Government Reports RERA Rules for Union Territories

Continuing its efforts to establish a robust and fully transparent real estate regulatory body throughout the country, the union government has published a notification stating the final rules as part of the Real Estate (Regulation and Development) Act, 2016 (RERA). With the introduction of new rules in the RERA Act, the government aims to introduce more transparency and accountability in the Indian realty sector subsequently helping in the completion of stalled construction projects.
 
The new rules which are now part of the Real Estate (Regulation and Development) Act, have been put together by the Ministry of Housing and Urban Poverty Alleviation (HUPA). The RERA Act will be implemented in the country’s five union territories, namely, Chandigarh, Andaman and Nicobar islands, Dadra and Nagar Haveli, Daman and Diu and Lakshadweep. Reportedly, the union ministry of Urban Development is working on the RERA Act for its implementation in Delhi and NCR. The central government has informed all other states with legislatures to come up with their own version of Real Estate (Regulation and Development) Act or implement the same rules as constructed by HUPA.
 
A quick peek at Real Estate (Regulation and Development) Act, 2016 (RERA)
With an aim to resolve the major issue of delays in possessions of properties faced by lakhs of home buyers in the country, the central government back in March came up with a bill in the Indian parliament to set up an independent real estate regulatory body under the RERA Act. The said regulatory body would work as an authority to address consumer complaints against real estate developers as well as promoters.
 
As per the rules notified by the government under the RERA Act, developers will have to cough up penalties and compensate the allottees in case of delay in delivery of a project. The monetary compensation to be paid to the allottees will be charged on the basis of the interest rate of SBI’s highest marginal cost of lending rate plus 2 percent within 45 days of it becoming due.
 
The RERA Act ensures transparency in the real estate industry. Property builders as well promoters will now have to make public several key documents of the concerned project. These documents include originally sanctioned plan of the under construction project, the amount collected from the allottees, schedule, and timeline of the project, date of delivery of the project, the total number of parking slots in the project etc. Moreover, real estate builders will now have to deposit 70 percent of the total amount collected for the under construction projects in a separate bank account within 2 months of applying for registration of project.
 
As part of its notification on rules in the Real Estate (Regulation and Development) Act, 2016, the government has mentioned that the realty promoters and developers have been allowed not to disclose their income tax returns in order to boost confidentiality. Moreover, registration charges for realty projects have been halved.
 
In order to promote transparency and accountability in the real estate sector, the RERA act ensures that the developers publish all the information related to the projects on their respective websites. Information such as project prospectus, floor plans, landscape areas, project approvals, the number of parking slots etc. should be made available to the home buyers.