Government to protect the home buyers from developers who fail to deliver and give more power to buyers introduced Real estate bill which was passed in Parliament in March and came into effect on May 1st 2016.
All the states have to establish Real Estate Regulatory Authority and the Real Estate Appellate Tribunal by April 30th, 2017- to kick-start the implementation of the Act.
Important features of Real Estate bill:
• Projects by builders will now have to be registered with regulatory authority
• Bill mandates the developer to disclose all the details of the project.
• Registration will require builders to set aside 70% of the funds collected from buyers
• Violation of contract agreement will invite a penalty of upto 5% of project cost
• Builders cannot change the project plan midway without the buyers’ consent
• Developers can sell units only on carpet area, the net usable floor area of an apartment.
• Every project measuring more than 500sqm or more than 8 apartments will have to be registered with the RERA.
• All new projects, and under-construction projects which had not received a completion certificate prior to May 1, 2016, will be covered under the Act.
The Bill largely seeks to protect the interest of the allottees or the purchasers by promoting transparency, accountability and efficiency in the construction and execution of real estate projects by promoters.
It indeed ushered in the much needed reform in the entire sector.