NEW DELHI: In a move to protect the interests of home buyers and bring more transparency in the real estate sector, the Centre is soon expected to notify the Real Estate Act passed by Parliament in March.
Senior officials of the Ministry of Housing and Urban Poverty Alleviation and Ministry of Law are expected to meet on Monday to finalise the rules, sources told Express. The rules, meant for Union Territories, are expected to be notified later this month.
The Act has several salient features to protect the interests of home buyers. According to the Act, 70 per cent of money taken from the buyers must be set aside in a separate bank account by the developers. This money can only be used for construction activities of that particular project. Developers cannot invest this money in other projects.
To protect buyers from being cheated with fancy designs on paper and model apartments, the Act makes it mandatory for sellers to disclose all project-related information, including project layout, status of approval for land and building, contractors involved and scheduled time of delivery.
The Act also says that if a developer fails to hand over the property within the deadline, he would be liable to pay the buyer a certain amount as interest. This is to compensate the interest money the buyer will be paying against his housing loan. Other provisions include the establishment of state-level authorities called Real Estate Regulatory Authorities (RERAs) that are mandated to regulate transactions related to buyers and sellers of both residential and commercial projects.
The Act also provides for imprisonment of up to three years for builders and one year for real estate agents and buyers for violation of any provisions, a stringent penalty according to experts. As per the provisions, Real Estate Regulatory Authorities and Real Estate Appellate Tribunals have to be set up by the end of April, 2017 and the entire Act has to come into effect a day after.
The Centre is framing these rules for Union Territories of Andaman & Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman & Diu and Lakshadweep -- while rules to operationalise the legislation for states have to be notified by respective State governments.
For Delhi, the Urban Development Ministry will come out with a separate set of rules. Parliament in March this year had passed the Real Estate (Regulation and Development) Bill, 2016. The government came out with a notification in April and the rules were to be notified by October 31. The ministry’s April notification brought into effect 69 of the 82 sections of the Act.