Real Estate (Regulation & Development) Act, 2016
About the Act
- The real estate (regulation and development) Act 2016 was enacted with the main purpose to establish the state level regulatory authorities called Real Estate Regulatory Authority for regulation and promotion of the real estate sector.
- The Act has the following objectives:
- To protect the interest of the allottees (buyers) and ensure their responsibility;
- To maintain transparency and reduce the chances of fraud;
- To implement Pan-India standardization and bring about professionalism;
- To enhance the flow of correct information between the home buyers and the sellers;
- To impose greater responsibilities on both the builders and the investors;
- To enhance the reliability of the sector and thereby increase confidence amongst the investors.
- Residential real estate projects, with some exceptions, need to be registered with RERAs. Promoters cannot book or offer these projects for sale without registering them. Real estate agents dealing in these projects also need to register with RERAs.
- On registration, the promoter must upload details of the project on the website of the RERA. These include the site and layout plan, and schedule for completion of the real estate project.
- 70% of the amount collected from buyers for a project must be maintained in a separate bank account (escrow account) and must only be used for construction of that project.
- As per RERA, a promoter is responsible for rectification of a structural defect or any other defect in workmanship, quality or provision of services in the project for five years from the date of handing over possession, without further charge.
- The Act establishes state level tribunals called Real Estate Appellate Tribunals. Decisions of RERAs can be appealed in these tribunals.
Why in News?
- Minister for Housing and Urban Affairs Hardeep Singh Puri complimented the distance traversed in implementation of Real Estate (Regulation and Development) Act, RERA.
- He said, despite that a lot more needs to be done to utilize the full potential of this path-breaking legislation.
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