One of the most globally recognized sector i.e. the
real estate sector ranks 3rd among the 14 major sectors in the
country in terms of direct, indirect and induced effects in all sectors of the
economy. The Real estate sector is an important pillar of the economy
fulfilling the demand for infrastructure in the country. While this sector has
grown significantly in recent years, it has been largely unregulated, with
absence of professionalism, standardization and lack of adequate consumer
protection. Though the Consumer Protection Act, 1986 is available as a forum to
the buyers in the real estate market, the recourse is only curative and not
adequate to address all the concerns of buyers and promoters in the sector. The
real estate industry had been crying out to get regulated since more than past
one decade.
In view of the above, the Real Estate (Regulation
and Development) Act, 2016 (RERA) was enacted by MODI Government with the
objective of protecting the interests of buyers and simultaneously boosting the
investment in the real estate industry. It further aims to ensure transparency,
fair-play and reduce frauds & delays in the real estate sector. The Act
also imposes certain responsibilities on builder/promoter and homebuyers/allottees,
introducing professionalism and standardization in the sector. Apart from the
above, the RERA has the following features:
a)
To establish the Real Estate Regulatory Authority
for regulation and promotion of the real estate sector as a whole.
b)
To ensure transparency in sale of plot, apartment, villa,
shops, etc as the case may be.
c)
To establish an adjudicating mechanism for speedy
dispute redressal and also to
establish
the Appellate Tribunal to hear appeals from the decisions, directions
or orders
of the RERA
d)
Establishes state level regulatory authorities
called Real Estate Regulatory
Authorities
(RERAs)
e)
Promoters cannot book or offer units in the
projects without registering
the
project with RERA.
f)
Registration of the projects covering lands
having area more than 500 sq. ft. or where the number of apartments is eight or
more is mandatory. The promoter is required to upload the lot of details
of the project on the website of the RERA to be examined by public at large.
g)
70% of Amount collected from homebuyers for a
project must be maintained in a separate bank account (escrow account) and must
only be used for construction of that project.
h)
Right to Legal Representation on behalf of Client
by Chartered accountants, Company
Secretaries or cost accountants or legal practitioners
i)
Imposes stringent penalty on promoter, real estate
agent and also prescribes
j)
Imprisonment for certain defaults so now builder
cannot think of cheating to the homebuyers.
k)
Uniformity in definitions for important components
of real estate, like, “carpet area”, common areas” etc.
l)
Fast-track dispute resolution mechanism
m) Timely
completion of the projects by the builders
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