Real Estate Regulation Act: A Positive Move
Updated: Dec 14, 2021
Ramesh Chaurasia Updates - Real Estate Regulation Act
The act came into effect in 2016. It is also called the “Real State (Regulation and Development) Act, 2016. The main motive of the establishment was to protect buyers, investors likewise and increase the investment into the Real-estate sector.
The Act clearly states “No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate under thus act" loosely translated no builder, broker or seller has the right to put up any kind of property for sale/rent/lease without prior notification and registration to the government under this act. This comes as a boon for buyers as the Real-estate sector is in complete chaos, the inflow of matter is not organized to favor the buyers in any way, this way every property dealer/broker will be in check with the government and you can hold the government responsible for any miscreants.
To prove legitimacy the act states that “Every promoter shall make an application to the Authority for registration of the real estate project in such form, manner, within such time and accompanied by such fee as may be" with this amendment any property which falls in the jurisdiction of government must be registered with all relevant documents of credit. This is another very important factor to derive investment. It gives the investors a sense of trust and legitimacy in business. With this, the investors will firmly believe that their capital is regulated at hands of the government and there is no chance of fraud of any kind. This also helps buyers understand that their money is well kept and safe. The savings they are committing to this will be secure and refrain from loss.
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To ease things for Builders “On receipt of the application under sub-section (1) of section 4, the Authority shall within a period of thirty days.” The given application must be taken into consideration within 30 Days and further mandates should be notified to the concerned party. This is very little time but it may hamper the market situations otherwise. It could fail to get approval and the builder could lack behind severely. This gives the builders time to look for the betterment of their projects and it helps others get concrete proof of work.
The act also grants authority to a committee for “The Authority may, on receipt of a complaint or suo motu in this behalf or on the recommendation of the competent authority, revoke the registration granted.” this means the established committee to challenge the Real-estate builders and address the concerns of all the buyers irrespective of whoever the builder be. If the builder is doing any irresponsible work related to the project and found irresponsible, it will lead to severe punishment and a hefty penalty. This has been another positive point for these regulations.
“Upon lapse of the registration or on revocation of the registration under this Act, the Authority, may consult the appropriate Government to take such action as it may deem fit including the carrying out of the remaining development works by competent authority or by the association of allottees or in any other manner, as may be determined by the Authority” This clause gives the relevant authorities power to take action in regard of any mishap and distinguish it some other party or even take it under their regime.
Another clause states “No real estate agent shall facilitate the sale or purchase of or act on behalf of any person to facilitate the sale or purchase of any plot, apartment or building, as the case may be, in a real estate project or part of it, being the part of the real estate.” This doesn’t give the agents the power to broker the deals and properties, this way every buyer is saved from fraud and it contains the spread of misconception and false information. This has helped everyone in the system, the security is with the people and they can take certain and independent decisions.
Another milestone of this regulation is it does not let any buyer pay upfront for any property without getting into the agreement. The document of the agreement must specify all the clauses related to the sale and there should be no hidden agenda behind it. The seller should not take more than 10% of the total sum of the agreed amount, that too after getting into an agreement.
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All of the aforementioned points are a positive takeaway from this act. This gives the system an edge to perform better with time. It can be safely assumed that the act passed is a boon to the Real-estate sector.
A superior and highly experienced entrepreneur in the field of business for quite a long time now. Also, a philanthropist, author and public speaker who believes in working towards the overall well being and betterment of the society as a whole.