The Real Estate (Regulation and Development) Act promises to bring in the much-desired transparency, accountability and efficiency in the real estate sector and the government has described the implementation of the Act as the beginning of an era where the consumer in king.
The government has brought in the legislation to protect home buyers and encourage genuine private players.
The Real Estate (Regulation and Development) Bill, 2016 was passed by Parliament in March last year and all the 92 sections of the Act come into effect from May 1.
However, only 13 states and UTs have so far notified the rules. The states that have notified the rules are Uttar Pradesh, Gujarat, Odisha, Andhra Pradesh, Maharashtra, Madhya Pradesh and Bihar.
The Housing Ministry had last year notified the rules for five Union Territories--Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, and Lakshadweep, while 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.
Speaking to reporters in Hyderabad on Sunday, Naidu said, "I am happy that the hard labour put in by the Narendra Modi-led Government to make this Act a reality (fructifies) on May Day.
This is a landmark legislation becoming a reality nine years after regulation of real estate sector was first mooted in 2008".
According to Naidu all efforts were made to delay this legislation from becoming a reality.
As against the original proposal of bringing only residential projects under the ambit of regulation, now it has been applicable to commercial projects also.
As per the assurance I gave to Parliament, the Act says that developers shall refund payments to buyers within 45 days of becoming due.
All the ongoing projects that have not received Completion Certificate and new projects shall be registered by developers within three months i.e by July end. This mandatory registration of projects with real estate authorities enables grievance redressal in case the builders fail to deliver what was promised at the time of launch of project, he said.
He said 13 States and UTs have already notified the Real Estate Rules as required under the Act.
Under the Act, the developers will now have to get the ongoing projects that have not received completion certificate and the new projects registered with regulatory authorities within 3 months from Monday.
The law also prescribes penalties on developers who delay projects. All developers are required to disclose their project details on the regulator's website, and provide quarterly updates on construction progress.
In case of project delays, the onus of paying the monthly interest on bank loans taken for under-construction flats will lie on developers unlike earlier, when the burden fell on home buyers, said real estate service provider JLL India CEO and Country Head Ramesh Nair.
Other highlight of the Act is imprisonment of up to three years for developers and up to one year in case of agents and buyers for violation of orders of appellate tribunals and regulatory authorities.