The RERA Act short for Real Estate (Regulation and Development) Act, 2016 is one of the biggest improvisation in the sector of real estate. Real Estate Regulatory Authority (RERA) Bill was introduced by the Indian National Congress government in 2013 and after 6 years of debating, it was brought into effect on 1st May 2016. The rules under the act were to be formulated by the Central and State government within 6 months of the notification coming out, and each state had its own regulator along with a set of rules for the functioning of the regulator. RERA seeks to promote the interests of the consumers as well as builders and boost investments into real estate in an environment of trust and confidence. The transparency of the act ensures a steep drop in illicit activities and customer harassment, and an inclusion of agents in the provision now makes them accountable for their actions.
Making it mandatory for all commercial and residential real estate projects to register with the Real Estate Regulatory Authority India, now disclosure of names of promoters, project layout, the status of statutory approvals, the draft of builder-buyer agreements, land status, names and addresses of real estate agents etc is obligatory. This information has to be regularly updated on the website of the regulator as well. Non-registration of any real estate project can also lead to punishment upto 3 years or a fine upto 10% of the cost of the project. Various provisions of the act help in protecting the uninformed customers, such as:
- The registration of the regulator can be revoked in case of any misleading or false representation, advertisements etc from his side.
- Non delivery as per the terms of the contract would lead to a complete refund of the cost borne by the customer along with the pre decided interest rate or pay monthly interest on each delay month to the buyer, if they refuse to take the sum altogether.
- The prescribed regulator will now have to give security as to quality of construction and provision of services to the customer for 5 years from the date of possession and upon any such reporting of error, the developer will have to rectify it within 30 days of complaint.
- Before actually getting a registered sale agreement signed, the buyer cannot ask for more than 10% of the property’s cost as advanced payment.
All of these mandates increase the productivity and value of the real estate industry, and set a benchmark for growth and development. The act lays down that each state establish its own Appellate Tribunal that liberates the honest man and disciplines the swindlers.
However, the fly in the ointment is that project delays due to delays in obtaining completion certificates/essential connections from government agencies such as sanctioning authorities are uncatered for in the act.
Nonetheless, the act definitely makes this sector seem more organised and hopeful of immense prosperity and pellucidity.