Real Estate Act comes into force
02 May 2016
The Real Estate (Regulation and Development) Act, 2016, which is expected to bring some order to the vastly unregulated real estate business, comes into force tomorrow, ie, 1 May 2016, setting in motion the process of making necessary operational rules and creation of institutional infrastructure for protecting the interests of consumers and promoting the growth of real estate sector.
The new rules are expected to create an environment of trust, confidence, paving way for credible transactions and efficient and time bound execution of projects.
Ministry of housing and urban poverty alleviation has notified 69 of the total 92 sections of the Act on Wednesday this week bringing the Act into force from 1 May 2016.
The Act is the culmination of eight years of efforts, after a proposal for a law for real estate was first mooted at the National Conference of Housing Ministers of States and Union Territories in January 2009.
As per the notification announcing the commencement of the Act on 1 May 2016, rules under the Act have to be formulated by the central and state governments within a maximum period of six months, ie, by 31 October 2016 under section 84 of the Act. Ministry of HUPA would make rules for union territories without legislatures while the ministry of urban development would do so for Delhi.
As per section 84 of the Act, ''The appropriate government shall, within a period of six months of the commencement of this Act, by notification, make rules for carrying out the provisions of this Act.''
Early setting up of Real Estate Regulatory Authorities with whom all real estate projects have to be registered and appellate tribunals for adjudication of disputes is the key for providing early relief and protection to the large number of buyers of properties.
Section 20 of the Act says, ''The appropriate government shall, within a period of one year from the date of coming into force of this Act, by notification establish an authority to be known as the Real Estate Regulatory Authority to exercise the powers conferred on it and to perform the functions assigned to it under this Act''. These Authorities decide on the complaints of buyers and developers in 60 days time.
Section 20 of this Act also empowers appropriate governments to designate any officer, preferably secretary of the department dealing with housing, as the interim regulatory authority until the establishment of regulatory authority under the provisions of the Act.
Regulatory authorities, upon their constitution get three months time to formulate regulations concerning their day-to-day functioning under section 85 of the Act.
Similarly, under section 43 of the Act, real estate appellate tribunals shall be formed within a maximum period of one year, ie, by 30 April 2017. These fast track tribunals shall decide on the disputes over the orders of regulatory authorities in 60 days' time.
Under the directions of the minister of housing and urban poverty alleviation M Venkaiah Naidu, a committee chaired by secretary (HUPA) has already commenced work on formulation of model rules under the Act for the benefit of states and UTs so that they could come out with rules in quick time besides ensuring uniformity across the country. The ministry will also will come out with model regulations for regulatory authorities to save on time.
The time limits of six months for formulation of rules and one year for setting up regulatory authorities and appellate tribunals are the outer limit and the states willing to act quickly could do so and the ministry of housing and urban poverty alleviation would notify the remaining sections of the Act to enable relief to the buyers under the Act as quickly as possible, as desired by M Venkaiah Naidu.
The remaining 22 sections to be notified relate to functions and duties of promoters, rights and duties of allottees, prior registration of real estate projects with real estate regulatory authorities, recovery of interest on penalties, enforcement of orders, offences, penalties and adjudication, taking cognizance of offences, etc.