Difference & Compatability between Real Estate (Regulation and Development) Act (RERA), 2016, & Consumer Protection Act

 

Purpose of enactment of RERA

Why this act when CP Act in force regulate the sector

Transparency, accountability and regularising the sector.

Taking care of interests of home buyers

  Both the acts supportive to each other

1.     The proviso to Section 71(1) permits the complainant to select as per its discretion any forum for the redressal of its grievances and it does not explicitly provide for the bar of jurisdiction of consumer forum A complainant may withdraw the complaint pending before the Consumer Dispute Redressal Commission and file it before the RERA

2.     SEC 88 OF Consumer Protection Act

Available additional remedy

3.     Both can hear all grievances related to home –

Delay, defect, cost calculation, alteration, area dispute, other facilities amenities disputes, Registration or agreement issues

4.     Can chose one option ,not both

5.     A Bar of Jurisdiction of Civil Courts is enforced by section 79, no civil court shall entertain any suit and no injunction shall be granted by any court in matter adjudicating under RERA.

6.     Arbitration clause not a bar

Difference

·        RERA entertains commercial as well as residential ,consumer act only residential

·        CP Act looks after other consumer matters which are not for commercial purpose

Implementation of order of RERA

Section 40 ;

·        Compliance from the date of order received -45 days

·         RERA can be contacted for execution,-can be recovered as arrears of land revenue

·         Non-compliance ;penalty be levied on a daily basis subject to a maximum of five percent of the estimated cost of the real estate project

·        Can also be imprisoned for a term up to three years or with fine, or both

(Basic features derived out of Consumer Courts observations and decisions so far made and that inspired to frame things which will ultimately stop all unfair practices)

RERA is a central act like Consumer Protection Act but states have to set up Authorities and tribunals for the state

1.     SETTING UP OF REGULATORY BODY

•      Establishment of  State Real Estate Regulatory Authority for every state for redressal of grievances against any builder made mandatory

•      It is to be paired with real estate appellate tribunals (REATS) to consider appeals against orders of RERAS

•      Regulatory authorities will have to dispose of complaints within 60 days

·        Under the new proposals, additional benches of appellate tribunals can be set up in a state if required for speedy adjudication of grievances

 

2.     REGISTRATION OF PROJECT  WITH AUTHORITY

Every project measuring more than 500 square metres or more than eight apartments will have to be registered with the RERA

3.     JURISDICTION

•      The Real Estate Regulator shall have the authority  to govern real estate transactions in both areas  

!) Residential; All matters related to home buyer/builder disputes

     !!) Commercial all matters related to home buyer/builder disputes

!!!)Civil courts intervention barred Section 79

4.     ADMINISTRATIVE APPROVALS OF PROJECT

•      A developer will not be able to market any project unless all approvals are in place. Property buyers will be able to check details about a project online

5.     FUNDS UTILIZATION NORMS

Developer obliged to park 70% of the project funds in a dedicated bank account to ensure that developers are not able to invest in numerous new projects with the proceeds of the booking money for one project

6.     CARPET AREA DEFINED

Carpet area has been clearly defined in the law and the current practice of selling on the basis of ambiguous super built-up area for a real estate project will come to a stop as this law makes it illegal.

7.     PROVIDING INFORMATION

Its mandatory for developers to post all information of project plan, layout, Government approvals, land title status, sub contractors to the project, schedule for completion etc.with the State Real Estate Regulatory Authority (RERA) and to the consumers& on the regulator'swebsite

8.     COMPLETION AND OCCUPATION CERTIFICATES

The issuance of completion and occupation certificates from authorities are brought under regulatory supervision along with other permissions

9.     ALTERATION IN PROJECT

No alteration in project at the free will of the promoters unless the consent of at least two-thirds of the buyers of the project has been obtained.  

10.                        PENALITY FOR DELAY –same rate of interest for both defaulters

The law ensures that any delay in project completion will make the developer liable to pay the same interest as the EMI being paid by the consumer to the bank back to the consumer.

11.                        PENALITIES FOR VOILATION

•      The De-Registration of the Project

•      5-10 per cent of the project cost

•      Imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for violation of orders of the appellate tribunals or monetary penalties, or both. 

 

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