Property

Real Estate Act, 2016 marches ahead with newly notified Real Estate (Regulation and Development) (General) Rules, 2016 for 5 Union Territories

31.10.2016

The Central Government has notified the Real Estate (Regulation and Development) (General) Rules, 2016, to be applicable to the five Union Territories i.e. Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep and Chandigarh. The said rules were required to be notified on October 31 as stipulated in the Real Estate (regulation & development) Act, 2016, that has been partly brought into effect on May 1, 2016.

The Real Estate act, 2016 is a major step in protecting the interests of consumers/buyers and also protects them from various kinds of frauds being played upon by the builders and also beneficial to genuine builders and developers. The newly notified rules will bring greater transparency in builder-buyer agreements and also makes it mandatory for builders and developers for timely construction of projects and possession thereof without applying any hidden charges etc. The said Rules also stipulate that the builders shall furnish additional information regarding the ongoing projects besides depositing 70 per cent of unused funds in a separate bank account to ensure their timely completion. The developers shall also be required to refund or pay compensation to the buyers/allottees with an interest rate of State Bank of India's highest marginal cost of lending rate plus two per cent within 45 days of the payments becoming due. The new rules stipulates that the developer, within three months of applying for registration of a project with the Real Estate Regulatory Authority shall deposit in a separate bank account, 70 per cent of the amount collected and unused for ensuring completion of ongoing projects. The developers shall also have to publish all kinds of vital information in respect of the said project including status of the project with photographs floor-wise, status of construction of internal infrastructure and common areas with photos, etc. 

In order to make the provisions of the said Act more effective, the Rules also provide for compounding of punishment with imprisonment for violation of the orders of Real Estate Appellate Tribunal against payment of 10 per cent of project cost in case of developers and 10 per cent of the cost of property purchased in case of allottees and agents. Compliance with reasons for punishment shall be complied within 30 days of compounding.

Under the Rules, adjudicating officers, Real Estate Authorities and Appellate Tribunals shall dispose of the complaints within 60 days. The Real Estate Regulatory Authorities have to publish on their websites the information relating to profile and track record of promoters, details of litigations, advertisement and prospectus issued about the project, details of apartments, plots and garages, registered agents and consultants, development plan, financial details of the promoters, status of approvals and projects etc. The provisions of the Act further provides that Real Estate Regulatory Authorities are required to be put in place by April 30, 2017 before full Act is brought into effect.

Tags : Real estate Rules Union Territories

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