The much-awaited Real Estate Act comes into force from tomorrow but only 13 states and UTs have so far notified rules under the Act which Union Minister Venkaiah Naidu said will enable only regulation of the sector and not “strangulation”.
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 today, 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.
“Given the importance of this legislation and pressing need to protect the interests of large number of buyers across the country, we took it seriously and began to push it. I have held several rounds of consultations with all stakeholders including consumer federations and real estate bodies and impressed upon them that the real estate sector…will significantly benefit from the regulation,” he added.
“I have assured all concerned that the Bill only enables regulation of the sector for the benefit of all and not strangulation,” he said adding “I only insist that the developers must fulfil their promises…simply adhere to the promises made in the advertisement.”
The minister said the government went gone beyond the recommendations of the select committee and further improved upon the earlier Bill.
“While the select committee recommended that 50 per cent of the money collected by the developers from buyers be deposited in a separate bank account to prevent diversion of money to other projects, we have increased this to 70 per cent.”
“We have made the Real Estate Act applicable to projects with minimum plot size of 500 sq metres or eight apartments while the proposal in UPA Bill was to apply it to plot size of 4,000 sq metres and the standing Committee recommended its application to plot size of 1,000 sq mt or 12 apartments.
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.”