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END OF WOES – SOMETHING TO CHEER FOR PROSPECTIVE APPARTMENT AND FLAT BUYERS

A brief on Real Estate (Regulation and Development) Act, 2016

Finally, the apartment, flat and villa buyers has a reason to cheer and relax a bit with the enactment of a new law, albeit long overdue. After a lot of opposition and debates, the Indian Parliament had passed the “Real Estate (Regulation and Development) Act, 2016 on May 1st 2016 aiming to protect the rights of an ordinary home buyer, who has been running from pillar to post and frequently knocking the door of Consumer Courts and at times even invoking the Competition Commission for protection of their rights against unscrupulous builders and real estate developers. The Act intents to protect the interests of purchasers by promoting transparency, accountability and efficiency in the construction and execution of real estate projects undertaken by promoters, developers and real estate moguls.

For the past few years, real estate sector had been on the raise especially with demand for dwelling places coupled with the keen interest of the NRIs to invest in their homeland. Taking advantage of this boom many private players have entered this sector complicating the scenario by unfair and one sided contracts with customers who are left with no other option but to sign on dotted lines with various unilateral clauses. Thereby, 99% of the apartment and villa projects have not seen the door of accomplishment. This unfair play on the part of unscrupulous promoters and builders have broken the confidence of NRI’s and foreign investors in the real estate sector. Unfortunately, once the purchasers invest their life savings in the housing sector, they are completely left in dark regarding the progress of their projects, and they cannot even enforce accountability against erring developers in the absence of an effective mechanism. It is in this context the “Real Estate (Regulation and Development) Act, 2016 gears in attention.


OBJECTIVE

The primary objective of the Act is to regulate and promote the real estate sector and to restore the confidence of consumers in the real estate sector by introducing transparency and accountability therein. It offers a single window system of clearance of all real estate projects.

The Real Estate (Regulation and Development) Act, 2016 aims to regulate and promote the real estate sector by regulating the transactions between buyers and promoters of residential as well as commercial projects. It also has provisions for establishing a regulatory authority at state level called "Real Estate Regulatory Authority" (RERA) for monitoring the real estate sector and adjudicating disputes relating to Real Estate Projects. The main aim of the Act is to protect buyers and help investment in real estate sector and to boost up domestic and foreign investments in the sector.


APPLICATION OF THE ACT

The Act applies only to new projects and under construction projects which had not received the completion certificate prior to May 1, 2016. Furthermore, the new projects with an area up to 500 square meter or those having only up to 8 apartments and existing projects undergoing renovation provided there is no new allotments, are exempted from the purview of mandatory registration as per the Act.

The Real Estate (Regulation and Development) Act, 2016 aims to regulate and promote the real estate sector by regulating the transactions between buyers and promoters of residential as well as commercial projects. It also has provisions for establishing a regulatory authority at state level called "Real Estate Regulatory Authority" (RERA) for monitoring the real estate sector and adjudicating disputes relating to Real Estate Projects. The main aim of the Act is to protect buyers and help investment in real estate sector and to boost up domestic and foreign investments in the sector.


SALIENT FEATURES OF THE ACT


PENALITIES

The Real Estate (Regulation and Development) Act, 2016 is revolutionary step towards regulating the highly unregulated real estate sector and bringing more transparency to real estate transactions. It is an initiative to protect the interest of consumers, to promote fair play in real estate transactions and to ensure timely execution of projects. With a clear intention of protecting the interests of buyers/allottees, the Act helps the consumers to safeguard themselves from any foul play or exploitation by promoters. The new legislation is expected to be a game changer in the real estate sector. Finally, the ordinary home buyer has something to cheer on....

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