The Real Estate (Regulation and Development) Bill, 2016 was passed by Rajya Sabha on March 10 and Lok Sabha on March 15 this year.
The Act, which is touted as a major reform measure to regulate the vast real estate sector, requires registration of all projects with state level Real Estate Regulatory Authorities to ensure the protection of the interest of both buyers and builders.
The act also requires builders to deposit 70% of the payment made by allottees in a separate bank account to ensure that such funds are not diverted to other projects.
It also provided imprisonment up to 3 years for builders and one year for real estate agent and buyers for violation of any provisions of the Act.
Eventually, because of the efficiencies that RERA will bring in, prices will stabilize. RERA will not only help speeding up construction projects but also immunize buyers from any fraudulent practices.
As per the provisions of the Act, Real Estate Regulatory Authorities and Real estate Appellate Tribunals have to be set up by the end of April 2017 and entire Act is to come into effect the day after.
This will improve the ease of availability of financing options in the market. Industry feels that the rule of depositing 70% of sales proceeds in a separate account will help in getting timely delivery of the project and eliminate fly-by-night operators in the real estate.
Managing Director Buildomaven