The Real Estate (Regulation and Development) Act, 2021 is an Act of the Parliament of India that seeks to safeguard home-buyers and assist in the growth of real estate investment. It is the twenty-sixth consecutive year that the real estate market has been under a regulatory regime in India. This Act has been formulated after careful deliberation and reflection of various factors such as economic growth, population, demand for housing, supply and availability of land and structure of the real estate market. The Act has also helped Indian real estate developers to plan and design projects that offer better returns. It has indirectly given impetus to the market and the real estate market in India.
The Act regulates the amount collected from the buyers of real estate in different rates depending upon the value of the property purchased and the structure of the project. Before the completion of a project, the developer should have received the amount from the first buyer who made an agreement to buy the real estate. Once the project is completed, the developer can collect the remaining amount from the amount collected by the developer from the buyers and also from the proceeds obtained from the sale of the flats and houses in the same project.
The Real Estate (Regulation and Development) Act bind the real estate developers and builders to provide housing facilities at affordable prices. It is binding on the home buyers to purchase homes and apartments from the developers. It has ensured that the home buyers do not bear the brunt of increasing prices. It has also prevented the home buyers from being cheated by developers and builders.
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The Real Estate (Regulation and Development) Act are one of the main legislation of India that governs the real estate sector in India. It was brought into being by the government of India through an Act. The procedure of introducing the Real Estate (Regulation and Development) Act varies from state to state. In most cases it is introduced after the implementation of the Bombay Stock Exchange Law. In some states like Maharashtra, West Bengal, Delhi and Uttar Pradesh, the Real Estate Law is implemented initially prior to the introduction of the Real Estate Act.
The main aim of the Real Estate (Regulation and Development) Act is to provide maximum help to the real estate sector. The objectives of the Act are many, like ensuring affordable housing, reducing the cost of housing, promotion of the property market and providing genuine and secure home buying and selling opportunities to the home buyers. The Real Estate (Regulation and Development) Act also take care of the interests of the landowner, who has taken the initiative to restrict development. For instance, an area that has been zoned for housing industrial purpose may not be used by the housing society for residential purpose.
In order to know about the project cost and the promoter’s commission, you need to understand the concept of real estate business. The total project cost is the sum that all the individual or group of people have to pay to the developer in order to develop a particular commercial or residential project. This price includes the project cost, interest, cost of workers and other expenditures incurred in the development process. A promoter of a project can either recover the investment through salary or any other way. Even the carpet area, which is sold off by the real estate companies at the end of their tenure, does not attract any rental income, unless and until the area is developed commercially. The real estate promoter has to make a profit on the carpet area through the sale of this carpet area to the real estate market.