5 things home buyers should know about real estate act

Over 76,000 companies operating in the real estate sector

GN Bureau | May 1, 2017


#Real Estate Act   #Real Estate Bill   #Housing   #Real Estate   #Home Buyers  


The Real Estate (Regulation and Development) Act, 2016 came into force on Monday, promising to provide relief to thousands of home buyers who have put their life savings in projects that are far from complete.

Till March last year, there were 76,044 companies operating in the real estate sector.

As per industry information, between 2011 and 2015, real estate projects in the range of 2,349 to 4,488 projects were launched every year. There were as many as 17,526 projects with a total investment of Rs.13.70 lakh crore in 27 cities. About ten lakh buyers invest every year with the dream of owning a house.

Here are 5 elements of the act that home buyers need to know.

1. 70% of the funds collected from buyers have to be deposited in a separate bank account in case of new projects and 70% of unused funds in case of ongoing projects;


2. Projects with plot size of minimum 500 sq.mt or 8 apartments shall be registered with Regulatory Authorities;


3.Both developers and buyers to pay the same penal interest of SBI’s Marginal Cost of Lending Rate plus 2% in case of delays;


4. Liability of developers for structural defects for five years; and


5. Imprisonment of up to three years for developers and up to one year in case of agents for violation of orders of Appellate Tribunals and Regulatory Authorities.
 

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