RERA
- October 11, 2020
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Subject: Legislations
Context: Tamil Nadu Real Estate Regulatory Authority (TNRERA) has ruled that the provisions of the RERA Act are in addition to and not in derogation of other laws.
Concept:
- Real Estate Regulatory Authority (RERA) act seeks to protect home-buyers as well as help boost investments in the real estate sector by bringing efficiency and transparency in the sale/purchase of real estate.
- It establishes Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute resolution.
Key Provisions of Real Estate Regulation Act
- Establishment of state level regulatory authorities– Real Estate Regulatory Authority (RERA): The Act provides for State governments to establish more than one regulatory authority for promotion and regulation of the sector.
- Establishment of Real Estate Appellate Tribunal- Decisions of RERAs can be appealed in these tribunals.
- Mandatory Registration: All projects with plot size of minimum 500 sq.mt or eight apartments need to be registered with Regulatory Authorities.
- Deposits: Depositing 70% of the funds collected from buyers in a separate escrow bank account for construction of that project only.
- Liability: Developer’s liability to repair structural defects for five years.
- Penal interest in case of default: Both promoter and buyer are liable to pay an equal rate of interest in case of any default from either side.
- Cap on Advance Payments: A promoter cannot accept more than 10% of the cost of the plot, apartment or building as an advance payment or an application fee from a person without first entering into an agreement for sale.
- Defines Carpet Area as net usable floor area of flat. Buyers will be charged for the carpet area and not super built-up area.
- Punishment: 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.