The Cabinet also decided to exclude realty projects that are complete 60% or more. All other real estate projects come under the rule’s purview, and the rules are expected to be notified in the next couple of days.
Law minister TB Jayachandra said further details like the cut-off date will be clarified when the rules are notified. He also said the guidance value will be taken as the cost of the project.
The Cabinet discussed the rules already made in Tamil Nadu, Gujarat and Rajasthan, and the law minister said the state has adopted the Rajathan model.
All housing projects including those developed by private builders as well as the Karnataka Housing Board and Bangalore Development Authority will come under the purview of real estate regulatory authority (RERA).
The Real Estate (Regulation & Development) Act, 2016, came into effect from May 1, ending the nine-year long wait.The Act provides for regulating the real estate sector involving over 76,000 companies across India. The law enables buyers to enforce their rights and seek redressal of grievances before the authority.
The law stipulates (1) Depositing 70% of the funds collected from buyers 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 eight apartments shall be registered with regulatory authorities. (3) Both developers and buyers 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 and buyers for violation of orders of Appellate Tribunals and Regulatory Authorities.
According to the government of India, at the time of passing of the Bill in Rajya Sabha in March last year, there were 76,044 companies were operating in the real estate sector including 17,431 in Delhi, 17,010 in West Bengal, 11,160 in Maharashtra, 7,136 in Uttar Pradesh, 3,054 in Rajasthan, 3,004 in Tamil Nadu, 2,261 in Karnataka, 2,211 in Telangana, 2,121 in Haryana, 1,956 in Madhya Pradesh, 1,270 in Kerala, 1,202 in Punjab and I,006 in Odisha.