Discuss how the Real Estate (Regulation and Development) Act, 2016 (RERA) provisions promote the transparency, accountability and protection of home buyer interests.
Real estate in India had been for long an unregulated space where the cheated home buyers had little legal recourse except long battles in the court. Real Estate (Regulation and development) Act 2016 was enacted to protect the home buyers. It provisions are:
- Each state and union territory to its own Real estate regulatory authority within one of year of act coming into force.
- Promoters will have to register their project with the authority before booking, selling or offering apartments for sale. It applies to all the projects in which land exceeds 500sq km or has more than eight apartments. Real estate agent will also be registered which would reduce fraud. Registered projects would be put on website for public access.
- Under the act, house is to be sold based on carpet area thus providing clear idea to the consumers.
- A minimum 70% of the money from investors and buyers has to be maintained in a separate escrow account to be used only for construction and land purchase, this would ensure that money is not diverted to start another project.
- Developers will have to keep the buyers informed about the development.
- In recent years the quality of construction has deteriorated thus act provides that any complaint regarding construction quality within 5 years from date of possession has to be rectified by builders/developer with 30 days.
- In case of default by developer within deadline the developer will have to return the amount along with pre agreed rate of interest. This will help solve the problem of delay, major issue with developers.
- Developers cannot ask for more than 10% of property cost as advance.
- The regulator will have the power to fine and imprison errant builders based on a case by case basis.
Effective implementation of these provisions would certainly promote transparency and accountability among developers.
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