The Real Estate (Regulation and Development) Act – RERA, which comes into effect from Monday gives teeth to buyers of residential properties and is likely to bring in the much-needed transparency in the real estate sector.
As per the act, staring May 1, real estate developers will not be allowed to take advances and booking amounts from customers in yet to be launched projects till they are registered with RERA.
The Real Estate (Regulation and Development) Bill, 2016 was passed by Parliament in March last year and all the 92 sections of the Act come into effect from May 1.
“The Real Estate Act coming into force after a nine-year wait marks the beginning of a new era,” housing and urban poverty alleviation minister M Venkaiah Naidu said.
The minister said the law will make “buyer the king”, while developers will also benefit from the increased buyers’ confidence in the regulated environment.
“The act ushers in the much-desired accountability, transparency and efficiency in the sector, defining the rights and obligations of both the buyers and developers,” Naidu said.
The Act allows the developer to have some say as well. In case a customer makes three consecutive defaults in payments, the developer will have to give three weeks’ notice to the customer, and if no response is received, the developer can cancel the agreement.
As the developers settle with the new regulations and system of conducting their businesses, the sales and supply of new units are likely to remain subdued over the next 3-6 months.
The Real Estate (Regulation and Development) Act promises to bring in the much-desired transparency, accountability and efficiency in real estate sector and the government has described the implementation of the Act as the beginning of an era where the consumer is king.
The government has brought in the legislation to protect home buyers and encourage genuine private players. The Real Estate (Regulation and Development) Bill, 2016 was passed by Parliament in March 2016 and all the 92 sections of the Act come into effect from May 1.
Only 13 states and Union Territories have so far notified rules under the Act which, Union Minister Venkaiah Naidu said, will enable only regulation of the sector and not “strangulation”.
The states that have notified the rules include Uttar Pradesh, Gujarat, Odisha, Andhra Pradesh, Maharashtra, Madhya Pradesh and Bihar.