Real Estate Act comes into force from May 1

The much-awaited Real Estate Act comes into force from May 1, with a promise of protecting the right of consumers and ushering in transparency.

The Real Estate Regulation and Development Act comes into force 9 years after it was first mooted. PM Narendra Modi's personal interest has made it a reality now.
It has been made more effective, even going beyond the Select Committee's report. The Act forges a happy, mutually beneficially alliance between buyers & developers.

Rights & duties of buyers and promoters are now clearly defined.
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 May 1.

Under the rules, it is mandatory for the states and UTs to set up the authority. This Authority will address redressal of grievances against any builder. Some of the major provisions of the Act, include depositing 70 per cent of the funds collected from buyers in a separate bank account for construction of the project. This will ensure timely completion of the project as the funds could be withdrawn only for construction purposes.

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.