In a relief for home buyers, Government has passed new laws RERA in real estate market. Here are 5 things you should know about the new rules.
State-level legislation
The states that have notified the rules are Uttar Pradesh, Bihar, Gujarat, Odisha, Andhra Pradesh, Maharashtra and Madhya Pradesh. While the housing ministry had last year notified the rules for five Union territories, the urban development ministry came out with such rules for the national capital region of Delhi. The other states and UTs will have to come out with their own rules and will have their own regulatory authorities. While 13 states have already notified, the minister said that others will also do so.
Both new building projects and ongoing projects will be subject to the laws, with the exception of certain projects that have already been completed.
Tighter selection of builders
Property Builders containing those who have ongoing construction are essential to register with their local state regulatory authorities in the next three months, and provide regular updates on the status of the building projects on the regulators’ websites. They will also must disclose details of correctly when property will be completed and how much money they have already collected.
Builders will be required to deposit 70% of the money they collect from probable home buyers into an escrow account that will only be used for construction purposes.
Penalties for delayed projects
If property builder has delayed a housing project they will now have to either refund amount they have charged, or pay interest on it till the home is delivered to the homebuyer. Home builders that break up the new laws could be restrained for up to three years.
No more early bird deals
Builders can now only advertise property and homes once they have received all the regulatory approvals.
In addition, builders will also have to enter a registered sale agreement if they collect more than 10 per cent of the home value at the time of booking the project.
Real estate disputes
In case of disputes, instead of going to civil courts, home buyers can now take their complaints in connection to their property projects to special real estate courts that will be set up in each state. This is aimed at speeding up the current redressal process.