RERA : 7 things you should know about India’s first real-estate regulator
Real Estate Regulation Act or RERA as it is popularly referred to, is India’s first real estate-sector regulator and has come to force from today, May 1, 2016.
This act was passed by the parliament last year and time was given to formulate rules and regulations for its ground implementation.
Here are some key features of RERA:
- RERA is not a country-wide mandatory law. Centre can only recommend it to states. It is up to states to adopt or not to adopt RERA guidelines. Uttar Pradesh is one of six states who have already adopted this law.
- RERA is being described as a consumer focused law which has clearly drafted rules, rights and obligations for buyers and builders.
- All real-estate developers have been given time till 30 July to register under RERA. Under the provisions of this act, developers have to open a separate bank account for different projects and will have to deposit 70% of amount in this account. It must be ensured that this amount is specifically utilized for development and construction of the project.
- Consent of two-third of buyers will be necessary to be obtained by developers or promoters to make any changes in the structure such as making new towers or units.
- Delayed possession will enable buyers to seek compensation at an interest rate which should be 2% more than that of State bank lending rate.
- Any structural defects have to be rectified by the builders with-in five years of the possession.
- Developers can only sell on the basis of carpet area. There is also provision of three years jail term for errant developers.
