Rules to be made within a maximum period of
6 months; Authorities and Tribunals in one year
Ministry of HUPA begins work on preparation
of model Rules under the Act
Central Government notifies 69 relevant
Sections initiating action under the Act
States can provide protection to home
buyers before the outer limit of one year and three months
The much awaited and
widely acclaimed Real Estate (Regulation and Development) Act, 2016 comes into
force tomorrow i.e May 1, 2016 setting in motion the process of making
necessary operational rules and creation of institutional infrastructure for
protecting the interests of consumers and promoting the growth of real estate
sector in an environment of trust, confidence, credible transactions and
efficient and time bound execution of projects.
Ministry of Housing &
Urban Poverty Alleviation has notified 69 of the total 92 sections of the Act
on Wednesday this week bringing the Act into force from May 1,2016 culminating
the eight year long efforts in this regard. A proposal for a law for Real
Estate was first mooted at the National Conference of Housing Ministers of
States and Union Territories in January, 2009.
As per the notification
announcing the commencement of the Act on May 1,2016, Rules under the Act have
to be formulated by the Central and State Governments within a maximum period
of six months i.e by October 31,2016 under Section 84 of the Act. Ministry of
HUPA would make Rules for Union Territories without legislatures while the
Ministry of Urban Development would do so for Delhi.
Section 84 of the Act
stipulates that “The appropriate Government shall, within a period of six
months of the commencement of this Act, by notification, make rules for
carrying out the provisions of this Act.”
Early setting up of Real
Estate Regulatory Authorities with whom all real estate projects have to be
registered and Appellate Tribunals for adjudication of disputes is the key for
providing early relief and protection to the large number of buyers of
properties.
Section 20 of the Act
says “The appropriate Government shall, within a period of one year from the date
of coming into force of this Act, by notification establish an authority to be
known as the Real Estate Regulatory Authority to exercise the powers conferred
on it and to perform the functions assigned to it under this Act”. These
Authorities decide on the complaints of buyers and developers in 60 days time.
Section 20 of this Act
also empowers appropriate Governments to designate any officer preferably
Secretary of the Department dealing with Housing, as the interim Regulatory
Authority until the establishment of Regulatory Authority under the provisions
of the Act.
Regulatory Authorities,
upon their constitution get three months time to formulate regulations
concerning their day to day functioning under Section 85 of the Act.
Likewise, under Section
43 of the Act, Real Estate Appellate Tribunals shall be formed within a maximum
period of one year i.e by April 30,2017. These fast track Tribunals shall
decide on the disputes over the orders of Regulatory Authorities in 60 days
time.
Under the directions of
the Minister of Housing & Urban Poverty Alleviation Shri M.Venkaiah Naidu,
a Committee chaired by Secretary (HUPA) has already commenced work on
formulation of Model Rules under the Act for the benefit of States and UTs so
that they could come out with Rules in quick time besides ensuring uniformity
across the country. The Ministry will also will come out with Model Regulations
for Regulatory Authorities to save on time.
The time limits of six
months for formulation of Rules and one year for setting up Regulatory
Authorities and Appellate Tribunals are the outer limit and the States willing
to act quickly could do so and the Ministry of Housing & Urban Poverty
Alleviation would notify the remaining Sections of the Act to enable relief to
the buyers under the Act as quickly as possible, as desired by Shri M.Venkaiah
Naidu.
The remaining 22 Sections
to be notified relate to functions and duties of promoters, rights and duties
of allottees, prior registration of real estate projects with Real Estate Regulatory
Authorities, recovery of interest on penalties, enforcement of orders,
offences, penalties and adjudication, taking cognizance of offences etc.
Chronology of events leading to the
Real Estate (Regulation and Development) Act,2016 coming into force:
-The National Conference of Ministers
of Housing, Urban Development and Municipal Affairs of States and UTs held on
January 20,2009 proposed a law for real estate sector;
-During subsequent consultations by
the central government, it was decided to enact a central law for real estate
sector. This was endorsed by Competition Commission of India, Tariff
Commission, Ministry of Consumer Affairs;
-Ministry of Law & Justice suggested
central legislation for Real Estate Sector in July,2011 under specified entries
of Concurrent List of the Constitution for regulation of contracts and transfer
of property;
-Union Cabinet approved the Real
Estate Bill, 2013 on June 4,2013;
-The Real Estate Bill,2013 introduced
in Rajya Sabha on August 14,2013;
-Bill was referred to the Department
Related Standing Committee on September 23,2013;
-Report of the Standing Committee
tabled in Rajya Sabha on February 13,2014 and in Lok Sabha on February 17,2014;
-Attorney General upheld the validity
of central legislation for Real Estate Sector and the competence of Parliament
on February 9,2015;
-Union Cabinet approved Official
Amendments based on Standing Committee Report on April 7, 2015;
-Real Estate Bill,2013 and Official
Amendments referred to the Select Committee of Rajya Sabha on March 6,2015;
-Select Committee of Rajya Sabha
tabled its Report along with Real Estate (R and D) Bill, 2015 on July 30,2015;
-Union Cabinet approved the Real
Estate Bill,2015 as reported by the Select Committee of Rajya Sabha for
further consideration of Parliament on December 9,2015;
-Bill listed in Rajya Sabha for
consideration and passing on 22 and 23 December, 2015 but could not be taken
up;
-Bill passed by Rajya Sabha on March
10,2016;
-Lok Sabha passed the Bill on March
15,2016;
-President of India accorded his
assent to the Bill on March 25,2016;
-The Real Estate (Regulation and
Development) Act,2016 was published in the Gazette for public information on
March 26,2016;
-69 Sections of the Real Estate
(Regulation and Development) Act,2016 notified by the Ministry of Housing &
Urban Poverty Alleviation on April 27,2016 bringing the Act into force with
effect from May 1,2016.
AAR