Real Estate Act comes into force from today

New Delhi, May 1 (KNN) The Real Estate (Regulation & Development) Act, 2016 has come into force from today which regulate real estate sector involving over 76,000 companies across the county.

With all the 92 Sections of the Act coming into effect from today, developers shall get all the ongoing projects that have not received Completion Certificate and the new projects registered with Regulatory Authorities within three months i.e by July end.

This enables the buyers to enforce their rights and seek redressal of grievances after such registration, Ministry of Housing and Urban Poverty Alleviation said in a release. 

Minister of Housing & Urban Poverty Alleviation M Venkaiah Naidu in his tweets on the occasion said, “Real Estate Act coming into force after a nine year wait marks the beginning of a new era making buyer the King while developers benefit from the confidence of the King in the regulated environment.” 

Ahead of the Act coming into force, Ministry of Housing & Urban Poverty Alleviation has formulated and circulated Model Real Estate Regulations for adoption by the Regulatory Authorities in the States/UTs.

Under these Regulations, developers are required to display sanctioned plans and layout plans of at least 3 feet X 2 feet size at all marketing offices, other offices where properties are sold, all branch offices and head office of the promoters in addition to the site of project. Real Estate Regulatory Authorities may take decisions on all issues preferably through consensus failing which through voting with Chairman using Casting Vote in case of a tie.

There shall be quorum for the meetings of the Regulatory Authorities and if a meeting is adjourned due to lack of such quorum, such meeting can take place without quorum. Members of Regulatory Authorities shall declare interest if any in the matters coming up for discussion and shall not participate there in. 

Some of the major provisions of the Act, besides mandatory registration of projects and Real Estate Agents include: 

1.Depositing 70% of the funds collected from buyers in a separate bank account in case of new projects and 70% of unused funds in case of ongoing projects; 

2. Projects with plot size of minimum 500 sq.mt or 8 apartments shall be registered with Regulatory Authorities; 

3.Both developers and buyers to pay the same penal interest of SBI’s Marginal Cost of Lending Rate plus 2% in case of delays; 

4.Liability of developers for structural defects for five years; and 

5. Imprisonment of up to three years for developers and up to one year in case of agents and buyers for violation of orders of Appellate Tribunals and Regulatory Authorities. 

Chronology of events leading to regulation of real estate sector including both residential and commercial segments from May 1, 2017: 

1.May,2008: Ministry of HUPA first prepared a Concept Paper on regulation of real estate sector and a model law for legislation by States/UTs; 

2. Conference of Ministers of Housing in 2011 suggested a central law for regulation of real estate sector; 

3.July, 2011: Ministry of Law & Justice too suggested central legislation for regulation; 

4. June,2013: Union Cabinet approved Real Estate Bill, 2013 

5. August, 2013: Real Estate Bill was introduced in Rajya Sabha and was referred to Standing Committee; 

6. February, 2014: Report of Standing Committee was laid on the Tables of both Houses of Parliament; 

7. February, 2014: Attorney General upheld validity of central law for regulation of the sector 

8. April,2015: Union Cabinet approved official amendments based on recommendations of Standing Committee; 

9. May, 2015: Matter referred to the Select Committee of Rajya Sabha 

10. July, 2015: Report of Select Committee tabled in Rajya Sabha 

11. December, 2015: Real Estate Bill, 2015 incorporating several modifications based on Select 

Committee report and stakeholder consultations was approved by the Union Cabinet; 

12. March 10, 2016: The Real Estate (Regulation & Development) Bill, 2016 passed by Rajya Sabha; 

13. March 15, 2016: Lok Sabha passed the Bill as passed by Rajya Sabha; 

14. March 25, 2016: President gives assent to the Bill; 

15. April 26, 2016: 59 Sections of the Act were notified making them effective from May 1, 2016 enabling preparation of Real Estate Rules, setting up of Regulatory Authorities and other infrastructure; 

16. April 19, 2017: Remaining 32 Sections of the Act notified making them effective from May 1st this year requiring registration of projects within three months from tomorrow. 

17. May 1, 2017: New era begins for development of real estate sector in an atmosphere of investor confidence. (With PIB Inputs)