The Real Estate (Regulation and Development) Act is a piece of statute aimed at establishing an oversight mechanism to enforce accountability of the Real Estate Sector and providing adjudication machinery for speedy dispute redressal. Though the Consumer Protection Act, 1986 is available as a forum to the buyers in the real estate market, the recourse is only curative and is inadequate to address all the concerns of buyers and promoters in that sector. Hence the government thought it necessary to have a separate law to look after the needs of the Realty Sector.
The Act provides for the establishment of the Real Estate Regulatory Authority (the Authority) for regulation and promotion of real estate sector and to ensure sale of plots, apartments or buildings, as the case may be, in an efficient and transparent manner and to protect the interest of consumers in real estate sector and establish the Real Estate Appellate Tribunal to hear appeals from the decisions, directions or orders of the Authority. The Act aims at providing greater accountability towards consumers, and significantly reduce frauds, arrest delays and bring down the current high transaction costs. It attempts to balance the interests of consumers and promoters by imposing certain responsibilities on both.
Some important provisions of the Real Estate (Regulation and Development) Act which you should be aware of are:
The registration of real estate project has been made compulsory in case where the area of land proposed to be developed exceeds five hundred square meters or number of apartments proposed to be developed exceeds eight.
Real estate agent cannot facilitate sale or purchase of any plot, apartment or building, as the case may be, without registering himself with the Real Estate Regulatory Authority.
The Act clearly mentions what is Carpet area. Carpet area is the net usable floor area of an apartment. Net usable floor area means to include the area sold to the allottee for his individual use, which includes living room, bedroom, kitchen area, lavatory(s), bathroom(s), balcony/verandah if covered, any area for the residence of domestic help within the apartment, and covered parking or any other type of independent use ancillary to the purpose specified. The buyer will pay only for the carpet area (area within walls). The builder can’t charge for the super built-up area, as was the practice before enactment of this Act.
The developer has to ensure that the money realized from the buyers would be used for the specific projects and would not get diverted other projects or purposes. The Act provides for maintenance of a specific dedicated account to the extent of upto 70 per cent of the cost.
It is the responsibility of the promoter to obtain a completion certificate from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or to the association of allottees, as the case may be.
Bill makes the promoter duty bound to rectify the structural defects that are brought to his notice by the allottee within a time period of five years of allotment.
To enable informed decisions by buyers, Real Estate Regulatory Authorities will ensure publication on their websites information relating to profile and track record of promoters, details of litigations, etc.
The promoter should execute a registered conveyance deed in favour of the allottee alongwith the undivided proportionate title in common areas including the handing over of the possession of the plot, apartment or building, as the case may be, in a real estate project, and the other title documents pertaining thereto.
The allottee shall be entitled to claim the refund of amount paid, from the promoter, if the promoter fails to comply or is unable to give possession of the apartment, plot or building, as the case may be, in accordance with the terms of agreement.