It has been over six years since the Real Estate (Regulation and Development) Act, 2016 (RERA) has been implemented. It has established a robust framework for safeguarding the rights of homebuyers. However, there are key aspects that remain ambiguous. One such is the structural defect liability of the promoter.
This article will give details about the Real Estate (Regulation & Development) Act, 2016 Structural Defects within the context of the IAS Exam
About Real Estate (Regulation and Development) Act (RERA)
- RERA, 2016, is a key regulation with the purpose of regulating the real estate industry.
- It aims to make transactions fair and transparent while also empowering and protecting property consumers.
- The RERA Act was passed under the Concurrent List of the Indian Constitution‘s Entries 6 and 7 (which deal with contracts and the transfer of property).
- RERA went into effect in May 2017 after being passed in March 2016.
Main Provisions of the RERA Act
- Necessary registration: In accordance with the central statute, every real estate project that is going to be constructed over 500 square meters or that includes more than 8 flats must register with the state’s RERA.
- Providing guidance to the government and enforcing adherence to its rules and the law
- Real estate Appellate Tribunals were established, and decisions made by RERAs may be challenged there.
- Deposits: To cover the project’s building costs, developers must retain 70% of the money they receive from buyers in an escrow account, which is a temporary pass-through account kept by a third party.
- The developer is responsible for fixing structural flaws for a period of five years.
- Limit on Advance Payments: Without first entering into an agreement for sale, a promoter may not accept as an advance payment or application fee from a person more than 10% of the price of the plot, apartment, or building.
- Area of carpet over heavily built-up: Carpet Area is defined as the net useable floor area of the apartment. The carpet area will be charged for, not the super-built-up area.
- Penalties for non-compliance include up to three years in prison for developers and up to one year in jail for agents and purchasers who disobey regulatory authorities’ and appellate tribunals’ orders.
Way forward:Â
- The central government and each state must work together to settle any disputes resulting from the implementation of RERA.
- Governmental organizations need to be held responsible for the delay in issuing clearances.
- States shouldn’t weaken the RERA’s rules. All state legislation should continue to contain provisions outlining how breaches will be punished.
- Establishing a strong IT infrastructure is necessary for project monitoring and swift resolution of complaints.
- The government has already set up Central Advisory Council (CAC) for the effective implementation of RERA. The range of CAC’s responsibilities should be expanded to include providing advice to state agencies on matters relating to RERA compliance.
- Ensure the sector has a steady source of funding; developers should have access to endowment funds.
RERA’s Structural Defects (UPSC Notes):- Download PDF Here
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