Page 46 - Banking Finance November 2017

ARTICLE

homebuyers as builders will be accountable for the promise 4.) Offences, penalties and adjudication: As per section
they made to the home buyers. To safeguard the interest 59, where under the Act it is obligatory for the pro-
of home buyers the following provisions are made in RERA: moter to register a project with the Authority, and if
1.) Registration: The Real Estate Act makes it mandatory the promoter fails to do the same, he shall be liable to
for all commercial and residential real estate projects penalties upto ten percent of the estimated cost of the
where the land is over 500 square meters, or eight real estate project.
apartments, to register with the Real Estate Regula-
tory Authority (RERA) for launching a project, in order However, in case the promoter consistently defaults or does
to provide greater transparency in project marketing not comply with the directions/ orders of the Authority as
and execution. For on going projects which have not regards registration of the project with the authority, he
received completion certificate on the date of com- shall be liable to additional fine of ten percent of the esti-
mencement of the Act, will have to seek registration mated cost of the real estate project or imprisonment upto
within 3 months. 3 years or both.
Application for registration must be either approved or
rejected within a period of 30 days from the date of As per section 61 if the prompter defaults any other provi-
application by the RERA. On successful registration, the sion of the Act or the Rules and Regulation made thereun-
der, he shall be liable to a penalty upto five percent of the
promoter of the project will be provided with a regis-
tration number, a login ID and password for the appli- estimated cost of the real estate project.
cants to fill up essential details on the website of the
Implementation of the new law is expected to boost the
RERA. For Failure to register, apenalty of up to 10 per-
cent of the project cost or three years' imprisonment demand in the real estate where unsold inventories have
may be imposed.Real estate agents who facilitate sell- been piling up since demonetization of the high value cur-
rency notes.
ing or purchase of properties must take prior registra-
tion from RERA. Such agents will be issued a single reg-
istration number for each State or Union Territory, Here are the ways in which RERA could

which must be quoted by the agent in every sale facili- help homebuyers
tated by him.
Completion of project on time: Delays in projects are the
biggest issue faced by the buyers. The reasons are many and
2.) Protection to buyers: The Act prohibits unaccounted
impact is huge. Scores of homebuyers in real estate such as
money from being pumped into the sector as of now
70 percent of the money has to be deposited in bank Noida have not been able to get the possession of their
apartments even after paying the full amount to builders.
account through cheques. A major benefit for consum-
Under the new law the promoter of a real estate develop-
ers included in the Act is that builders will have to quote
prices based on carpet area and not super built-up area, ment firm has to maintain a separate escrow accounts for
while carpet area has been clearly defined in the Act
to include usable space like kitchen and toilets.

3.) Real estate Regulatory Authority and Appellate Tri-
bunal: It will establish state-level Real Estate Regula-
tory Authorities (RERAs) to regulate transactions re-
lated to both residential and commercial projects and
ensure their timely completion and handover. Appellate
tribunals will now be required to adjudicate cases in 60
days as against the earlier provision of 90 days and Regu-
latory Authority to dispose of complaints in 60 days while
no time frame was indicated in earlier bill.

46 | 2017 | NOVEMBER | BANKING FINANCE

Sashi Publications Pvt Ltd Call 8443808873/ 8232083010