The real estate sector, which was earlier a free sector where developers easily flouted rules will, now be under the radar of the Regulatory Authority. After years of waiting, finally there is a ray of hope for helpless home-buyers in the country in the form of RERA (Real Estate Regulation and Development Act), which became effective May 1, 2017.
A big ‘NO’ to selling flats without registering
As per the Maharashtra RERA, Section 3 of the Act, the promoter of an ongoing project shall not advertise, market, book, sell or offer for sale or invite persons to purchase in any manner any plot, apartment or building, unless he registers the project. In the ongoing projects, builders may still advertise but this could be subject to state rules.
Now, developers will also have to compulsorily register themselves as well as their projects with the authority. Unless they do so, they won’t be able to either advertise or sell their project. This will ensure better governance of the sector and also help buyers.
The builders whose projects are completed and have also received completion certificate (OC) and occupancy certificate (CC) can continue selling flats through advertisement of the remaining unsold flats. Developers will be required to obtain registration in case they wish to continue to sell the project to customers post-May 1, 2017.
For the on-going projects for which CC is not been issued till May 1, builders will have apply for registering the incomplete project within a period of 3 months from the date of the commencement of the Act. This means those who have booked flats earlier and not yet got possession, such people will profited as these projects will come under RERA.
RERA goes tough on builders
While registering incomplete project, the developer will have to revise the date of the completion of the project.
The developer of the ongoing project has to register the projects compulsorily within 90 days from the commencement of the Act. They will have to furnish following information to the Regulatory Authority.
- The developer will have to inform Regulatory Authority of the amount collected from selling flats. He will also inform how much of the amount is spent on the project and also how much amount is lying with the promoter.
- The status of the project, including the original time period disclosed to buyers, including delay period time and the time period in which the developer must complete the pending project which shall be certified by an engineer, architect and chartered accountant.
- The promoter shall also disclose the size of the flats on carpet area even if sold on super built up area.
- For ongoing projects, the developer will have to deposit 70 per cent of the amount collected from the buyers in a separate bank account.
Builders have already started registering projects?
According to media reports, a Mumbai and Thane based builders were the first to register under RERA. Nayan Shah of Mayfair Housing was the first to register followed by Rajan Bandelkar of Raunak Group (Thane), claims the report.
RERA in brief
Under the law, all states will have to establish a real estate regulatory authority within 3 months from the enactment of the law, which will regulate the conduct of developers and punish those guilty of conning the consumers. The RERA is a central law, its implementation will depend on state governments, as real estate is a state subject.
RERA is supposed to protect the interest of the homebuyer and ensure timely delivery of projects. Real Estate Regulatory Authority (RERA) Bill was introduced in 2013 and finally the bill got approved in March last year. As of till May 1, the RERA came into force in 13 states and Union territories. ERA will not only help the new buyers but will also help those who are still waiting for possession of flats.