Saturday, June 15, 2013

Key Features of the Real Estate Regulatory Authority Bill

The Real Estate (Regulation and Development) Bill, approved by the Union Cabinet on 4th June
2013 provides a uniform regulatory environment to the sector.

  • Developers/ Builders with a project of 1,000 sq. mt. and above must register all projects and obtain all relevant clearances with the state regulatory authority. Authorities have 15 days to approve or reject a project.
  • Developers cannot offer any pre-launch sales or collect any money from buyers without all regulatory approvals. Advance money of not more than 10% can be accepted from the buyers without any written agreement.
  • Construction to begin only after the developer's website has displayed all details of the project including receipt of clearances and the carpet area of the flat.
  • The developers will have to maintain a separate bank account for each project, and will not be allowed to divert the money for other projects. It will be mandatory to keep 70% of the buyers funds in a separate bank account to ensure timely completion of projects.
  • Builders will have to use photographs of actual site for advertisements purpose. Builders coming out with misleading advertisements consider as punishable crime.
  • Builder will refund the full amount received from the buyer with interest in case of delay in projects.
  • Failure of any provision will attract a penalty which may be up to 10% of the project cost or imprisonment up to three years.


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