In an effort to protect homebuyers, the Odisha Real Estate Regulatory Authority (ORERA) has revised its project closure policy for real estate developers, introducing a standardized application form to streamline the process. This updated approach ensures greater accountability from promoters while enhancing consumer protection.
Key Policy Changes: Retention of Funds for Homebuyer Protection
Under the recent amendment, ORERA mandates that developers must retain one percent of the project cost in the designated RERA account for a period of five years after the issuance of occupancy certificates to buyers. This retained amount is specifically reserved for addressing potential structural defects or workmanship issues that might arise within the five-year period, ensuring that homebuyers are protected even after project completion.
Previously, the resolution required retention of all funds within the RERA account until the project was closed. The new amendment, however, streamlines this by allowing access to funds while retaining a portion specifically for future quality concerns.
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Applicability of the New Policy for Promoters
This revised closure policy primarily impacts projects funded through allottee contributions. For developments where promoters have invested their own funds, the cost of any future repairs or maintenance must be fully covered by the promoters themselves. This differentiation underscores ORERA’s commitment to ensuring that homebuyers’ funds are safeguarded and used appropriately.
Simplified Process with a New Application Form
To formalize the closure process, ORERA has also introduced a structured application form for project closure—a first in its project closure policy. Promoters are now required to submit this form to ORERA upon project completion, detailing compliance with specific requirements. The authority will carefully review each application to verify that all obligations have been met before granting final project closure status.
This change represents a significant step towards accountability, adding a protective layer for homebuyers and enhancing transparency within Odisha’s real estate sector.
