Connect with us

Regulations

The In And Out of RERA – A Thorough Perspective

Published

on

Real Estate Sector: The In And Out of RERA – A Thorough Perspective

The long-awaited Real Estate Regulation and Development Act (RERA) came into effect from May 1, 2017. The Act is considered as a revolutionary move in the real estate sector which will bring a new era for both buyers as well as developers. It will bring more transparency and will improve the functional efficiency of the industry. Maharashtra became the first Indian state to successfully implement RERA from May 1, 2017.

Major Highlights of MahaRERA

MahaRERA aims to bring more clarity in the real estate sector bridging the gap between buyers and developers. Some of the major highlights of MahaRERA are as follows:

1) No real estate project can be sold without registration with RERA.

2) The developers will have to keep 70% of project funds separate in a dedicated account.

3) In case of delays, both developers and buyers, have to pay the same penal interest of SBI’s Marginal Cost of Lending Rate (MCLR) plus 2%.

4) Developers cannot make any changes to plans, structural designs or specifications of their projects without approval from two-thirds of buyers.

5) A fast track state level tribunal called Real Estate Appellate Tribunal will be formed that will deal with complains. The tribunal will come with a decision within 60 days.

New Marketing Rules

The developers can continue to market their ongoing projects till July 31, 2017 but after the end of 90 days from the date of notification, developers won’t be able to market their projects. Until the developer registers under RERA, they won’t be able to promote, market, sell, offer for sale or invite anyone to purchase any plot, apartment or building.

New Advertising Rules

Only the projects which have received the Occupancy Certificate (OC) and other necessary clearances from Municipal body are allowed to advertise but they need to have MahaRERA ISI mark on their advertising campaigns – print ad, billboards, pamphlets, brochures etc. All marketing and advertising material needs to be uploaded on the RERA website after registration. Builders should clarify all details about carpet area, built-up area, super built-up area etc. before starting the project. This can be done through pamphlets, brochures or any other advertising campaign held in public. This will prevent any misleading information by developers.

Advantages to Developers

RERA is not against real estate developers instead it has been formulated to streamline the functioning of the real estate sector. Although it’s in early stages but it is in the best interest for real estate developers. Developers are subject to penalty in case of delay in the delivery of projects, however if the delay is due to external factors or if the builder is not responsible for the delay, then there are provisions to safeguard the developers and take action against those responsible. The real estate sector is a major contributor to the GDP, hence the objective of RERA is not to crush the supply side rather regulate the supply. There is no scope for un-reputed developers to continue their ill-practices in the real estate business. The goal is to give due respect to developers and transform the real estate industry as one of the most reputed sectors.

Future Of RERA

RERA will introduce systematic regulations that will benefit both developers and buyers ensuring smooth business experience. It is necessary that the Act is welcomed universally in the right spirit, making it the first stepping stone towards a progressive real estate industry. RERA will also boost the affordable housing movement in India.

Also Read:  How Will Home-Buyers Benefit From RERA

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Regulations

373 Maharashtra Cities To Fall Under PMAY Scheme

Published

on

By

The state of Maharashtra has added 232 cities to the existing 142 which makes it 373 cities under the Pradhan Mantri Awas Yojana Scheme (PMAY).

The officials at the housing department feel that this step will aid the government take up more projects under the PMAY scheme.

Sachin Kulkarni, Builder shared his concerns over the lack of coordination between the department in executing PMAY projects. He said, “This is a good sign. However, the PMO’s seriousness in promoting HFA is diluted by the time it reaches the authorities. Apart from collecting application from interested beneficiaries, nothing has moved on the ground in urban centres. I hope that this initiative moves on fast track”.

Maharashtra CM Devendra Fadnavis recently states that the in order to create more housing stock the state’s Slum Rehabilitation Authority scheme be brought under PMAY so that it can receive the subsidy to create more affordable housing. He clearly mentioned that the government intends to create more housing stock and it was taking various initiatives and making policy changes for it.

Also Read- Affordable Housing To Get A Boost With PMAY’s Scope To Be Extended To Private Lands

Continue Reading

Regulations

Real Estate Sector May Fall Under GST What Does It Mean For Buyers?

Published

on

By

One after the other the real estate sector has witnessed massive policy and law changes in its systems. Nonetheless, the tide has not passed yet. The GST council will take up a proposal to bring it under the uniform nationwide levy.

As the industry is still recovering from the RERA Act, the finance minister, Arun Jaitley said that there is a strong case to include real estate in the new indirect tax regime. He said this last week and also mentioned that GST Council will discuss it in November.

At present, the home buyers are paying 12 percent GST on under-construction properties. This percentage includes two taxes which are stamp duty and registration. The rate of which varies in each state but GST will make them uniform.

Santosh Dalvi, KPMG India partner (indirect tax) said, “If the entire real estate is brought under GST, they would have to abolish the stamp duty and we don’t know how the government plans to compensate the states for their loss.”

The stamp duty with registration and GST comes to approximately 18 percent for under construction properties. He further said, “So, it’s important to look at what rate it will be taxed at. We can then look at consumer prices”.

While agreeing, Bipin Sapra, EY partner (indirect tax), added, “It’s going to be a test for the government”.

Developers also pay taxes on raw materials. However, unlike other businesses, they don’t get any tax refunds through input credit. GST taxes every stage of the business activity to better compliance and compensates for it by permitting refunds.

Anuj Puri, Anarock Property Consultants chairman, said “By including real estate under GST, builders can get a fair amount of input credit, helping bring down costs,” He added that it would make homes cheaper for buyers.

According to Sapra, it will depend on the tax rate applicable.

Niranjan Hiranandani, co-founder of Hiranandani Group said, “Real estate under GST ambit means consumers will only have to pay one final tax.” He stated that with the commencement of RERA it brings transparency and GST would reduce the burden in terms of taxes payable while buying the home. He concluded, “Not only will this create positive sentiment but it should also boost actual sales”.

Also Read: Affordable Housing Is The Changing Face Of Indian Real Estate

Continue Reading

Regulations

Home Buyers Will Be Covered Against Builders Who Are Going Bankrupt

Published

on

By

In a move to protect home buyers from builders declaring their bankruptcy, the Insolvency & Bankruptcy Board of India (IBBI) has amended rules which make it necessary for any company to showcase how they have dealt with interests of all stakeholders. This is directed towards companies like Jaypee Infratech and some of the entities of Amrapali Group.

The regulator has informed about the revised rules last week. This will ensure that banks and other creditors do not get away by protecting their interests at the expense of others who are impacted by the action.  Banks are part of the creditors’ committee. They become an important decision-making body after a company is admitted for bankruptcy.

An expert bankruptcy lawyer said, “The change in the rules has plugged a gap as flat buyers are of the view that there is nothing to protect their interests.”

According to the new law that was enacted last year intends to speed up the resolution process in a period of 180 days, with a possible extension of 90 days. This will be done by appointing insolvency resolution professionals who will take charge of the company’s operations and prepare a plan. As per the law, an information memorandum will be finalized if the creditor’s committee is willing to take applications from other interested companies to take over the company.

The insolvency experts say that the law providing for the plan binds corporate debtor (the company) and its members, employees, guarantors, and creditors, other stakeholders involved in the resolution plan. However, there are no obligations mentioned in the rule to give any treatment to the stakeholders other than the financial creditors (banks) and operational creditors, which includes vendors and others who may have dues.

The National Company Law Tribunal, based on the comfort provided by the revised rules, will choose the final resolution plan based on bids that are received. The lawyer further said, “The tribunal will not clear the resolution plan without giving notice to all stakeholders and the flat buyers can raise objections at that point of time.”

Also Read: Tanvi Group Fail To Deliver Homes And Declare Bankruptcy

Continue Reading

Trending