Builders will have to deposit 70% funds for project completion
The Ministry of Housing and Urban Population (HUPA) has notified new rules of the Real Estate Act 2016 for the five Union Territories without Legislature — Andaman & Nicobar Islands, Dadra and Nagar Haveli, Daman & Diu, Lakshadweep and Chandigarh.
The government had recently notified that real estate developers will now have to provide additional information to buyers about ongoing projects and deposit 70 per cent of the unused funds in a separate bank account to ensure project completion. These have been stipulated in the Real Estate (Regulation and Development) (General) Rules, 2016, that was notified by the Ministry of Housing and Urban Population on October 31.
These rules were required to be notified on October 31, as stipulated in the Real Estate (Regulation & Development) Act, 2016, that was partly brought into effect on May 1 this year. But except HUPA in Union Territories and Gujarat, no other states have notified it yet.
It has been known that for Delhi, similar rules have to be notified by the Ministry of Urban Development, which will take a couple of more months, The Hindu quoted a Ministry official as saying. The Ministry can also consider using rules of the Ministry of HUPA as a template.
The Economic Times in its report claimed from its government sources that Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu have finalised the rules, but have not notified them. However, Haryana has designated the chief secretary as an interim real estate regulatory authority for addressing disputes but has not notified the Act.
It has also been reported that the buyers will be able to get some relief under the rules only after the proposed Real Estate Regulatory Authority is formed, for which the expected deadline is April 30, 2017. The Hindu, in its report, said that a Ministry spokesperson has informed about some changes which have been made in the Draft Rules placed in the public domain three months ago, which now incorporates some suggestions from consumer associations and real estate bodies.
According to the rules notified on October 31, Monday regarding ongoing projects that have not received completion certificate in specified time, developers will have to make public the original sanctioned plans and changes made, total amount collected from allottees, money used, original timeline for completion and the period within which the developer undertakes to complete the project.