RERA and how will it impact the real estate industry and home buyers
The Government of India enacted the Real Estate (Regulation and Development) Act 2016 on 26th March 2016 and all its provisions came into effect, from May 1, 2017.Developers have been given until the end of July 2017, to register their projects under RERA.
The Real Estate (Regulation and Development) Act, 2016 (RERA) is an Act passed by the Indian Parliament. The RERA seeks to protect the interests of home buyers and also boost investments in the real estate sector.
Due to increasing complaints from the home buyers that real estate transactions being in favor of the developers, the Government of India enacted RERA, which will make real estate purchase simpler, by bringing in better accountability and transparency, and more equitable and fair transactions between the seller and buyer of the properties.
RERA will give the Indian real estate industry its first regulator. It makes mandatory for each state and union territory, to form its own regulator and frame the rules that will govern the functioning of the regulator.
The Act impacted home buyers in many ways. It prohibits unaccounted money from being flow into the sector. A major benefit for consumers included in the Act is that builders will have to quote prices based on carpet area not super built-up area, while carpet area has been clearly defined in the Act to include usable spaces like kitchen and toilets.
The consumers can claim possession of the unit and the association of consumers can collectively claim possession of the common areas as declared by the real estate developer. If the real estate developer fails to meet the timeline or does not deliver what was promised, the consumer has a right to claim refund of amount paid along with prescribed interest and compensation for the same.
After the implementation of the Act, home buyers will be able to monitor the progress of the project on the RERA website since promoters will be required to make periodic submissions to the regulator regarding the progress of the project.
The Act makes it tougher for the intermediaries to conduct business in an unprofessional manner and in a way prompts them to adopt ethical means of dealing with consumers.
An intermediary is required to be registered with the RERA and possess a valid registration number before facilitating a sale or purchase of a project or acting on behalf of any real estate developer for the same. He is also required to maintain and preserve books of account, records and documents as prescribed by the Act. He shall also facilitate the possession of all information to the consumer, at the time of booking and provide any other assistance as prescribed.
