BENGALURU: The Real Estate (Regulation and Development) Act will be a blessing in disguise for home buyers, including those who have still not got possession of their properties. According to the Act, every ongoing and under-construction project is supposed to come under the regulator's ambit.
To operationally cover an ongoing project, the developer has to first get it registered with the regulatory authority of the state, and will be given three months' time from the date of commencement of the Act, to get it registered. Registration is mandatory for all commercial and residential real estate projects where the land is over 500sqm or includes eight apartments. Failure to do so will attract a penalty which may be up to 10% of the project cost, and a repeat offence could land the developer in jail.
The developer will have to place 70% of the money collected from a buyer in a separate account to meet the construction cost of the project. This will put a check on the general practice by a majority of developers to divert the buyer's money to start a new project, instead of finishing the one for which money was collected. This will ensure that construction is completed on time.
As has been seen in the recent past, buyers of apartments which are typically offered for sale before the launch of the project often get ensnared. But not any more. Under the Act, every such phase will be considered a standalone real estate project, and the promoter will have to obtain registration under this Act for each phase separately.
The bill also seeks to impose strict regulations on the promoter and ensure that construction is completed on time. Its purpose is to ensure that the buyer gets the property as per the specifications that he had been promised. Carpet area has to include usable spaces like kitchen and toilets, imparting a clarity which was not the case now.