Real Estate (Regulation and Development) Act, 2016

Real Estate, Wills, Probate and Trust | Comments (0)

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After crossing the herd of controversies, apprehensions, protests and consents for last 8 years, the Real Estate (Regulation and Development) Act came into effect from 1st May, 2016. Now, the countdown has just begun for making essential operational rules, tribunals, authorities by the Ministry of Housing and Urban Poverty Alleviation. 

Real Estate (Regulation and Development) Bill 2016

In consideration to the increasing demand for housing, private builders and real estate players have been taking an undue advantage of this unregulated industry’s situation. Unfair contracts, prejudicial conditions, insensitive charging of interest on buyers and flaws in current laws have empowered the buyers to deal unreasonably with the conditions of consumers. Thus, there was a need of an effective legislation and mechanism that can enable consumers to enforce accountability against erring property developers and also, that can redress their grievances or adjudicate the disputes between buyer and developers. This led to the passing of this bill by both the parliamentary houses and which later, obtained the consent from the President of India. 

Objective of this Act - a brief glimpse

New Guidelines and Provisions under the bill

In case the allottee wishes to continue with the project despite the delay and doesn’t withdraw, then he is entitled to interest, at the mentioned rate, by the promoter for the delay till the date of handing over the possession.
Apart from aforementioned main provisions, there are other additional provisions in the Act to support the fulfillment of the objectives laid down for the enactment of Real Estate Regulatory & Development Act.

Punishments/penalties on violating the provisions of new Act

Appeal Process in case of dispute or consumer grievance

Structural recap on significant provisions: 

DELAY IN CONSTRUCTION/ HANDOVER

CARPET AREA/SUPER AREA

MISMANAGEMENT OF FUNDS

Accurate Information

SETTING UP ALLOTTEE ASSOCIATION

Advantages and Disadvantages under the Bill for the home buyers

Advantages:

One of the good effects expected for promoters and builders out of this bill is that they can expect less financing cost as they are anticipating fall in interest rates on bank loans and finances.  

Disadvantages

The impact of Real Estate (Regulation & Development) Act, 2016 is keenly anticipated by analysts and economists from the perspective of consumers and they have come up with positive analysis.  The sector will become more organized, transparent and properly regulated. This will boost foreign direct investment as well as domestic investment leading to better economic growth of the nation. Last but not the least; it will act as a powerful weapon in the hands of home buyers against unfair real estate developers. 
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