Indian Government approved changes to RERA to regulate the country’s property market which is notorious for black money and delayed possessions. The Real Estate Regulation and Development Act Bill, 2016 is aimed to protect the interest of consumers from errant developers and ensure timely execution of projects which in turn will boost the confidence of both Investors & Buyers.
Here are 10 ways how the Bill will help property buyers:
1) Each state will get a real estate regulator, which will settle disputes and impose compensation. All housing and commercial projects will have to be compulsorily registered with the regulator so that buyers can have access to genuine projects. Ongoing projects that have not received completion certificates will also be covered.
2) Developers cannot advertise or launch projects without prior registration with the real estate authority.
3) Sale of property on the basis of super area (area in which a flat is spread plus common area such as lobby) will be prohibited. Developers will have to advertise carpet area, which is the area enclosed within the walls of a flat, for sale.
4) Developers will have to disclose layout plans and submit clearances with the regulator. They will also have to name the contractor, architect, structural engineer, etc. associated with the project. This will ensure transparency about property projects.
5) To ensure projects are completed on time, promoters will have to deposit 50 per cent of the amounts realized from buyers in a separate bank account within 15 days.
6) Developers will need the consent of two-third buyers to alter plans, structural designs and specifications of the building. They will have the responsibility to rectify structural defects and refund money in cases of default.
7) Brokers, who intend to sell flats and plots in a project, will also have to get registered with the real estate regulator. They will be punished for non-compliance.
8) Buyers can claim refund with interest and compensation if promoters fail to deliver projects in time.
9) If rules are violated, projects will be de-registered and penalties will be imposed on the developer. Noncompliance will attract fine up to 10 per cent of project cost. Misinformation will attract fine of 5 per cent of project cost.
10) Builders often demand part payment in cash, making many ordinary buyers party to corruption. The Bill will help curb undeclared “black money” in property markets that costs the government billions of rupees in lost taxable income.