REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016
The SMART ACT- SALIENT FEATURES
Uniform Applicability: The provisions of RERA extend to whole of India (except Jammu and Kashmir) and are applicable to commercial as well as residential real estate projects.
Registration – The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 square metres, or eight apartments, to register with the Real Estate Regulatory Authority (RERA). On-going projects that have not received completion certificate on the date of commencement of the Act, will have to seek registration within 3 months. Application for registration must be either approved or rejected within a period of 30 days from the date of application by the RERA.
After successful registration, the promoter of the project will be provided with a registration number; a login id and password. The promoter shall create his web page on the website of the Regulatory Authority and enter all details of the proposed project.
For failure to register, a penalty of up to 10 percent of the project cost or three years’ imprisonment may be imposed.
Real Estate Agents– Real estate agents facilitating sale or purchase of properties must take prior registration from RERA and will receive a single registration number for each State or Union Territory. The agent must quote this registration number in every sale facilitated by him.
Austere Measure to Prevent Corruption – The Act prohibits unaccounted money from being pumped into the sector by the making it mandatory to deposit 70% of the amount realized from the allottees in a separate account to be maintained in a schedule bank, through cheques. The amount is meant to cover the cost of construction and the land cost and shall be used only for the concerned project.
Protection of Consumers – Consumers are benefited by a major provision wherein builders will have to quote price based on carpet area and not super built-up area. Carpet area has been clearly defined to include usable spaces like kitchen and toilets.
The advertisement or prospectus issued or published by the promoter should prominently mention the website address of the Regulatory Authority, where all details of the registered project have been entered, including the registration number.
If any person who makes an advance or a deposit based on information in the notice, advertisement or prospectus sustains a loss or damage due to incorrect or falsified information, he shall be compensated by the promoter as provided in the Act. If such a person intends to withdraw from the proposed project his entire investment along with interest should be returned to him as provided in the Act.
A promoter shall not accept a sum more than 10% percent of the cost of the apartment, plot, or building as an advance payment or an application fee without first entering into a written agreement of sale should be registered under any law for the time period in force.
The promoter cannot make any addition or alteration in the approved and sanctioned plans, structural designs, specifications and amenities of the apartment, plot or building without prior consent of the allottee.
In case any defect in structure, quality or services or other obligation of the promoter, is brought to the notice of the promoter by the allottee within five years from years from the date of possession, the promoter shall rectify such defect without any further charge, within thirty days. In case of default of the promoter during this time period, the aggrieved allottee is entitled to receive appropriate compensation as provided in the Act.
The promoter shall not transfer or assign his majority rights and liabilities in respect of a project to a third party without obtaining prior written approval of the Regulatory Authority.
In case the promoter is unable to hand over possession of the apartment, plot or building to the allottee due to any reason, the promoter is liable to return the amount received by him from the allottee with interest and compensation as provided under the Act.
RERA, 2016 provides for establishment of state-level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover.
RERA, 2016 provides for Appellate Tribunals to adjudicate cases in 60 days and requires Regulatory Authorities to dispose of complaints in 60 days.