The Centre on Monday finalised the rules under the landmark realty law that will not only protect new homebuyers from unscrupulous developers but also safeguard the interest of allottees of ongoing projects.
While in five Union territories --- Chandigarh, Lakshwadeep, Andaman & Nicobar, Dadra and Nagar Havelli, Daman & Diu — the Real Estate (Regulation and Development) Act will become operational from Tuesday after the Centre notified the rules, states can emulate them while framing their own rules. All states missed the six-month target that expired on Monday to frame their rules.
The central rules have cleared the opacity around ongoing projects that have not received completion certificate till now. While registering with the regulator, developers of all such project will not only have to make public the original sanctioned plans with specifications and changes made later but the total amount collected from allottees and the money that has been used already.
Besides, within three months of applying for registration of a project the developer will also have to deposit 70 % of the amount collected that has not been used in a separate bank account for ensuring completion of such ongoing projects.
Registration of projects
To incentivise developers to get their project registered with the realty regulator, the Centre has reduced the fee by half. The fee has been reduced to Rs 5 per sq.mt for up to 1,000 sq.mt area and Rs 10 per sq.mt beyond this limit subject to a maximum of Rs 50 lakh per project.
Interest to be paid in case of default
In case of default, promoter and allottee will have to repay with same rate of interest, which will be higher by two percent of SBI’s benchmark interest rate.
The realty law makes it mandatory for all such builders -- developing a project where the land exceeds 500 square metre -- to register themselves with the regulatory authority before launching or even advertising their project Failure to do so will invite a penalty of upto 10 % of the project cost. For subsequent violation, developers will land up in jail for three years.