NEW DELHI: Ending the nine year long wait, regulation of real estate sector involving over 76,000 companies across the county became a reality from May 1 as the Real Estate (Regulation & Development) Act,2016 came into force.
With all the 92 Sections of the Act coming into effect from May 1, developers shall get all the ongoing projects that have not received completion certificate and the new projects registered with Regulatory Authorities within three months. This enables the buyers to enforce their rights and seek redressal of grievances after such registration.
Union Urban Poverty Alleviation and Housing Minister M.Venkaiah Naidu, in his tweets, said; ÂReal Estate Act coming into force after a nine year wait marks the beginning of a new era making buyer the King while developers benefit from the confidence of the King in the regulated environment. Prime Minister Narendra ModiÂs personal interest in the matter made the Act a reality now. The Act ushers in the much desired accountability, transparency and efficiency in the sector with the Act defining the rights and obligations of both the buyers and developers. This important legislation gained momentum under this Government and could see the light finallyÂ.
Some of the major provisions of the Act, besides mandatory registration of projects and Real Estate Agents include:
1.Depositing 70% of the funds collected from buyers in a separate bank account in case of new projects and 70% of unused funds in case of ongoing projects;
2. Projects with plot size of minimum 500 sq.mt or 8 apartments shall be registered with Regulatory Authorities;
3.Both developers and buyers to pay the same penal interest of SBIÂs Marginal Cost of Lending Rate plus 2% in case of delays;
4.Liability of developers for structural defects for five years; and
5. Imprisonment of up to three years for developers and up to one year in case of agents and buyers for violation of orders of Appellate Tribunals and Regulatory Authorities.
Several and substantial changes were made in the Real Estate Bill that was first introduced in the Rajya Sabha in 2013 to make the final Act more effective towards promotion of the sector.
At the time of passing of the Bill in Rajya Sabha in March 2016, there were 76,044 companies operating in the real estate sector, including 17,431 in Delhi, 17,010 in West Bengal, 11,160 in Maharashtra, 7,136 in Uttar Pradesh, 3,054 in Rajasthan, 3,004 in Tamil Nadu, 2,261 in Karnataka, 2,211 in Telangana, 2,121 in Haryana, 1,956 in Madhya Pradesh, 1,270 in Kerala, 1,202 in Punjab and I,006 in Odisha.
As per industry information, between 2011 and 2015, real estate projects in the range of 2,349 to 4,488 were launched every year amounting to a total of 17,526 projects with a total investment of Rs.13.70 lakh crore in 27 cities including 15 State capitals. About ten lakh buyers invest every year with the dream of owning a house.