All ongoing real estate projects that do not get a completion certificate on or before April 30, 2017, will come under the purview of the Real Estate (Regulation & Development) Act.
The Union Ministry of Housing and Poverty Alleviation has clarified that the Real Estate Act will come into force from May 1 and the new law will be applicable to ongoing projects, which did not get the completion certificate before that.
The clarification comes after some states, including Uttar Pradesh and Gujarat, faced allegations of diluting the provisions of the act and deliberately letting off ongoing projects.
Uttar Pradesh in the draft rules has come up with four exemptions to exclude incomplete projects from the category of “ongoing projects”, while Gujarat has exempted all projects launched before the notification of the rules.
This means such projects need not to be registered with the real estate regulator in these states.
On excluding balconies from the definition of carpet area, the Centre clarified that it posed no problems as costing could be accordingly informed to the buyers.
Besides, any expenditure incurred by promoters on development of land could be included as part of the cost of the land, an official from the ministry said.
The act provides for interim regulatory authorities, who will in turn put in place the necessary institutional mechanisms for full-fledged regulatory authorities to become functional from May 1.
The realty law, which was passed by Parliament last year, makes it mandatory for all builders — developing a project where the land exceeds 500 square metres — to register themselves with the regulatory authority before launching or even advertising their project.
Failure to do so will invite a penalty of up to 10% of the project cost, according to the realty law.