuring more than 500 sq. meters or 8 apartments has to be compulsorily registered.
The Act further prohibits unaccounted money from being pumped into the Real Estate sector and as per the provisions of the Act, 70 percent of the money has to be deposited in bank accounts.
Further, Carpet Area is better defined in the Act and Builders will now have to quote prices based on carpet area and not on super built-up area.
It has been further provided by The Act that Separate Benches have to be set up to look into the issues regarding RERA and the benches are required to adjudicate the matters within 60 days.
Further, Appellate Authority has also been set up which is required to adjudicate the cases in 60 days as well.
Further, Penalty for non-payment of the dues by the Investors has been kept same as that the builder will pay on delay in project completion.
The Act further provides that in case of false assurances, the Buyer has the option to withdraw from the Project and it entitles to the refund of the cost invested.
The New Act bars the Builders/ Real Estate Agents from taking more than 10% as advance earnest money for the Project.
Further, if any defect is found in the construction within 5 years, it has to be rectified by the Builder at no extra cost.
RERA IS NOT APPLICABLE IN THE FOLLOWING CIRCUMSTANCES:-
It is only applicable on the Development of Property and not on Renting of the Property.
It covers all Residential and Commercial projects, including shops, Offices, and Buildings.
It is also not applicable where the area of construction is less than 500 sq. meters or where the number of apartments proposed to be constructed is less than 8.
It is also not applicable where the purpose is Renovation or repair or Re-development, advertising, selling or new allotment of any plot or Building.
The changes that this Act has brought, have Revolutionized the Real Estate Industry completely. Now, there’s a check and balance in the Real Estate industry.