- State's draft RERA rules to be out by this week.
- Draft rules to include full disclosure by developers on RERA website
- State RERA to have harsher penalties than Central RERA
MUMBAI: The central government’s Real Estate Regulator Bill (RERA) came into force on May 1st, 2016, with a condition that the states be ready with their rules within a period of 6 months. In an exclusive chat with NDTV, the Minister of State for Housing for Maharashtra Ravindra Waikar has revealed that his state will be the first to reach this target, with the draft rules to be released for public discussion this week. Here is what we can expect from the Maharashtra RERA.
“We are making rules by taking the advice of law and judicial department and all the departments which are connected to it. We have to finish the rules before 31st October. While making these we are looking that these rules are in favor of both the buyers as well as the builders.” – Ravindra Waikar, Minister of State for Housing, Maharashtra
1) No more lengthy court cases
In case of any dispute with the rulings made by the state RERA, provisions have been made for the setting up of an Appellate Tribunal which will decide the matter. The tribunal will consist of three members who will be appointed by the chief justice of India. The tribunal will be headed by a president and two other members and will have to resolve disputes within 60 days. This system will also allow home buyers speedy solutions to their disputes with builders.
2) Full disclosure from the start
As soon as a developer acquires a plot, he will have to submit all the details of the proposed project on a website which will be managed by the real estate regulatory authority. A developer will have to reveal various details including the nature of development on the plot, the title to the land indicating ownership, the manner in which the project will executed including timelines and the various methods through which the project will be financed and how the money will be spent. Once uploaded, all of this information will be in the public domain, making it easy for homebuyers to gauge the potential of a project.
3) Real estate agents will be held accountable too
So far, real estate agents who broker property purchases in return for a commission from both the buyer and the builder have gotten away scot-free in case the project runs into trouble. But that will not be the case any longer. The state RERA has proposed the mandatory registration of all real estate agents. And in case a project doesn’t have the necessary permissions in place and the agent has misrepresented the project to a buyer, the agent will have to pay 5% of the total price of the property in question as penalty.
4) More buyer friendly than the central act
The state RERA also proposes more harsh terms than the center’s RERA. For instance, the penalty for developers who violate the procedures laid down under the central act is up to 5% of the total cost of the project. The state RERA is expected to raise that to 10%. Additionally, the central act has made provisions for 70% of funds collected from homebuyers to be placed in a separate account, which will be used only for the development of the project. The minister has indicated that the state act may raise that to 100% of the collected amount.
Edited by Nikhil Narayan Sivadas