The boom in the IT sector led to a surge in real estate demand. This allowed developers and builders to exploit gullible home buyers.
Many buyers faced deception and fraud. For instance, developers delayed projects or mis-sold properties. Hence, the government felt the need to regulate the real estate sector to protect buyers.
What is RERA?
In 2016, the Parliament enacted the “Real Estate (Regulation and Development) Act 2016” which came into effect on 1st May 2016. RERA applies to all of India except Jammu and Kashmir state. The provisions of this act apply to residential apartments, buildings, and plots, both residential and commercial.
Under RERA (Real Estate Regulation Act) registration is mandatory for all residential or commercial projects of more than 500 square meters and eight units in number.
The Real Estate Regulation & Development Act lends professionalism, standardization, transparency, and consumer protection to the real estate industry. The act ensures accountability toward consumers and curtails deception, fraud, delays, and current high transaction costs.
RERA (Real Estate Regulation Act) also provides a fast-track dispute resolution mechanism by establishing a Real Estate Regulatory Authority and the Real Estate Appellate Tribunal in each state. The Regulatory Authority also monitors the progress of the development of registered projects against the given timelines.
For any delay, the developer is liable to pay a prescribed penalty on prescribed rates, as mentioned in the agreement between buyers and sellers to the consumer.
How RERA Protects Buyers
RERA (Real Estate Regulation Act) includes a web portal where developers must register, share crucial information about their projects, adhere to disclosure norms, and report causes for delays in project completion.
The consumers can also log in to the web portal and obtain relevant information anywhere and anytime to keep abreast of the progress in their property projects.
Penalties for Violations
For violation of orders of the Regulatory Authority and Appellate Tribunal, developers are liable for imprisonment for up to 3 years and the Agent can be imprisoned for a maximum period of 1 year or a fine for each day of default continued, extendable up to 10% of the estimated cost of the apartment, building or plots of the project.
How RERA Benefits Builders
Under the aegis of the RERA (Real Estate Regulation Act), the builders stand to benefit in the following ways:
- Adequate financial flow.
- The increased attraction for buyers is due to the security of investment.
- Better functioning- the acts help to work efficiently and consistently.
- Imposition of penalty for default or late payment by consumers.
How RERA Benefits Buyers
Buyers stand to benefit in the following ways:
- False Promise: If the developer does not stick to their words, then the buyer can opt-out with a full refund of the amount paid.
- Defect after possession: The developer must rectify within 30 days any defect brought to their knowledge within five years of property possession.
- Defect in Title: If any error in the property title occurs even after successful property possession, the buyer can demand compensation from the developers.
- Transparency: Each buyer has a right to know every project detail.
- Grievance Redressal: Any buyer grievance can be informed to the Real Estate Regulatory Authority for redressal.
- The solution of abandonment.
RERA’s Global Impact
The Real Estate Regulation Act is an all-inclusive act, a blessing for all stakeholders. The proven efficacy of RERA (Real Estate Regulation Act) in protecting consumer interests, highlights its role in creating a fair and thriving real estate ecosystem in India. RERA (Real Estate Regulation Act) enhances the well-planned urban development of real estate.
The introduction of RERA has incited the international diaspora to invest in the Indian real estate sector due to increased transparency and security of registered projects.
The compactness of the RERA has encouraged many other countries to enact laws like India to regulate their Real Estate sector for its promotion and overall development, to improve the economy by being accountable, transparent, and boosting investments in real estate.
Image Disclaimer: Some images in this article are AI-generated and does not depict any real person, place, or event. While others are sourced from royalty-free platforms like Pexels, used solely for illustrative purposes. Picture credit to the original owners.
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