The real estate sector plays a catalytic role in fulfilling the need and demand for housing and infrastructure in the country. While this sector has grown significantly in recent years, it has been largely unregulated, with absence of professionalism and standardisation and lack of adequate consumer protection. Though the Consumer Protection Act, 1986 is available as a forum to the buyers in the real estate market, the recourse is only curative and is not adequate to address all the concerns of buyers and promoters in that sector. The lack of standardisation has been a constraint to the healthy and orderly growth of industry. Therefore, the need for regulating the sector has been emphasised in various forums.
The RERD Act aims to safeguard and provide effective consumer protection, uniformity and standardization of business practices and transactions in the Real Estate Sector. The Act provides for establishment of Real Estate Regulatory Authority for regulation and promotion of real estate sector and to ensure sale of plot, apartment or building, as the case may be, in an efficient and transparent manner and to protect the interest of consumers in real estate sector and establish the Real Estate Appellate Tribunal to hear appeals from the decisions, directors or orders of the Authority. RERD Act will ensure greater accountability towards consumers, and significantly reduce frauds and delays as also the current high transaction costs. It attempts to balance the interests of consumers and promoters by imposing certain responsibilities of both. It seeks to establish symmetry of information between the promoter and purchaser, transparency of contractual conditions, set minimum standards of accountability and a fast track dispute resolution mechanism. The Act will induct professionalism and standardisation in the sector, thus paving the way for accelerated growth and investments in the long run.
Bill 2013 was introduced in the Rajya Sabha on 14th August, 2013 with the objects of bringing in Professionalism and Standardization and Accountability towards consumers in the Real Estate Sector.
The bill got approval of the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016 and by Act 16 of 2016 dt: 26/03/2016, The Real Estate (Regulation & Development) Act 2016 ( RERD ACT), came into force with effect from 01/05/2016 and 69 out of 92 sections viz., Section 2, Sections 20 to 39, Sections 41 to 58, Sections 71 to 78 & Sections 81 to 92, came into force from 01/05/2016.
The remaining sections have come into force on 01/05/2017.
E Suhail Ahmed Legal Consultant
Vinay Thyagaraj Financial Consultant