The Real Estate Act which aims to protect the interests of homebuyers by ensuring transparency has come into effect. The Ministry of Housing and Urban Poverty Alleviation (HUPA) has asked all the states and Union Territories to implement the Act with letter and spirit. Since land is a state subject, real estate sector comes within the ambit of the state governments.
The Real Estate (Regulation and Development) Bill, 2016 was passed by Parliament in March last year. Partially, the act came into force on 1 May last year with 59 of 92 notified sections of the act coming into force. The remaining provisions have come into the force now. Already the act has been notified by 13 states and Union Territories including Andhra Pradesh, Uttar Pradesh, Bihar, Gujarat, Delhi, Daman and Diu.
Buyers and developers of real estate property can seek relief by approaching Real Estate Regulatory Authorities against violation of the contractual obligations and other provisions of the Act.
The act provides for the mandatory registration of projects and real estate agents.
The act mandates depositing 70% of the funds collected from buyers in a separate bank account for construction of the project. The funds could be withdrawn only for construction purposes.
The act prescribes penalty on developers if the project is delayed. The project developers are required to disclose the project details on the website of the regulator and need to provide quarterly updates on construction progress.
Under the act, the Regulatory authorities are required dispose of complaints in 60 days and Appellate Tribunals will be required to adjudicate cases in 60 days.
The act will ensure transparency and accountability in the real estate sector. It will enhance the consumer confidence and will benefit the whole sector. It will help to attract more investments into the real estate sector and may also open gates for FDI. This act will aid in the effective implementation of projects such as Hosing for All by 2020 and Smart City.