WHAT IS RERA?
Real estate (Regulation and Management) Act, 2016 passed by the Rajya Sabha on 10th March 2016 and by the Lok Sabha on 15th March 2016. The Act came into effect on 1st May 2017 to basically make the real estate sector more accountable to the buyers. Transparency was also one of the primary reasons for its institution. With matter being on the state list many states have now framed rules and regulations for the smooth implementation of much awaited RERA.
After the commencement of the act there has been instances that builders and promoters have shown there disinterest but Bombay High Court judgement clarified this thing by upholding the act giving relief to buyers saying it will include ongoing projects within its purview. It also ruled that the Act shall apply prospectively and not retrospectively and did not contravene any Articles of the Indian constitution.
Some Important Points Are:
CARPET AREA – The area within the four walls of the apartment will be considered as Carpet area.
REGISTRATION OF PROJECT– This is the first point which needs to be checked by every buyers before buying that if the builder who is advertising his project has registered under the state real estate regulatory authority or not (as it is the very first primary step after the launch).
REDRESSAL MECHANISM– Previously buyers did not have any redressal mechanism apart from the regular legal framework. But RERA seeks to change this by imposing strict regulations on the developer to ensure projects are completed well within the given stipulated time as promised to the buyer their advertisement. The developer is liable to pay 10% of the project cost penalty and can face imprisonment upto 3 months in the delay of delivering the project.
QUALITY OF CONSTRUCTION– RERA has also maintained standard in quality of construction as the developer is now responsible for repairing any defects in the structure of the project upto the time frame of 5 years and his obligation doesn’t merely end with the delivery of the project.
TRANSPARENCY– Under the RERA Act the regulatory authority that was set up now has to furnish all information pertaining to developer, his financials, litigations if any, advertisement of the projects along with complete details of the apartments thereby ensuring transparency for buyers which in pre-RERA days lacks.
According to the report of Cushman and Wakefield, currently developers are launching few new projects, as they are tensed with an environment of high inventory, weak demand and are focused on ensuring new projects are aligning with regulatory changes like Real Estate Regulatory Authority (RERA) and GST.
Some Real estate brokerage companies have stated that the real estate market has grown by leaps and bounds over the years, but property buyers have always viewed the industry with confusion. However this dynamics has changed due to RERA as there comes complete transparency of transactions which in turn will boost end user confidence.
RERA to an extent helped in shedding positive light on the real estate market in the media. The media was filled with news reports of delays of projects leading to a sense of anxiety among potential buyers. This sense is set to change with the advent of RERA as promoters now have to be accountable for their acts in case of any omissions on their part.
But though after the advent of RERA, many buyers got cheated by the advertisement of renowned builders, and found the RERA authorities are in a dormant state, though many complaints have been repeatedly filed by grieved buyers who sought action against the builders.
In the end, enforcement of policy once again become a factor which takes away the confidence of general public over the government.