Real estate sector is highly unregulated where black money find its place. Major issues with real estate sector are lengthy approval process for project clearances, lack of clear land titles, diversion of funds received by the developer towards one project to more lucrative ones. Changing of layouts by the developer and legal disputes between buyers and sellers.
To address this issues GOI came up with real estate ( regulation and development) act, 2016. The major features of the act are as follows:
- The Act which is envisaged to regulate both commercial and residential real estate projects, seeks to set up a state level regulatory authority called Real Estate Regulatory Authority (RERAs) for regulation and promotion of the real estate sector.
- The Act makes it mandatory for uploading the details of a Real Estate project on the website of the RERAs. Real estate agents also need to register with the RERAs.
- The Act also makes it mandatory for the builders to put 70% of the amount collected from buyers in a separate bank account. This must only be used for construction of the project. However, the state government can alter this amount to less than 70%.
- The Act also seeks to establish fast track dispute resolution mechanisms for settlement of disputes through adjudicating officers and Appellate Tribunal.