Issuing the regulations and enforcing the legislation, the Ministry of Housing and Urban Poverty Alleviation has notified the Real Estate (Regulation and Development) Act, 2016, in its entirety setting a three-month deadline starting May 1 for all state governments to appoint a Real Estate Regulatory Authority (RERA). So far, only 13 states and union territories have notified rules under RERA while another 15 have prepared draft rules.
As per the regulation, builders, of both new as well as ongoing projects (the ones that have not received completion certificate), will have to mandatorily register their project with the Authority within this period. The three-month deadline is also applicable to real estate agents who also have to register themselves with the Authority.
Under the Act, builders have to deposit 70 per cent of the collected amount in an escrow account to ensure that money is not diverted from one project to another. There will be fines and penalties if the developer does not adhere to delivery guidelines. Besides, promoters will not be able to change a project's design without buyers' consent, and carpet area will carry a uniform definition - a common reason for builder-buyer disputes.