The Real Estate Act 2016 has come into effect from May 1,2017. The Act was passed by parliament in March 2016. The union government of India notified the rules under the Real Estate Regulation Act 2016(RERA), which will be applicable to the five union territories. And states will notify its own rule under the Real Estate Regulation Act 2016 (RERA). Yet only 14 states have notified their rules. RERA will be applicable all residential and commercial project which are being built over area of 500 sq meter or having 8 flates.
Some main features of the act
-Developers have to open an escrow account for all sales proceeds and use this account for all payments for the particular project. 70% of the money collected, has to remain in the escrow account, to facilitate all project-related expenses and the rest of the money can be taken out by the developer to use as they deem fit.
-There is an interest penalty for delayed possession that is imposed on the developer.
-Projects can only be launched, upon receiving the relevant approvals from the concerned authorities. These approvals have to be put up on the RERA website, along with all the pertinent project details and the project has to be approved by the regulatory authority. Customers can log onto the RERA website, to see the project’s details.
-Sale of properties will strictly be on the basis of carpet area.
-Any grievance has to be resolved by the state’s real estate regulatory authority, within 60 days.