- Establishment of state level regulatory authorities- Real Estate Regulatory Authority (RERA)- the Act provides for State governments to establish more than one regulatory authority
Functions:
- Register and maintain a database of real estate projects; publish it on its website for public viewing,
- Protection of interest of promoters, buyers and real estate agents
- development of sustainable and affordable housing,
- Render advice to the government and ensuring compliance with its Regulations and the Act
- 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: Developers needs to keep 70% of the money collected from a buyer in escrow account to meet the construction cost of the project.
- Liability: A developer’s liability to repair structural defects- 5 years
- Penal interest in case of default: Both promoter and buyer are liable to pay 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
- Clearly defines Carpet Area as net usable floor area of flat. Buyers will be charged for the carpet area and not super built-up area.
9. 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.