Real Estate Regulatory Bill

Real Estate Regulatory Bill

Why Is The Real Estate Bill 2016 Needed?

  • Projects being endlessly delayed.
  • Possession of property not given on time.
  • Builders not compensating for delayed possession.
  • Penalties on buyers for delayed payments.
  • Land Hoarding
  • Buyers avoid getting into legal battles with developers.
  • Arbitrary changes in layout plans

Impact Of The Bill On The Real Estate Industry

  • Ensures efficiency and transparency in all property related transactions.
  • Improves accountability of the developers and protects consumer interest.
  • Promotes fair-play and timely execution of the projects.
  • Helps in differentiating a good developer from a bad one.
  • Single window clearance will aid faster execution of the projects.
  • Boosts positive sentiments among the buyers and will in turn bring more FDI.
  • Timely completion will result in increase in supply of homes and help bring down prices.
  • Overall boost to the economy as housing sector has many backward and forward linkages with other industries.
    • Backward Linkages: steel, cement and other building materials
    • Forward Linkages: furniture and furnishings, electrical and electronics, interior decoration.
  • Creation of more employment opportunities.
  • It will help achieve government’s ambitious plan of ‘Housing for All by 2020’.
  • It will help curb black money as real estate sector constitutes about 11% of GDP and is particularly vulnerable to black money through underreporting of transaction prices while paying taxes.

Key Features Of The Bill
General Points of the bill

  • Regulation of both commercial and residential real estate projects.
  • Setting up of  Real Estate Regulatory Authority (RERA)
  • Establishment of state-level RERAs.
  • Registration of real estate projects and real estate agents mandatory.

Rules for Builders/Promoters

  • All commercial and residential real estate projects with land over 500 square metres,
  • or have 8 apartments
  • Must be registered to RERA.
  • Builders must maintain 70% of the amount collected for the project in a separate escrow account that can be used for the construction of the said project.
  • Builders need to specify a timeframe of the project, or else they have to pay penalties.
  • Builders to be responsible for fixing structural defects for 5 years after transferring the property to a buyer.
  • No changing plans and design without consent of 2/3 of the consumers.

Dispute Settlements

  • Establishment of fast track dispute resolution mechanisms via adjudicating officers and Appellate Tribunal.
  • Bars civil courts from taking up real estate matters.
  • Consumer courts are allowed to hear such matters.

Fast-tracking

  • Allow RERAs to direct state govt. to establish a single window system for providing clearances for projects.
  • A time limit should be specified for state and local authorities to issue completion certificates.

Penalties


Failure of Promoter to

Penalty

register his property

Penalty up to 10% of the project cost

dodges order issued by the RERA

  • Imprisonment for up to 3 years,
  • and/or
  • an additional fine of 10% of the estimated project cost

false information

Penalty up to 5% of the estimated project cost

violates any other provision of the act

Penalty up to 5% of the estimated project cost



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