Now Builders Will Pay 10.9% Interest For Delay In House Delivery, According To RERA

The Centre on Monday notified rules to implement the Real Estate Regulation Act (RERA), which will allow buyers who have invested in real estate projects – including existing ones – to secure interest at 10.9% per annum for delayed possession.

Here are the key takeaways

• If a buyer seeks a refund, they will now be entitled to a refund on the entire payment at the same rate, and the builder will have to repay the amount within 45 days of a claim being made by the buyer.
• The interest rate has been fixed at 2 percentage points above the SBI’s marginal cost of funds (current benchmark lending rate for banks).
• With the notification of the new rules, every builder will have to register with the state regulator.
• The final rules specify that developers of ongoing projects will also have to deposit 70% of the funds collected, but which have remained unused, into a separate bank account within three months of applying for registration.
• The rules spell trouble for developers who have diverted funds collected from buyers, because, under the new law, the regulator would be obliged to issue judgments within 60 days of complaints being filed.
• The rules spell trouble for developers who have diverted funds collected from buyers, because, under the new law, the regulator would be obliged to issue judgments within 60 days of complaints being filed.
• The rules also make it mandatory for a buyer to pay the interest at the same rate of 10.9% on the dues raised by developers. This will come as a major relief for buyers who have to currently shell out upwards of 15% interest for delayed payments.

To address the problems being faced by buyers, some of whom have been waiting for their homes for up to 10 years, the rules also stipulate that the developers of ongoing projects specify the scheduled completion date while registering the project with the regulator.

The rules will be applicable to the Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, and Lakshadweep, an official release said. In a statement, the Union urban development ministry said it was working on similar rules for Delhi.The rules, it is learnt, will be notified in November.

With the Centre notifying the rules, states and UTs are expected to follow suit soon. As per the provisions of the RERA, 2016, the regulatory authorities have to be put in place by April 30, 2017, a day before the full Act is brought into effect. Chandigarh has set up a temporary regulatory authority , which makes it one of the first in India to do so.