There is fresh hope and a new found certainty in the housing sector of our country these days. Until very recently home buyers looking for residential projects in Bangalore and other such metropolitan cities had apprehensions of timely delivery, legitimacy of the project and value for their hard earned money. These apprehensions largely dictated the home buying decisions which somehow gave the real estate industry a complex and cumbersome identity.
In quite an encouraging move, the Parliament passed the Real Estate Regulation Act (RERA) recently to protect the interests of the home buyers who until now were at the mercy of builders apathy and vested interests. Such an indifference on the part of builders hereon is now set to cost them dear. A buyer can claim full refund with 10% interest if the builder defaults on promised schedules. Provision for the buyer to deposit 70% of the funds into an escrow account (third party account) is another commendable feature of this legislation.
Karnataka government seems to have welcomed this move with wide arms being the first state in the country to draft rules for this legislation, Gujarat being the only other yet. Though the Union Government is yet to make it certain if the on-going projects have to be included for such a stipulation, the Karnataka government has been proactive in this regard too having included the ongoing projects thereby covering about 29000 buyers.
The draft aimed to bring in greater transparency and accountability on the part of builders has made it mandatory for all firms and individual agents ito authenticate themselves by submitting all relevant documents and duly paying a periodic fees – Rs. 5 lakh for firms and Rs. 50000 for individual agents to be renewed every five years – Renewal fees being Rs. 2 lakh for firms and Rs.20000 for individuals. Also the developers and builders are to upload the balance sheet of last 3 years and deposit 70% of yet to be made payments into an escrow account.
http://126.96.36.199/ (click here for all draft rules)
Such a transcending move is definitely a shot in the arm for those home seekers struck by indecisiveness caused by lack of trust in the housing industry. Also, this Act should definitely be a beacon of hope for those who have found themselves in a quandary incited by artificial promises of some builders.