With the new Real Estate Laws coming into play from the 1st of May 2017, there have been plenty of questions that are cropping among the buyer community. Here we’ll try and answer some of the most frequently asked questions about the Real Estate (Regulation and Development) Act, 2016:
1. Does the RERA Act, 2016 cover all Indian states?
Yes, this act is applicable to all Indian states – except for Jammu & Kashmir.
2. What are the objectives of RERA, 2016?
RERA was set up keeping the following objectives in mind:
- For Regulation of Real Estate Sector;
- To promote transparency and reduce red tape in the sale of real estate projects and plans
- To protect the consumers’ interests in the real estate sector
- To establish an adjudging authority that speeds up the dispute settlement process
- To create an Appellate Tribunal that hears appeals based on the the decisions, directions or orders of the RERA.
3. Under the rulings of the new Real Estate Regulatory Authority Act, who is the promoter?
All private and public bodies that develop real estate projects which are meant for sale fall under the ambit of this act. The act states that the person who constructs or causes to be constructed, a particular property shall be considered to be the promoters and be jointly responsible for their roles and responsibilities.
Initially, the bill was supposed to cover only residential projects. On further amendments, commercial projects including shops, offices and buildings, which are offered for sale are included.
4. Who else is under the regulatory body’s purview?
Real estate agents, web portals and all parties involved in the sale, purchase and registration of properties are covered by it.
5. What to do if the regulatory body doesn’t respond on an application filed by Developer for registration of a project?
Section 5 of the Act provides that the Regulatory Authority need to act on the application within 30 days of receiving it. It also provides that in case of the Authority failing to take a decision within the said period of 30 days, the project shall be deemed to have been be registered.
6. When can the promoter withdraw the buyer’s money deposited in a Scheduled Bank account?
The promoter can withdraw 70% of the buyer’s amount deposited to cover the cost of a particular project. However, such withdrawal shall be in proportion to the percentage of completion of the said project, and after it is certified by an engineer, an architect and a chartered accountant.
7. What is the rate of payment if the promoter or the allottee defaults?
The rate of interest payable by either the promoter or allottee shall be at the same percentage. The Government, however, shall specify the rate of interest under the RERA rules.
8. What are the promoters obliged to do in regards of insurance?
The promoter is required to obtain insurance of the projects towards title of the land and towards construction of the project and pay the premium and charges in respect of such insurance before transferring the insurance to the association.
9. Can civil courts and consumer forums entertain disputes under this Act?
Civil Courts are barred from entertaining any disputes and such cases which the Real Estate Authority or the Adjudicating officer is empowered under the Act. However, where any matter in relation to payment of compensation, pending before any Consumer Forum, State Commission or National Commission, may be withdrawn and be filed before the adjudicating officer under the Act.
10. In case of non-compliance with the guidelines by the Buyer, what are the penalties and punishments?
As per section 68, if the Buyer fails to comply with the orders of the (a) Authority: they shall be liable to pay penalty upto 5% (five percent) of the cost of the Property, (b) Appellate Tribunal: they shall be liable to a penalty which may cumulatively extend up to 10% (ten percent) of the cost of the property or with imprisonment for a term which may extend up to one year or with both.