It would be a perfect fair to say that Real-estate is ever-booming industry in India. The market of commercial & residential housing is one of the substantial contributors to economic and development of the country. Since the entire industry is evolving as key driver with greater potential, on other side sellers & buyers used to face numerous issues in registering and regulating projects. The long delay of processing in registration process of housing projects has severely affected the real estate business model, majorly it affected the consumers. In some instances, builders and buyers are left in critical situations, due to the fraudulent activities while registration and in between processing the projects. Realizing the depth of this problem and to minimize the negative instances through implying various alterations, our honorable parliament introduced a real estate act called The Real Estate Regulation Act (RERA) officially on May 1st of 2016.
“If there is one reform in the Indian real estate that can be addressed as a game-changer, then, it would be none other than the Real Estate (Regulation and Development) Act 2016 (RERA). The Act has not only consolidated the sector and introduced transparency but also proved a boon for the aggrieved real estate buyers.” - Executive Director, The Guardians Real Estate Advisory
Key objectives of RERA:
Disruption of real estate after RERA:
Today, carrying out RERA- Real-Estate Regulatory Authority is mandatory for builders and developers before starting any projects. While registering in RERA, the developers & builders must provide the details from head-to-toe of the projects including hand over dates, pricing, plans and so on. Entire RERA registered projects are uploading in authentic government portal of each state with unique project codes. If the home buyers want to overview the details of respective project, they can visit the RERA website of their state. For example, you are interested in buying house in Karnataka, you can visit Karnataka RERA website and browse the information of your favorite properties.
According to RERA, developers are mandated to provide the updated construction status to home buyers, who have already invested in it. They must update the projects details such as prices, number of sold flats and images in their official website to help the home-buyers to take informed decisions about their investments in real estate. Such features of RERA enables the home buyers to stay updated about the construction status of their flats.
Before the inception of RERA, there is an uncommon delay and pricing variations are used to occur. But after implementing this regulation, they applied several penalties for developers, who are all missed to register and update their project details timely. It ensures the timely completion of projects and adheres to fulfill the promised delivery timelines. If the respective partners failed to meet the deadline, then they are liable to compensate the buyers for the delay and pay penalties. This regulation encouraged the activity of developers to finish the projects on time.
“The Real Estate (Regulation and Development) Act, 2016 (RERA Act) has had a profound impact on the Indian real estate sector; however, the policy can always improve so that its benefits for real estate developers and home buyers increase.” - Sujatha Rangachari
Also RERA makes mandatory that developers or partners have to deposit at least 70% of the funds received from the buyers in an external escrow account. This provision prevented the diversion of funds to other projects and ensured the collected funds are absolutely utilized for development of the registered project. Another significant benefit of RERA is standardization of the of carpet area. Earlier, developers often used to throw cryptic terms, giving misleading guidelines to buyers about the actual size & price of the property. Now RERA provides a clear definition, bringing equity and clarity to property transactions.
RERA established a speedy grievance redressal mechanism, which enabled homebuyers to seek remedies in case of any disputes with housing partners. Each state has its own Real Estate Regulatory Authority (RERA) commission and on-line website to address the complaints effectively; it ensured robust resolution and justice for consumers. By doing so, the provision promotes professionalism and accountability in the industry, ensuring that real-estate agents work within the legal and ethical framework in their practices.
The Bottom line:
Regardless the investment, buying home is emotional decision of people in India. Majority of home-buyers are investing in purchase of home which is significant and high payment transaction they make in their life-time. For increased populated country like India, accessing an adequate housing accommodation and real-estate projects is quit challengeable. Hence to ease the process of home-buying and to eliminate the unnecessary disputes, government of India established RERA.
With all the above mentioned provisions, it’s clearly evident that RERA is proven game-changer in real estate sector of India, since its inception. The regulation has implied much-needed transparency, accountability, and decorum to the sector, by encouraging the interests of home-buyers & promoting the ethical frame work among partners and agents. With RERA's regulations, the real estate industry is witnessing a positive revolution & transformation, enhancing consumer confidence and fostering the healthy ecosystem of Indian real estate sector. Going forward, it is essential for all the developers and consumers to embrace the viabilities of RERA and the objectives, which is functionally working to build robust and reliable real estate sector in India.
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