RERA ushers in the much desired accountability, transparency and efficiency in the sector with the Act defining the rights and obligations of both the buyers and developers. This important legislation gained momentum under this Government and could see the light finally”.
The Real Estate Act 2017 has several significant provisions for the benefit of buyers and ensuring transparency in the sector. Some of these important provisions are:
Deposits: Builders are required to deposit 70 per cent of the funds collected from buyers in a separate bank account in case of new projects and 70 per cent of unused funds in case of ongoing projects.
Mandatory registration: All projects with plot size of minimum 500 sq.mt or eight apartments need to be registered with Regulatory Authorities
Penal interests in case of delay: Both developers and buyers have to pay the same penal interest of SBI’s Marginal Cost of Lending Rate plus 2% in case of delays.
Liability: Liability of developers for structural defects for five years.
Punishment: Imprisonment of up to three years for developers and up to one year in case of agents and buyers for violation of orders of Appellate Tribunals and Regulatory Authorities.
Here's a lowdown on what it is, and how it will change things for you
The Real Estate (Regulation and Development) Act came into force in Maharashtra on May 1.
The law will change your home-buying experience. Here are some key takeaways:
1 REGISTRATION OF ALL PROJECTS
The law has made it compulsory for developers of all residential and commercial projects to register their projects with the specially formed Maharashtra Real Estate Regulatory Authority (MahaRERA). This needs to be done within three months, that is by July 31st.
Till such time that a particular project is not registered, the developer cannot advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building.
Those who fail to register their properties as per the Act will be liable to a penalty, which may extend up to 10 per cent of the estimated cost of the project.The Act states that on continued violation, the developer or promoter of the project shall be punishable with imprisonment for a term, which may extend up to three years, or with a fine which may extend up to a further 10 per cent of the estimated cost of the project, or with both.
Apart from Registration, the promoters shall be required to provide quarterly updates on the status of the project to the authority.
2 DISCLOSURE AND TRANSPARENCY
It is now mandatory for the developer to give out all details of a project such as cost of land, development agreement, cost of construction, sanctioned plans, covered parking lots, and open spaces, among others. These details will be available to buyers online. The developer will also have to make a disclosure about the time frame in which the project will get completed, and submit phase-wise plans of development.
He will also have to update information about units and covered parking lots sold. While advertising his project, the developer will have to give out details about MahaRERA website on which all these details will be uploaded.
3 ALL FOR BUYERS
The Act ensures that a developer is unable to make any additions and alterations in the sanctioned plans, layout plans and specifications and the nature of fixtures, fittings and amenities etc. without the previous consent of at least two-thirds of the allottees, other than the promoter, who have agreed to take apartments in a building.
Under the new law, the developer will not be able to restrict sale on the basis of caste or community. Also, a buyer will only pay for carpet area.
Unlike the past, if a project gets delayed then the onus of paying the monthly interest on bank loans taken for under-construction flats will rest on developers. Under RERA, a separate account will be used to deposit 70% of the money collected for the project's construction, and developers can draw from it only for construction purposes.
In case a buyer or allottee finds any structural or workmanship defect within five years from date of being handed over the flat, the promoter will have to rectify it without any further charge. If he fails to do so, the aggrieved allottee is entitled to receive appropriate compensation under RERA. The promoter will also have to execute a registered conveyance deed in favour of the allottee within three months from date of issue of occupancy certificate, or when sixty per cent of the total number of purchasers in a building or a wing, have paid the full consideration to the promoter, whichever is earlier.
4 HOW TO COMPLAIN
In case a developer fails to deliver on his promise, buyers will have to approach the Authority. The complaints will be heard and disposed of in a time-bound manner. If the buyer is dissatisfied with the orders passed by the Authority, he can approach the Appellate Tribunal, and eventually the High Court.
5 BROKERS BEWARE
Brokers will have to regis ter with the Authority. If any agent fails to register, he shall be liable to pay a penalty of Rs.10,000 for every day during which such default continues, which may cumulatively extend up to five per cent of the cost of a plot, apartment or building, as the case may be, of the project, for which the sale or purchase has been facilitated.