The first set of regulation for real estate industry, ‘The Real Estate (Regulation and Development) (REDA) Act, 2016’ empower each State and Union Territory to have its own Regulatory Authority (RERA) which will ensure smooth implementation of RERA regulations. On the same line, Government of Maharashtra notified RERA rules and established Maharashtra Real Estate Regulatory Authority (Maha-RERA), vide Notification dated 8 March 2017, for regulation and promotion of real estate sector in the State of Maharashtra.
Consequently, Mr. Gautam Chatterjee, IAS and state regulator, RERA (Maharashtra) said “It will make things easy and there is nothing to fear for those who follow the law”, while speaking at a workshop on RERA Rules and Regulations.
Let me brief you about the key component of REDA and RERA which are as follows:
- Real Estate Regulatory Authority and Appellate Tribunal
An Appellate Tribunal has been established by Maha-RERA in order to resolve the grievances, soon within a period of sixty days, of any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer. Further the authority shall construct an adjudicating mechanism for speedy redressal of already registered disputes.
2. Real Estate Project Registration
Rules has been framed in the direction of registration of all commercial and residential real estate projects with some exceptions to certain specified projects. Even real estate project which has not received Completion Certificate or Occupation certificate as on 01/05/2017, shall also be required to be registered. Any violation of any of the related regulations may attract heavy penalty up to imprisonment for a term which may extend up to three years, or with both.
- Real Estate Agents Registration
Now for the purpose of sale or purchase of any plot, apartment or any building a real estate agent whether act on his own or on behalf of others has to register himself. Failing to obtain such registration will attract a penalty of Rs. 10,000/- for every day during which such default continues which may cumulatively extend up to five per cent of the cost of project.
- Filing of Complaints
In order to protect the interest of citizens, High Courts will make an appearance in the decisions provided by Appellate Tribunal, if such aggrieved person file an appeal before High Court.
- Monetary Regulations
Some of its provisions in respect of financial discipline in real estate sector are as follows:
- Now the promoters of the project are not allowed to accept more than 10% of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, without first entering into a written agreement for sale with the person and register the said agreement for sale
- As per regulations it is mandatory to maintain 70% of the amounts realized for the real estate project from the allotter in a separate bank account in a scheduled bank which is used only for the purpose of cost of construction and acquire land. Further withdrawal from such accounts shall be in proportion to the work certified by an engineer, an architect and a chartered accountant in practice.
- A provision of full refund of property cost with interest is incorporated to compensate buyer in case of any false or incorrect statement
- Provisions has been set up regarding Audit of project accounts submission, penalties and effect of Non-compliance.
To keep an eye, the promoters are bound to update the details of all the Registered Projects along with their blueprints. Some of them are mentioned as follows:
- Quarterly update of the list of number and types of apartments or plots, covered parking, garages, as the case may be, booked
- Quarterly update of the list of approvals taken and the approvals which are pending subsequent to commencement certificate along with status of ongoing projects.
- Citizen Centricity
As consequence of RERA, the state regulations in real estate sector are more Citizen focal. MahaRERA implement various restrictions on promoters of the projects such as:
- Without the previous consent of at least two-thirds of the allotter (Other than promoters) no developers are not allowed to make any additions and alterations in the sanctioned plans, layout plans etc.
- Promoter to enable form any Legal Entity within three months from the date on which sixty per cent of the total number of Purchasers in such a building or a wing, have booked their apartment.
Real Estate Regulation Act (RERA) 2016 is a movement towards Change in the reality of real estate sector.
Disclaimer – the above article is based on our own internal information and sources. The above informations would not be applicable unless and until a related Government notification is issued in this regard. Please take expert opinion before relying on any of the information.