NEW REAL ESTATE ACT
The new real estate act or the Real Estate (Regulation and development) Act or RERA mainly protects the home buyers and also helps boost investment and a fair competition in the sector. Currently, the rules based on the act are being notified by the states. The act applies to both commercial and the residential sector.
The difference with the earlier scenario
With the new act, all commercial and residential projects where the land is greater than 500 square metres, or 8 apartments, it is mandatory to get registered with RERA. An ongoing project, which has not yet received a completion certificate, registration has to be done within 3months of the implementation of the act.
Registration requires the applicants to fill the essential details of their projects in the RERA website. They in turn are given a registration number, login ID and password which have to be cited by the agent each time he sells a property in a state, so that, a record remains.
Advantages for buyers
According to the new act, 70% of the money has to be deposited in bank accounts through cheque. A Real Estate Regulatory Authority and Appellate Tribunal will ensure the timely handover of the projects to the buyers. It will also adjudicate dispute cases within a 60days period instead of the earlier provision of 90days.
The new act increases transparency in the process. It prevents generation of black money to a large extent as most of the payment is done through bank accounts. It also prevents selling of homes at a preliminary stage. Therefore, the builders have to mainly depend upon external financing from financial institutions. This will build a pressure on them to handover the houses faster. Moreover, there will be a timely solving of the complaints and disputes. A project can be launched only after proper registration and all approvals.
The State governments under the Real Estate (Regulation and development) Act are on their way to frame rules accordingly. For the union territories, the Ministry of Housing and Urban Population is on its way to bring out the notifications. The act is a great step for promoting a fair process of selling and buying homes.