Real estate Regulatory Act..
Now, the real estate sector has got its own regulator from May 1, 2017, the date when the Real Estate (Regulation and Development) Act, 2016 (RERA) Real estate Regulatory Act,2016, means RERA 2016 became effective in the entire country. Each state and UT will have its own Regulatory Authority (RA) which will frame regulations and rules according to the RERA.
Let’s have a look at the apartments and it’s concerns,
The delay in possession of their homes has been the biggest concern for the buyers of the real estate properties. For many of the homebuyers, across locations and with almost the builders, the delay has extended to almost six years or more now, with no possession in sight. In the absence of a regulator and with no rules in place, the builder and buyer battle appeared one-sided
There are 6 important rules in RERA that will stop builders from delaying delivery of your dream home
And stick to deadlines rather than making a default.
- Written affidavit:The promoter’s promise will now have a legal standing to it. Along with all the required documents, the promoter has to give a declaration, supported by an affidavit stating the time period within which the project or the specific phase will get completed.
- Possession date will be sacrosanct:Further, the ‘agreement of sale’ will have to specifically carry the date of possession and the rate of interest in the case of any default.
- Clear title of the land:At times, the land on which the project is supposed to be built gets involved in disputes leading to a delay in construction and delivery. A written affidavit has to be provided by the promoter that the legal title to the land on which the development is proposed has legally valid documents with authentication of such title if such land is owned by another person.
- Free from encumbrances:Often, it has been seen that several projects get delayed due to encumbrances which can restrict the promoter’s ability to transfer title to the property. A written affidavit has to be provided by the promoter that the land is free from all encumbrances.
- Maintaining separate account:Diversion has been the most common concern across the industry. Now, as per RERA, 70 percent of the amount realised for the real estate project from the buyers, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose.
The withdrawals from the account will be according to the extent of the work completed after it is certified by an engineer, an architect and a chartered accountant and will be subject to an audit every six-month. Such measures to a large extent are expected to minimise the diversion of funds, if not fully.
- Making it an offence: In case of not adhering to the rules, the builder stands not only to lose the registration of the project too but may also be punishable by imprisonment for a term which may extend up to three years or with fine which may extend up to a further ten per cent of the estimated cost of the real estate project, or both. Some states have, however, compounded the offence to avoid imprisonment of the developers.
“The biggest deterrent to delay in delivery is the clause that allows for compensation to the flat purchaser in the event of delay in delivery. In addition going beyond the committed date of delivery as mentioned in the registration of the project entails going back to the authority and answering questions justifying the delay, says Gera.
Here, We should Remember one more important thing that time period could differ amongst builders. “For new projects, the committed date of delivery is the choice of the developer and so the customers will need to take a decision if they find that the committed date of delivery is too distant they can opt to not purchase the apartment,” says Rohit Gera, Managing Director, Gera Developments.
That’s up to the customers.
This information brought to you by economic times