The government notified the final rules to implement the Real Estate (Regulation and Development) Act, 2016 (RERA) that aims to bring transparency and set accountability in the sector and help in completion of stalled projects. The rules will be applicable for five Union territories without legislature of Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep and Chandigarh.
Here are the key points you should know about:
- Pay Compensation: Developers will now be required to refund or pay compensation to the allottees for delay in projects with an interest rate of the State Bank of India’s highest marginal cost of lending rate plus 2% within 45 days of it becoming due. This would come to around 11% to 12%.
- Deposit Money: For the completion of ongoing projects, developers will have to deposit 70% of the amount collected and unused within three months of applying for registration of a project with the Real Estate Regulatory Authority in a separate bank account.
- Punishment: 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.
- Sale of Properties: 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.
- Certification: In respect of the ongoing projects that have not received completion certificate in specified time, 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.
- Carpet Area: Promoter shall also declare size of the apartment based on carpet area even if it was earlier sold on any other basis.
- Registration: 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. Promoter also has to declare information regarding the number of open and closed parking areas in the project.
- Income Tax Returns: The requirement of disclosing Income Tax returns proposed earlier has been withdrawn in the final Rules keeping in view the confidentiality attached with them and as pointed out by legal experts and promoters.
- Fee for Registration: To incentivize registration of projects and Real Estate Agents with Regulatory Authorities, fee for the same has been reduced by half based on suggestions from promoters for reduction of fee.
- Information about Details: To enable informed decisions by buyers, Real Estate Regulatory Authorities will ensure publication on their websites 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.