RERA

In order to facilitate transparency in the home buying process, the Indian Government passed the RERA Act in May 2016. Soon after, RERA was brought into action to address concerns of home buyers, builders, brokers, and other stakeholders of the real estate industry. Since its inception, RERA has implemented many reforms and more are on the anvil.

What is RERA?

RERA, full form of which is Real Estate Regulatory Authority, stands for transparency in the real estate industry. It was brought to action to eradicate the existing discrepancies and problems within the sector. With RERA in place, every builder or developer is required to inform home buyers of the progress of construction, offer them keys to their property by the mentioned date, and abide by every rule outlined by RERA, to ensure accountability.

Some Points Under Real Estate Regulation and Development (RERA)

  • Security: Under the RERA act, a minimum of 70% of the buyers’ and investors’ money will be kept in a separate account. This money will then be allotted to the builders only for construction and land related costs. Developers and builders cannot ask for more than 10% of the property’s cost as an advance payment before the sale agreement is signed.
  • Transparency: Builders are supposed to submit the original documents for all projects they undertake. Builders are not supposed to make any changes to the plans without the consent of the buyer.
  • Fairness: RERA has now instructed developers to sell properties based on carpet area and not super built up area. In the event that the project has been delayed, buyers are entitled to get back the entire money invested or they can choose to be invested and receive monthly investment on their money.
  • Quality: The builder must rectify any issue faced by the buyer within 5 years of purchase. This issue must be rectified within 30 days of the complaint.
  • Authorisation: A regulator cannot advertise, sell, build, invest, or book a plot without registering with the regulator. After registration, all the advertisement for investments should bear a unique project wise registration number provided by RERA.

PM Narendra Modi recently, said that RERA Act has resulted in impartiality in real estate sector and has given boost to construction activities. “There was lack of impartiality in real estate sector. This was creating problems for those who wanted to buy houses. By introducing RERA, the government has created confidence in the minds of home buyers” said Modi. He added that government has strengthened dreams of home buyers by giving tax concessions so that middle class people can fulfill their dream of having own houses. “Many states have notified RERA and tribunals are working. Many flats are being constructed under RERA” he said, adding the holistic approach for construction of houses has yielded good results.

Implementation of RERA has changed the dynamics of the real estate sector in India. It has brought in uniformity and higher transparency in the sector, further strengthening the buyer and investor’s confidence. Unlike earlier, now the developer community in the Indian context is more focused towards the planning and development of projects, which eventually boosts the market sentiments. It is definitely beneficial for buyers.

Rera On Home

Benefits of RERA

Industry

  • Governance and transparency
  • Project efficiency and robust project delivery
  • Standardization and quality
  • Enhance confidence of investors
  • Attract higher investments and PE funding
  • Regulated Environment

 

Developer

  • Common and best practices
  • Increase efficiency
  • Consolidation of sector
  • Corporate branding
  • Higher investment
  • Increase in organised funding

Buyer

  • Significant buyers protection
  • Quality products and timely delivery
  • Balanced agreements and treatment
  • Transparency – sale based on carpet area
  • Safety of money and transparency on utilisation

Agents

  • Consolidation of sector (due to mandatory state registration)
  • Increased transparency
  • Increased efficiency
  • Minimum litigation by adopting best practices

Owing to the various relaxation of business establishment procedures and the ease of doing business many foreign players and MNCs are now attracted to India. The current tempo being witnessed over the luxury real estate market in India is expected to continue as the demand for luxury houses is on the upswing. In North India, Delhi NCR, Gurgaon and Noida have dominated the real estate market growth, especially in high-rise luxury condominium projects. After the implementation of RERA certified properties in Gurgaon, the industry has experienced the improvement in project execution and delivery of it in the residential segment. Provisions of the Act has forced the real estate companies to focus more on project delivery which has resulted in the availability of ready to move apartments in Gurgaon as well as in different parts of the country for the home buyers. The Act has been able to generate a positive reaction from both the developers and consumers. Talking about the future, RERA promises an organized industry as it is progressive legislation. It has the potential to create a real estate industry that everyone desires as the properties have become RERA certified now.

 

Sources:

  • https://www.thehindubusinessline.com/news/real-estate/rera-boosting-construction-activity-modi/article29368404.ece
  • https://www.charteredclub.com/rera/
  • https://www.myloancare.in/info-bank/rera-real-estate-regulatory-authority
Share on Facebook
Tweet
Follow us