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21 mins ago · 3 min read

The developer will pay 10.9% interest if possession is delayed!

Real estate is one of the most recognized sectors in India. It is the second largest employer and it comprises with four sub-sectors including retail, hospitality, residential and commercial. There are numerous property websites in India which have developed and provided various residential and commercial properties. The residential property is expected to contribute 5–6 percent to the country’s Gross Domestic Product (GDP). It is expected that the Indian Real Estate Market touch US$180 billion by 2020. open in browser PRO version

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Recently, Union Government introduced rules on the Real Estate Regulation Act (RERA) that allows the buyers who have invested in real estate properties to secure interest at 10.9% per annum for any delay of projects.

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Here are some important points that need to be discussed: • Developers will have to deposit 70% of the fund collected on the ongoing open in browser PRO version

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projects though it will remain as unused, and a separate bank account within three months of applying for registration will be created.

• Interest Rate is fixed at 2% above the SBI’s marginal cost of funds.

• After the disclosure of new rules, every developer will have to register themselves with the state regulator.

• If buyers pursue a refund then it will be eligible for a refund of the whole amount at the same rate and the developer will have to repay the amount within 45 days of the claim being made by the buyer.

• This law is also compulsory for buyers to pay interest at the rate of 10.9% on dues which are raised by the developers of the project. It will be a major release for buyers who have to shell out more than 15% interest for delayed payments currently.

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• Under this law, if anyone files a complaint against any developer who has diverted funds which were collected from buyers then regulator would be obliged to take action against the developer and pass judgment within 60 days.

The problems faced by the buyers is that most of them have been waiting for their homes for up to 10 years, but this new rule states that the developer of current projects should specify the scheduled completion date while registering the project with the regulator.

These rules will be applicable to different cities which include Dadra and Nagar Haveli, Lakshadweep, Andaman and Nicobar Islands, Daman and Diu and Chandigarh. The Union Urban Development Ministry is also working on similar rules for Delhi.

As the Centre is notifying the rules, UT and States are anticipated to follow the suit soon. As per the provision of RERA, 2016, the regulatory authority is expected to put in place by April 30, 2017, which is the day before the coming of open in browser PRO version

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the full act into effect. A temporary regulatory authority has been set up bt Chandigarh that is the first in India to do so.

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