All Sections Of Real Estate Law Come Notified
Updated on April 20, 2017:
As India gears up to implement the new law on May 1, Ministry of Housing and Poverty Alleviation has notified the remaining sections of the Real Estate (Regulation & Development) Act, 2016. Section 2, sections 20-39, sections 41-58, sections 71-78 and sections 81-92 of the law were notified with effect from May 1 last year. The sections notified now primarily talk about real estate developers' functions responsibilities and specified punishment if they fail to meet the required norms.
The now notified Section 40, for instance, talks about the punishment a developer or a real estate advisor of a home buyer will face in case of his failure to meet provisions of the sale agreement.
"If a promoter or an allottee or a real estate agent, as the case may be, fails to pay any interest or penalty or compensation imposed on him, by the adjudicating officer or the Regulatory Authority or the Appellate Authority, as the case may be, under this Act or the rules and regulations made thereunder, it shall be recoverable from such promoter or allottee or real estate agent, in such manner as may be prescribed as an arrears of land revenue," reads the Section.
Following a notification from the housing & urban poverty alleviation ministry, the Real Estate (Regulation and Development) Bill, 2016, became an Act on May 1. With this, 69 of the 92 Sections of the legislation came into force. The much-awaited law, which is expected to bring transparency and accountability into the sector, had received Parliament's approval in March this year. Now, to frame the ground rules, the Centre and states will work together and complete the task within six months, as laid down in Section 84 of the Act.
A Bill becomes an Act after it has received the approval of both Houses of Parliament – the Lok Sabha and the Rajya Sabha – and the President.
PropGuide looks at the key sections that came into force from May 1 and estimates their impact on the real estate sector:
What's in a name?
Chapter 1, which consists of two sections, defines several real estate terms. Due to the lack of clear definitions, all sector stakeholder had been facing a lot of trouble. Now, that would soon be history.
Are you online?
Chapter 2, that starts from Section 3 and runs up to Section 10, deals with registration of real estate projects and agents. While it is crucial, the registration will begin only after the authority is set up. Once in force, this part will bring a lot of relief to home buyers, as all the details of a project will be just a click away. Real estate advisors will also get an opportunity to build a better image for themselves and act as a key stakeholder.
Chapter 3 (Sections 11-18) deals with functions and duties of promoters. The chapter makes it mandatory for developers to be registered with the Real Estate Regulatory Authority (RERA) and share all their project details on the webpage. Developers with clean image and better records will finally get to reap the benefits, as non-serious players will not be allowed to operate.
Chapter 4, which has only one section (18), explains the rules and rights of home buyers. The ground rules will go a long way in empowering the consumer.
Who's the boss?
In Chapter 5, Section 20 mandates that RERA be set up within a year from the date of the Act coming into force. This means RERA will have to come into being by April 30, 2017. The body will have a government-appointed chairperson, along with two full-time members, for a term of five years. The chapter, running from Section 20 to 40, talks at length about the many responsibilities of RERA.
The guiding principles
In Chapter 6, Section 41 and 42 elaborate on the Central Advisory Council and its functions. The Centre's housing minister will be the ex officio chairperson of this council, which will have members from other central ministries and states on a rotational basis. This will give states across the country a say in the overall process. The council will also have a role in implementing the Act.
Putting things in order
Chapter 7 (Section 43-58) talks about setting up of the Real Estate Appellate Tribunal within a year after the Act coming into force. This means the judicial body will come into force along with RERA. India's courts have been weighed down by long-pending land-related disputes. This authority will ensure nothing remains pending, as the Act mandates the tribunal has to pass an order on a dispute within 60 days.
…So shall you reap
Chapter 8, running from Section 59 to 72 lays down the ground rules for offences, penalties and adjudication. For example, Section 59 says that a developer will be liable to pay as a penalty 10 per cent of his project's total cost, if he fails to register himself with RERA. In case of any non-compliance, the developer may have to serve a jail term, apart from paying 10 per cent of his project's total estimated worth as penalty. Besides slapping other charges on developers for any default, the Act also talks about hefty penalties on real estate advisors in case of any wrongdoing. What's more? Home buyers will also be punished in case of any non-compliance of orders laid down under the Act.
While Chapter 9 of the Act (Sections 73-78) deals with the finance, audit and reports, Chapter 10 (Sections 79-92) deals with several miscellaneous issues.