- The Ministry of Housing & Urban Poverty Alleviation has notified RERA for Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep and Chandigarh
- While the rules are only applicable to Union Territories, experts say this will act as a template for other states to frame their rules.
- Act will apply retrospectively to existing projects without Completion Certificate
- The states of Gujarat and Uttar Pradesh have already notified the rules, but the other states are unlikely to meet the 31st, October deadline.
DELHI: The ministry of Housing & Urban Poverty Alleviation today notified the Real Estate (Regulation and Development) (General) Rules, 2016 for the five Union Territories of Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep and Chandigarh, without legislature.
The Real Estate Regulator Bill (RERA) came into force on May 1st, 2016 and was required to be notified within a period of six months which ends on 31st October. Draft rules had been placed in the public domain for discussion three months ago and the notified rules contain suggestions received from consumer associations and real estate bodies. While the rules are only applicable to Union Territories where the rate of project delays and developer malpractices are not as high as in the rest of the country, experts say this will act as a template for other states to frame their rules.
At the moment, the ministry of Urban Development is working on similar rules for the National Capital Region of Delhi while the state governments are required to notify the rules for application in their respective states. The states of Gujarat and Uttar Pradesh have already notified the rules, but the other states are unlikely to meet the 31st, October deadline. Sources in the ministry tell NDTV that the rest are expected to notify the rules by the end of November.
RERA: 10 Things To Know
1) For ongoing projects without Completion Certificate (CC), developers will have to deposit 70% of the amount collected from homebuyers in a separate bank account within 3 months of registering a project with RERA.
2) In case of delays, developers will be required to pay compensation to the allottees with an Interest Rate of SBI’s highest Marginal Cost of Lending Rate plus 2%. This effectively means a developer will have to pay interest rates of 11 to 12 % in case of a delay in project delivery.
3) The rules also contain clauses providing for compounding of punishment with imprisonment for violation of the orders of Real Estate Appellate Tribunal against payment of 10% of project cost in case of developers and 10% of the cost of property purchased in case of allottees and agents.
4) Discrimination in sale of properties on any grounds will also not be entertained under the new rules. Adjudicating Officers, Real Estate Authorities and Appellate Tribunals shall dispose of complaints within 60 days
5) For ongoing projects that have not received Completion Certificate (CC), the developers will have to make public the original sanctioned plans with specifications and changes made later, total amount collected from allottees, money used, original timeline for completion and the time period within which the developer undertakes to complete the project.
6) The promoter shall also be required to declare the size of the apartment based on carpet area even if it was sold earlier on any other basis.
7) For registration of projects with the authorities, developers will be required to submit authenticated copy of PAN Card, annual report comprising audited profit and loss account, balance sheet, cash flow statement and auditors report of the promoter for the immediate three preceding years, authenticated copy of legal title deed, copy of collaboration agreement if the promoter is not the owner of the plot. The promoter will also has to declare information regarding the number of open and closed parking areas in the project.
8) The promoter will also have to upload details regarding number and type of apartments or plots, status of the project with photographs floor-wise, status of construction of internal infrastructure and common areas with photos, status of approvals received and expected date of receipt, within 15 days of expiry of each quarter on the project website.
9) In a departure from the draft rules, the requirement of disclosing Income Tax returns has been withdrawn in the final rules keeping in view the confidentiality attached with them and as pointed out by legal experts and promoters.
10) In addition to this, the Real Estate Regulatory authorities will also publish 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., on the RERA website.
Abhay Upadhyay, national convenor for the Fight For RERA group welcomed the notification of the rules and said “ we are thankful to the PM and the government for coming out with rules which have fully taken care of concerns expressed by Fight For RERA team towards home buyers. Specially, the provision with regard to the deposit of the 70% of unused amount, collected for ongoing project to be kept into separate account is very commendable and it will go a long way in starting all the stalled projects for last so many years.”
By Nikhil Narayan, Chanakya Bhatia & Neetika Bajaj