New Delhi: The Real Estate (Regulation and Development) Act, 2016 will come into effect from Sunday May 01. It has set in motion, the process of making necessary operational rules and creation of institutional infrastructure for protecting the interests of consumers.
Earlier this week, the ministry of housing and urban poverty alleviation (HUPA) notified 69 of the total 92 sections of the act which would the act into force from May 1.
The bill was first introduced in 2013 and amendments have been made to it by the present government. As per the notification of the Ministry, rules under the act have to be formulated by the Central and State Governments within a maximum period of six months.
The ministry of HUPA would make rules for union territories without legislatures while the ministry of urban development would do so for Delhi.
As per the act, Real Estate Regulatory Authority will be formulated within one year which will regulate transactions related to both residential and commercial projects. The authority will grade the projects helping customers to make better decisions.
The Regulatory Authorities will have to dispose of complaints in 60 days and Appellate Tribunals will be required to adjudicate cases in 60 days.
One of the problems which buyers face is that they don’t get possession of property as promised by the seller because of delayed construction among other issues. The Act ensures that 70 per cent of the money taken from buyers has to be kept aside in a separate bank account and this money can only be used for construction activities. This will ensure that the sellers don’t invest the money received from one project into another project.
As per the Act, it will become mandatory for sellers to disclose all information like project layout, approval, land status, contractors, schedule and completion of project with customers as well as the RERA.