The Real Estate (Regulation and Development) Act 2016 (or RERA) is a landmark law as it enshrines consumer rights and builders’ obligations in law and promises to bring in a lot of transparency in transactions. The construction sector employs the second largest workforce in the country and contributes 10 per cent to the GDP. Absence of regulatory laws had allowed all kinds of fly-by-night operators to enter the sector and make a kill, leaving the consumers without any legal safeguards. With State governments now obliged to appoint regulators, it is expected the consumers will be able to readily access officials and a set of laws to seek quick remedies for their woes.
These views were expressed by an ensemble of legislators, consumers, lawyers and civil society activists who gathered for a session on awareness about citizens’ rights as consumers in a developer’s market and construction industry recently in Bengaluru. The first-of-its-kind awareness workshop was organized by the Namma Hakku of the Bangalore Citizens Forum.
70% cost in separate account
Under the RERA, the governments at the Centre, in States and in Union Territories are obliged to set up a Real Estate Regulatory Authority and appoint a “Regulator” to register complaints from consumers. All agents will have to secure registration from the Authority. Developers will have to execute a sale agreement if they are collecting 10% of sale money in advance. Promoters have to disclose all projects executed during the past five years. The Bill also makes it mandatory to put 70% of the project cost in a separate account. Rajeev Chandrasekhar, MP, along with a team of legal experts and citizen activists, offered valuable insights on RERA; clarified home buyers’ concerns against corrupt and inefficient builders; provided details of the obligations of developers; and urged citizens to come forward to claim their rights under the “iconic pro-consumer legislation”, as the MP put it.
It was pointed out that the promoters were duty bound to create a web page for each project, provide all the documentation, obtain completion and occupancy certificates, enable formation of the cooperative society or association of buyers, and obtain approval before change in layout or construction.
The RERA also provides for penalties for various violations. The developers are liable to pay 10 per cent of the project cost to the buyers for failure to register the project, 5 per cent project cost for providing false information, daily penalty up to 5 per cent of the project cost for failure to comply with RERA orders, and 10 per cent of the project cost and three years of imprisonment for failure to comply with RERA and Appellate Tribunal orders. And the allottee will have to pay a penalty ranging from 5 to 10 per cent of the plot or apartment cost for failure to comply with the RERA and Appellate Tribunal.
5-year defect liability
The Act provides the property buyers ample powers to insist upon getting what they were promised by developers and builders in the agreement and ensure that the product — plot, sites, house or flats — is delivered on time. It strikes a balance in relationship between the developers and buyers and provides for a faster dispute-resolution mechanism. It also ensures a regulated broker environment and provides for a five-year defect liability period.
A.V. Chandrashekara, former Judge of the High Court of Karnataka, Sajan Poovayya, senior advocate, Sunil Dutt Yadav, advocate, environmental issues and RWAs, and Rajagopalan, citizen activist, highlighted the salient points of the Act.
Source from: The Hindu
Buyers can Bank on RERA