You can forget about your past.

But sometimes your past doesn’t let you forget it.

It continues to introduce itself into the future.

Something similar has happened to real estate developers.

They had a free run until now.

There wasn’t any regulator to penalise them for their wrongdoings.

Not all builders are alike, but many developers have bullied the homebuyers by not giving them timely possession of properties and diverting funds collected from them into other projects.

However, this is in the past.

The good news is, as of May 01, 2017 the Real Estate Regulation and Development Act (RERA Act) will be implemented.

Now, if developers decided to change themselves completely and start being fair with their customers, such change in the attitude can’t absolve them from their misdeeds. Developers who haven’t given timely possession to homebuyers now fear that if the law is implemented with the retrospective effect, they will have to face severe consequences.

Echoing this sentiment, Mr Santhosh Kumar, operations head at JLL India—an independent firm offering specialised real estate services said, There is a fear among the developer community that RERA would be enforced retrospectively, is one of the clauses in the notification. If that happens, many would be penalised.”

Commenting on this development, the President of National Real Estate Development Council (NAREDCO), Mr Parveen Jain said, “Builders are working overtime and are trying to complete projects. Costs of cement and steel have shot up by one and a half times. A grace period should be given. We have had conversations with officials and government about this.”

Undoubtedly, the implementation of RERA will monitor builders who have been dealing with homebuyers contemptuously.

As per the rules notified in October 2016, the developers will have to refund or pay interest at 2% higher rate than that on SBI’s highest Marginal Cost of Lending Rate (MCLR). Further more, this payment has to be paid within 45 days of its due date. To be fair, the homebuyers will be entitled to pay compensation to the developers at the same interest rate, if they fail to make a payment within the time period specified in the Agreement of Sale.

In the case of ongoing projects that haven’t received a completion certificate, developers will be required to publish the originally sanctioned plans with specifications and changes made at a later date. Along with that, the developer will also have to disclose the total amount collected from allottees and money utilised. In the same disclosure, the builder will have to mention the original timeline for completion and the time period within which the developer undertakes to complete the project, duly certified by an Engineer/Architect / practising Chartered Accountant. The promoter shall also declare the size of the apartment based on carpet area even if it was earlier sold on any other basis.

Within three months of applying for the registration of a project with the Real Estate Regulatory Authority the developer shall deposit 70% of the amount collected in a separate bank account and to be utilized the completion of ongoing projects.

It seems the past of real estate developers may follow them for some more time.

A special note for readers:

PersonalFN is extensively covering the developments on this subject. RERA is going to bring about drastic changes in the way the Real Estate industry operates. There are a few provisions of RERA so radical that builders and buyers may find it hard to believe. At PersonalFN, we authenticate our articles with facts and unbiased data stating our clear views on them.

For the benefit of all readers and especially those who might be directly or indirectly affected by RERA, positively or negatively; we are adding two links in this post.

You can refer to RERA here, and if you want to read about rules that have been notified in October 2016, you may click here.

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