Real Estate under RERA Regime.
After 4 months of implementation of RERA, Builders and Developers are in dilemma of legal compliances relating to RERA. THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 has altered the Real Estate Business altogether and it is a big challenge for professional to help their client with the same. In this Article we are going to deal with the basic question of how the working style and business practices going to get affected under RERA regime.
Following are the key points for understanding the impact:
- No Real Estate promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project.
- A promoter cannot even market or advertise the project without registration. This means there cannot be pre launching or pre booking for project which can be a big financial issue for some.
- No Real Estate promoter can accept more than 10% of sales consideration for the buyer without getting into an Agreement of sale.
- 70% of the amounts realised for the real estate project from the allottees has to be kept in a separated Bank account to cover the cover the cost of construction and the land cost and shall be withdrawn only after getting a signed certified by an engineer, an architect and a chartered accountant in practice.
- Get his accounts audited within six months after the end of every financial year by a chartered Accountant in practice and shall produce a statement of accounts duly certified and signed. Fact that the amounts collected for a particular project has been utilised for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project, has to be audited by a chartered Accountant in practice along with other compliances.
- The Builder/Developer has to make sure that Cancellation and refunds are handled in accordance with the Act.