If you are living in an apartment complex like Prestige Park Grove in Whitefield, Bangalore, you know how important it is to have a trusted real estate developer who can provide you with the best possible living experience. However, not all developers are created equal, and there have been numerous instances of unethical practices in the real estate industry. This is where RERA comes in – it is a regulatory authority that was established to protect the interests of homebuyers and ensure transparency and accountability in the real estate sector. In this article, we will take a closer look at RERA and its impact on the future of real estate regulations in India.
What is RERA?
RERA stands for the Real Estate (Regulation and Development) Act, which was enacted by the Indian Parliament in 2016. The primary objective of RERA is to protect the interests of homebuyers by promoting transparency, accountability, and efficiency in the real estate sector. RERA establishes a regulatory authority in each state to oversee the functioning of the real estate sector and ensure compliance with the provisions of the Act.
Key Provisions of RERA
Some of the key provisions of RERA that are relevant to homebuyers include:
1. Mandatory Registration
All real estate developers must register their projects with the RERA authority before advertising, marketing, or selling any property. This ensures that developers cannot make false promises or mislead homebuyers.
2. Escrow Account
Developers are required to deposit 70% of the project’s funds in a separate escrow account to ensure that the money is used only for the construction of the project. This ensures that the developer cannot divert funds to other projects or personal use.
3. Carpet Area
The sale of properties can only be based on the carpet area, which is the net usable area of the property. This ensures that homebuyers are not misled by the developer by advertising the super built-up area, which includes common areas like the lobby, elevator, and staircase.
4. Delivery Time
Developers are required to provide an estimated delivery time for the project, and if there is any delay, they must pay a penalty to the homebuyer. This ensures that developers cannot delay the project indefinitely and cause financial hardship to homebuyers.
Impact of RERA on the Real Estate Sector
RERA has had a significant impact on the real estate sector in India. It has brought in much-needed transparency and accountability and has helped to restore homebuyers’ confidence in the real estate market. The escrow account provision has ensured that developers cannot divert funds, and the mandatory registration has reduced instances of fraud and false promises.
However, some developers have criticized RERA, claiming that it has increased the cost of doing business and has resulted in delays in project approvals. They also argue that the penalty provisions for delays are too harsh and do not take into account external factors like delays in government approvals or natural calamities.
Future of Real Estate Regulations in India
RERA has been instrumental in bringing transparency and accountability in the real estate industry in India. It has made it mandatory for developers to disclose all information related to the project, including the carpet area, and the complete schedule. This has ensured that buyers are not cheated by unscrupulous developers.
RERA has also established a mechanism for resolving disputes between developers and buyers. The establishment of the Real Estate Appellate Tribunal has ensured that aggrieved parties can appeal against the decisions of the regulatory authority.
The future of real estate regulations in India looks promising with the implementation of RERA. The act has created a level playing field for all stakeholders in the real estate industry, including developers, buyers, and agents. It has brought transparency and accountability to the system and has restored the faith of buyers in the industry.
RERA has been a game-changer in the real estate sector in India and has brought in much-needed transparency and accountability. It has helped to restore homebuyers’ confidence in the real estate market and has provided a level playing field for developers who abide by the rules. However, there are still challenges that need to be addressed, such as the lack of a single-window clearance system and the need for more affordable housing.
The future of real estate regulations in India depends on the government’s willingness to address these challenges and promote sustainable and inclusive growth in the sector. The private sector also has a role to play in ensuring compliance with the provisions of RERA and promoting ethical practices. With the right policies and collaboration between the government and the private sector, the real estate sector in India can achieve its full potential and provide quality housing to all.