Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, is a significant legislation in the Indian real estate sector introduced to regulate the industry and protect the interests of homebuyers. RERA Act aims to bring transparency, accountability, and efficiency to the real estate sector by submitting a structured framework for real estate transactions.
RERA was implemented on May 1, 2017, and it has been enforced in all states and union territories of India. The act aims to ensure that real estate projects are completed on time and that the buyers get what the developers promised.
Under RERA, all real estate developers must register their projects with the regulatory authority before starting the project's construction. The regulatory authority is responsible for monitoring the project's construction progress and ensuring that the project is delivered to the buyers within the promised timeline.
RERA also mandates that all real estate projects have a separate escrow account where the developers must deposit at least 70% of the project funds collected from the buyers. This measure aims to ensure that the developers do not divert the funds collected from the buyers to other projects or purposes and that the funds are utilized only for the completion of the registered project.
Apart from these measures, RERA also mandates that developers must disclose all the information related to the project on the regulatory authority's website. This information includes details about the project layout, approvals, land title, carpet area, and completion timelines. This measure ensures transparency in the real estate sector and helps buyers make informed decisions while purchasing the property.
RERA also empowers homebuyers by providing a mechanism to file complaints against the developers if they are dissatisfied with the construction quality or any other aspect of the project. The regulatory authority is responsible for resolving these complaints within a stipulated time frame.
The penalties for non-compliance with RERA are severe. Developers can be fined up to 10% of the project cost and face imprisonment for up to three years. This measure ensures that the developers adhere to the rules and regulations laid down by RERA.
In addition to the above, RERA also introduced the concept of Real Estate Agents, who are now required to register themselves with the regulatory authority. This measure ensures that the agents follow ethical practices and do not indulge in fraudulent activities while selling or promoting real estate projects.
Moreover, RERA has brought a significant shift in the mindset of developers and investors, who now focus more on delivering quality projects within the promised timelines. The act has also boosted the affordable housing segment, which developers earlier neglected due to low-profit margins.
In conclusion, RERA has been a game-changer in the Indian real estate sector. It has brought transparency, accountability, and efficiency to the industry, which was previously plagued with project delays, construction quality issues, and financial irregularities. RERA has empowered homebuyers by providing a mechanism to protect their interests. It has also streamlined the real estate sector by introducing a structured framework for real estate transactions.