Big relief for buyers as Centre mandates refund on delay

If you have bought your dream home some years ago and yet to get possession of that, the time has come to raise your claims with more authority. 

In a major relief for homebuyers affected by delay in their projects, developers will now be required to refund or pay compensation to the allottees with an interest rate of the State Bank of India’s highest marginal cost of lending rate plus 2 per cent within 45 days of it becoming due.

The Centre on Monday notified final rules to implement the Real Estate (Regulation and Development) Act, 2016 (RERA) that aims to bring transparency and set accountability in the sector and help in completion of stalled projects.

The final rules mandated that 70 per cent of unused amounts collected for ongoing projects to be kept in a separate bank account and promoters will have to declare original sanctioned plans, changes made later, fresh timeline for completion of ongoing projects. 

Also promoters will have to make public a host of information and report quarterly progress to enable informed decisions by buyers.

The rules, put in the public domain by the Ministry of Housing and Urban Poverty Alleviation (HUPA) three months back for suggestions, will be applicable for five Union Territories without legislature of Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep and Chandigarh.

“The ministry of urban development is working on similar rules which would be applicable for the National Capital Region of Delhi, while state governments and other union territories with legislature will either come out with their own rules or have the option to adopt the HUPA-notified rules,” the official release said.

Hailing the decision, Abhay Upadhyay, national convener of homebuyers’ body ‘Fight for RERA’, said, “We had given our suggestions to the government and we feel almost 80 per cent of the issues have been addressed. I wish to thank the government for their support and understanding the problems of homebuyers. The rules to deposit 70 per cent of the amount collected and unused will be big boost for stalled projects.”

However, what may come as a major relief for builders, the requirement of disclosing income-tax returns proposed earlier has been withdrawn in the final rules keeping in view the confidentiality attached with them. 

Also fee for registration of projects and real estate agents with regulatory authorities has been reduced by half.