6 ways in which the Real Estate Act will protect you.
The Real Estate Act comes into force in 2016 and makes several provisions for the protection of buyers :
- Mandatory to register with the Real Estate Regulatory Authority (RERA): All commercial and residential real estate projects with over 500 square meters or eight apartments shall register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution. For on-going projects which have not received completion certificate on the date of commencement of the Act, will have to seek registration.
- Escrow Account: The Act prohibits unaccounted money from being pumped into the sector and the money has to be deposited in escrow bank accounts through cheques. There was a time when the money of project for which the payment was taken, was invested in other projects which ultimately resulted downfall of market. This is now being curbed in this bill.
- Clear Clauses: A major benefit for consumers included in the Act is that builders will have to quote prices based on carpet area and not super built-up area. The carpet area has been clearly defined in the Act to include usable spaces like kitchen and toilets.
- Real Estate Regulatory Authorities: Real Estate Regulatory Authorities (RERAs) shall regulate transactions related to both residential and commercial projects and ensure their timely completion and handover. Appellate Tribunal shall adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose off complaints in 60 days.
- Standard Agreement: Guidelines are being framed to have standard agreement by the builder with similar clauses so that the buyers are not cheated with clauses against them.
- Provision for damages for non-completion: The provision for jail term for a developer who violates the order of the appellate tribunal of the RERA is three years with or without a fine. However, even the consumer courts are taking strong action against builders where interest rate between 10.9% to 18% is answered against builder for his delay and other deficiencies.
With demonetization, the property prices are expected to fall up to 30% and the builders are facing the heat. Therefore, this Act will become a crucial tool to protect buyers.