The Real Estate Regulator Bill has been passed by the Rajya Sabha, intended to regulate the real estate sector and to bring in clarity for both buyers and developers.
Below are 10 things one needs to know about this bill, which will be a key reform measure in the sector of real estate.
- This law establishes the State Real Estate Regulatory Authority for a particular state as the government body that is to be approached for the redressal of grievances against any builder. Once every state ratifies this Act and establishes a state authority on the lines set up in the law, this will happen.
- It vests authority on the real estate regulator: to govern both residential and commercial real estate transactions.
- As per this law, the developer is obliged to park 70% of the project funds in a dedicated bank account. This will prevent the developers from investing in multiple new projects with the proceeds of the booking money for one project.
- It makes it mandatory for developers to post all information regarding the project, such as project plan, layout, government approvals, land title status, sub-contractors to the project, the schedule for completion with the State Real Estate Regulatory Authority (RERA) and then in effect, pass this information on to the consumers.
- The current practice of selling real estate on the basis of the ambiguous super built-up area will come to a stop as this law makes it illegal to do so. The Carpet area has been clearly defined in the law.
- This law ensures that any delay in project completion will make the developer liable to pay the same interest as the EMI that is being paid by the consumer to the bank, back to the consumer.
- The maximum jail term for a real estate developer who violates the order of the appellate tribunal of the RERA is three years, with or without a fine.
- This law permits the buyer to contact the developer in writing within one year of taking possession of the property, to demand after sales service if any deficiency in the project is noticed.
- The real estate developer cannot make any changes to the plan that had been sold without the buyer’s written consent.
- Every project measuring more than 500 square meters or more than 8 apartments will have to be registered with the RERA.