It was passed in 2016 with the objective of ensuring regulation and promotion of real estate sector in an efficient and transparent manner and to protect the interest of home buyers.
The core features of the act are as following –
It regulates transactions between buyers and promoters of real estate projects.
It provides for establishment of state level regulatory authorities called Real Estate Regulatory Authorities (RERAs).
Real estate projects need to be registered with RERAs. Promoters cannot book or offer these projects for sale without registering them. Real estate agents dealing in these projects also need to register with RERAs.
The promoters must upload details of the project on the website of the RERA. These include the site and layout plan, and schedule for completion of the real estate project etc.
70% of the amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project only. The withdrawals have to be certified by architects, CA and project engineers.
The Act stipulates that the appropriate government should establish the Real Estate Appellate Tribunal by May 01, 2018. Adjudicating officers, Real Estate Authorities and Appellate Tribunals shall dispose complaints within 60 days.
As per latest estimates (January, 2019), 28 States/UTs have notified Rules under RERA and established Real Estate Regulatory Authorities and 21 States/UTs have established Real Estate Appellate Tribunals. More than 37,000 Real Estate Projects and 28,000 Real Estate Agents have been registered under different Real Estate Regulatory Authorities across the country.
The major controversy surrounding the act is its inability to create equal footing as medium/small builders or projects might face problems due to extreme provisions of the Act like 70% amount needs to be deposited in escrow account etc.
