Skip to main content

Implication of the RERA (Real Estate Regulatory Act, 2017) on the Real Estate Sector


http://www.lawji.in/2017/07/implication-of-rera-real-estate.html

The Act (RERA) ushers in the much-desired accountability, transparency and efficiency in the sector, defining the rights and obligations of both the buyers and developers.
-Venkaiah Naidu

On May 1, 2017, the Real Estate (Regulation and Development) bill which was introduced in 2013 by the UPA government was passed by making several amendments to it. This Act as very much obvious from the quotation above by Venkaiah Naidu, the Housing and Urban Poverty Alleviation minister will benefit both the buyer (who were in the most disadvantageous position in real estate sector earlier) and the seller. The Act was passed amid the situation when India’s rank in the World Bank’s report which was published in April, 2017 on Ease of Obtaining Construction Permit Index was 185 out of 187 countries, even worse than the war-torn countries in the world.
Prior to this Act, there remain no such structured law in Real Estate sector beside some State laws on it which also have a limited jurisdiction. This Act will override all those State Acts on the subject matter. The one basic question regarding this Act that will arise in anyone’s mind will be that how come Parliament got the power to make laws on land in real estate, as that is a subject of State List (only States are empowered to make laws on it). Well that’s clear because the primary aim of the Act is to regulate contracts and transfer of property, both of which are in the Concurrent List. The reason behind implementation of this Act is grave, as 80% of the projects are delayed, the money that had been deposited as advance has been used in some other project. Also the delay is unprecedented, some of the projectare delayed by 5-6 years.

Now the question before us is that how is RERA Act, 2017, will change the present regime under the Real Estate Sector.

Registration

All the real estate projects before they would start construction have to register with the authority created under the RERA Act, which is a subject matter of the State government. Also those projects which are pending also have to register under this, and then only they can continue their construction work. For registration also they have to follow certain guidelines like they have to disclose the details of their projects, land status, carpet area to be allotted, agreements with the buyers, real estate agents working for them, and also the details of the employees working on the project like engineers, construction workers etc. And all the details have also to be uploaded on the RERA website of that State. If the project is not registered then they have to pay 10% of the project cost as penalty. It doesn’t stop here, this Act will also regulate and organize the working of the Real Estate agents by making it mandatory that they have to register with the appropriate RERA authority.

Separate Bank Account

For every separate project it is compulsory to have a separate escrow account. Also the account must have the 70% of the total deposited money by the buyers. This amount has to be used for the construction of that particular project only. While the State government can lower the escrow account amount below 70%.

Appellate Tribunal

Under the Act there should be a separate appellate tribunal to hear the matters coming under the RERA Act. The Act completely bars the jurisdiction of the Civil Courts in matters related to RERA. The Appellate authority has to clear the cases within 60 days and the appeal to the High Court has to be made within 60 days. Any non-compliance with the orders of the Appellate Tribunal by the buyer or the brokers will attract a penalty of 10% of the apartment’s cost and a jail term of 1 year, while in case of builders it may extend to 3 years.

Conclusion
The RERA Act will particularly create a transparency in the real estate sector which was not there previously. Now the consumer or buyer need not have to wait for long to get their home sweet home. All the possible activities of the builders to cheat the buyers in anyway will be checked. But this can only be possible only with the support of the State governments who have to ultimately enforce the law and had to make the necessary arrangements. This can be evident from the very news that till now only Madhya Pradesh has formed one regulatory authority. But as good things need time, so hope for the best.


Popular posts from this blog

Art of Cross Examination used by: Sr. Adv. Ram Jethmalani, Supreme court

“The issue of a cause rarely depends upon a speech and is but seldom even affected by it. But there is never a cause contested, the result of which is not mainly dependent upon the skill with which the advocate conducts his cross examination.”- Francis L. Wellman

When asked, the undisputed champion of cross-examination, Mr. Ram Jethmalanidescribed the art of cross-examination as the most effective weapon for the discovery of truth, provided the objective is not to confound a truthful witness but to extract truth from an unwilling witness.
The search for truth is the ultimate and idealistic end of all litigated matter in a court trial, and that truth is obtained due to the process of cross examination in the conduct of litigation.

Mr. Jethmalani understands that in India where large number of complaints and cases are filed in civil and criminal courts every day, delay in justice is common due to the rapidly growing pendency of cases in courts. Examination of witnesses plays an important …

Adv Ram Jethmalani :The Legend of the Bar; Started practicing at 17, still strong at 93.

Ram Jethmalani a True Legend in Providing legal services in India was born on 14th September, 1923 in state of Sindh in Pakistan. His Career in India is as a Lawyer and a Politician.

Virtuoso, flashy and argumentative is a portion of the words that can be usually used to portray Ram Jethmalani's life and career. Be that as it may, being a prestigious government official and legal counselor, additionally accompanies being included in numerous debates. In Year 1971, when he stepped into politics Mr. Jethmalani played an important role in campaigning against the ruling party, during the National Emergency period. Since then he has remained as the most popular figure in politics. Ram Jethmalani has been an important member of the Supreme Court Bar Association and Indian Bar Council for several years. At the age of 93, he is still an active political and Famous lawyer in India.

Early Life
Ram Jethmalani was born on the 14th September 1923 out of a residential community called Shikharpur,…

Harish Salve: India's eminent commercial lawyer

“Harish Salve”, the name is enough to define his stature in the field of independent practise in India. People view him as the one who could win the impossible for any client he took on. Mr. Salve was born at Warud in Maharashtra. His father, N.K.P. Salve was a renowned chartered accountant and founder of the Salve & Co. (chartered accountancy firm). His grandfather was a criminal lawyer. So, the law background in the family was already there to assist him through. As a young boy, Mr. Harish wanted to be an engineer but by the time he developed an interest in Chartered Accountancy. He started preparing for the exam. His father used to work with Nani Palkhivala, one day his father requested him to prepare a note on some complicated point in relation to the new provisions establishing the Settlement Commission which was related to some case, Mr Salve prepared the note and his father was that much impressed that he showed it to Nani Palkhivala, who after going through the note asked …

Advt.