The real estate sector has grown in recent years but has largely been unregulated from the perspective of consumer protection. Though consumer protection laws are available, the recourse available therein is only curative, but not preventive. This has affected the overall potential growth of the sector due to the absence of professionalism and standardization.
The functions of the Authority include promotion of the real estate sector, advocacy by creating awareness, imparting training about laws relating to the real estate sector and policies, regulating and registering real estate developers and agents, maintaining the website, ensuring compliance of obligations cast upon real estate developers and other such functions provided under the Act and State Rules.
The Act brings stakeholders like consumers, real estate developers, and real estate agents- under the purview of the Authority in order to ensure compliance with the Act by the stakeholders. The Act empowers the States to introduce their own rules to accommodate the need of their own unique geographies without diluting the provisions of the Act. The Act also provides for the appropriate Government of two or more States or Union Territories (UTs) to establish a single Authority.
- Is The Act Applicable To Both Residential And Commercial Real Estate?
The Act is applicable to both residential and commercial real estate.
- Is The Act Covering Ongoing / Incomplete Real Estate Projects As Well?
There is no distinction between an ongoing/incomplete project and both types of projects are covered under the ambit of the Act. Further, any new projects to be launched by the real estate developers are also covered under the ambit of the Act.
- Which Projects Are Exempted From The Ambit Of The Act?
As per the relevant provisions of the Act, the following projects do not require registration under the Act:Where the area of the land proposed to be developed does not exceed five hundred square meters, or the number of apartments proposed to be developed does not exceed eight inclusive of all phases: Provided that, the appropriate Government considers it necessary, it may reduce the threshold below five hundred square meters or eight apartments, as the case may be, inclusive of all phases, for exemption from registration under the Act.
Where the real estate developer has received a completion certificate for a real estate project prior to the commencement of the Act.
For the purpose of renovation or repair or re-development which does not involve marketing, advertising selling, or new allotment of any apartment, plot, or building, as the case may be, under the real estate project.
- What Are The Actions To Be Taken By The Authority After An Application Has Been Submitted For Project Registration?
The Authority set up by every State, is required to either grant registration or reject the application within 30 days of its submission. If the application is not in conformation with the guidelines and Authority finds it worth rejecting, it is mandatory that the applicant/real estate developer be heard in the matter before rejection.
- What Is The Validity Period For A Particular Project Registration?
The registration will be valid for a period specified by the real estate developer in the application form submitted to the Authority. Hence, the real estate developer is accountable to adhere to the timelines otherwise he risks suffering losses/ penalties.
- Is There A Common Platform To Access The Details Of The Registered Real Estate Developers And Their Projects?
Each State has its own platform which provides access to the details of registered real estate projects, the real estate developers, and the real estate agents. For example, a consumer can view the projects registered in Gujarat on www.gujrera.gujarat.gov.in.
- What Is The ‘Agreement For Sale’ And Is It Binding On The ‘Real Estate Developer’ And The ‘Buyer/Consumer’?
The agreement entered between the developer and the consumer/buyer for the sale of the apartment/flat/unit in the developer’s project is called the Agreement for Sale. Some of the States have specified through their rules the ‘Agreement for Sale’ to be entered between the real estate developer and the buyer/consumer. The Agreement for Sale is binding on the parties, however, internal flexibility may be provided in the Agreement for Sale, for the determination/insertion of other provisions as may be required.
- When Is The Agreement For Sale Required To Be Registered Under The Act?
Agreement for Sale between the real estate developer and the buyer/consumer is to be registered under the Act before the buyer/consumer makes payment of a sum of more than 10% of the consideration.
- Are There Norms On Advertisements Or Promotions?
Yes, there are norms provided under the Act. Every real estate developer is responsible for the veracity of all information contained in the advertisement and the prospectus. In case any loss is sustained by the buyer/consumer due to false information contained therein, the promoter is liable to make good the loss sustained due to the same. Further, all advertisements/prospectus issued or published by the real estate developer shall prominently mention the website address of the Authority, wherein all the details of the registered project have been entered and include the registration number obtained from the Authority and such other matters incidental thereto.