The government has revealed draft regulations mandating that developers compensate buyers with an interest rate of 11.2% for any delays in delivering key handovers within the promised timeframe. This initiative aims to ease concerns for home buyers.
According to the new stipulations, any projects that are either unfinished or still under construction will be required to register with the Real Estate Regulatory Authority (RERA) within three months of the announcement of these rules across various states and Union Territories. Builders must disclose accurate details regarding project timelines, amenities provided, total square footage, and abide by the draft regulations, which are open for public commentary until July 8.
Furthermore, grounds for potential registration cancellation include any form of misrepresentation, which may involve delays in project delivery, alterations to layout or plans, increases in the size of units, or the addition of new towers without the consent of at least 70% of current residents. In such scenarios, the regulatory authority could take decisive actions, including the involvement of external agencies to expedite the project's completion, contingent on the approval of the buyers' association.
A report from Times of India highlighted that the proposed rules include a 'compounding' penalty option, allowing builders to evade jail time for infractions imposed by the authority. Developers have expressed apprehension, suggesting that if these rules were to be applied to ongoing construction projects, the industry might face severe setbacks, leading to further delays. Getamber Anand, the President of the Confederation of Real Estate Developers Association of India, noted that projects initiated before 2012 that remain unfinished would be deemed offenders under the draft regulations, obligating developers to repay buyers at the specified interest rate should they request refunds.
In light of the fact that real estate regulation falls under state jurisdiction, each state must formulate its own rules and have them ratified within their respective assemblies. State governments are required to establish their unique regulations within six months of May 1, the date the Act was enacted. These updated rules are seen as a significant step toward protecting home buyers, pushing developers to complete projects more promptly.