NAREDCO welcomes the General Rules for Real Estate (Regulation and Development) Act 2016 notified by Ministry of Housing and Urban Poverty Alleviation

Ministry of Housing & Urban Poverty Alleviation, Government of India, has notified Real Estate (Regulation and Development) General Rules 2016 for the implementation of Real Estate Regulation Act (RERA) in the Union Territories and also notified the guidelines for setting up the Regulatory Authority. National Real Estate Development Council (NAREDCO), established under the aegis of Ministry of Housing and Urban Poverty Alleviation (HUPA), Government of India, has welcomed this move and takes pride in congratulating the Hon’ble Minister of Housing and Urban Poverty Alleviation, Shri M. Venkaiah Naidu for sticking to the time schedule promised by him. NAREDCO feels that implementation of RERA will lead to transparency and fair business practices in the real estate sector.

Rajeev Talwar, Chairman, NAREDCO, said, “The rules will provide for regular audit to verify the claims of builders regarding use of funds collected from builders. These will surely help to regulate real estate sector and protect consumers’ interest. As a real estate body, NAREDCO thanks Shri M Venkaiah Naidu, Hon’ble Minister of Housing and Urban Poverty Alleviation for bringing such welcoming rules and regulation of real estate sector.”

What more?  In pursuance of the assurance given by the Hon’ble Minister, Shri M Venkaiah Naidu, RERA Rules prohibit any discrimination in sale of properties on any ground.

Welcoming the RERA Rules, Parveen Jain, President, NAREDCO, viewed certain provisions concerning disclosure of balance sheet, IT return, PAN details, etc. not good in business interest as also the contradiction in certain provisions and actual practices, and hoped the going forward impracticalities will be suitably addressed.

As per the rules, developers will now have to provide additional information like original sanctioned plans, changes made later and fresh timelines for completion of ongoing projects to buyers and deposit 70 per cent of the unused funds in a separate bank account to ensure project completion. The rules will be applicable to five Union Territories without Legislature — Andaman & Nicobar Islands, Dadra and Nagar Haveli, Daman & Diu, Lakshadweep and Chandigarh. For Delhi, similar rules will be notified later by the Ministry of Urban Development.

Further, as per the rules, for ongoing projects that have not received completion certificate in specified time, developers have been asked to make public the original sanctioned plans and changes made, total amount collected from allottees, money used, original timeline for completion and the period within which the developer undertakes to complete the project. The rules also state that developers will have to refund or pay compensation to the allottees at Interest Rate equal to SBI’s highest Marginal Cost of Lending Rate plus 2 per cent.

Thus, overall, the Real Estate (Regulation and Development) Act, 2016 (RERA) aims to bring transparency and accountability in the sector. It remains to be seen that what will be the outcome of the new changes. However, going forward, it can be believed that the RERA will definitely change the general perception about the real estate sector.