The Real Estate (Regulation and Development) Act, 2017 (RERA) which comes into effect from Monday gives teeth to buyers of residential properties and is likely to bring in the much-needed transparency in the real estate sector. The one big change that will come with the Act’s enforcement from May 1 is that real estate developers will not be allowed to take advances and booking amounts from customers in yet to be launched projects till they are registered with RERA. The Act says that the developers cannot do pre-sales or pre-launches of a project till the requisite permissions for the launch are in place. According to the current guidelines, developers have to register their under-construction projects along with all the relevant details with RERA by July 31. Some of the other conditions under RERA are that 70% of the money received from buyers, for a particular project, is to be kept in an escrow account, buyers will pay only on the basis of carpet area, project details will have to be updated quarterly on the RERA website and project accounts will have to be audited annually by a chartered accountant. In case of delays, the developer will have to pay interest to home buyers, among other conditions. However, the Act allows the developer to have some say as well. In case a customer makes three consecutive defaults in payments, the developer will have to give three weeks’ notice to the customer, and if no response is received, the developer can cancel the agreement. According to a Crisil note, a positive impact on the real estate sector at all-India level will be visible only towards the end of 2017, as many states are yet to notify the RERA rules.

(Financial Express)