Discuss the key provisions of Real Estate (Regulation & Development) Act, 2016 (RERA) aimed at protection of consumers and discouraging the speculators. Do you agree with the view that RERA may not bring positive results, especially due to the way the States have adopted the Act? Discuss.
The key provisions of the Real Estate (Regulation and Development) Act, 2016 aimed at protection of the consumers and discouraging the speculators are as follows:
- Provision of state level regulatory authorities which would ensure registration and all possible details of the projects on its website. It would ensure that buyers, sellers and agents comply with the rules, regulations and obligations.
- Provisions of Appellate Tribunals (REAT) against the decisions of the RERA, which have been mandated to adjudicate and dispose the cases within 60 days.
- Without registration in RERA, the promoters and builders can’t sell the projects.
- The promoters are required to deposit 70% of the funds in the escrow to be used only for construction; and they have been mandated to not to get more than 10% of the cost without written agreement. This is a noble provision to discourage the speculators.
- Buyers are advised to make payments as per the agreement.
The law has provided penalties for failure to register the property or selling without registrations. Since Land comes under the state list, some states have enacted their own laws to regulate the real estate sector. Real challenge would be in the implementation front and would depend upon how the states implement this legislation. However, as a sign of hope, 18 states and Union territories have notified the new rules. Still, there are huge gaps in the understanding and the requirements under the new Act. In most of the states, real estate agents failed to understand how to register themselves with the new regulatory body and there is lack of clarity on how the new rules will be executed.