The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, is a significant legislation aimed at regulating the real estate sector in India. Enacted to protect the interests of homebuyers and promote transparency and accountability in the real estate sector, RERA has brought about several changes in the way real estate projects are developed, marketed, and sold in the country.
Introduction to RERA
RERA was enacted by the Indian Parliament in 2016 and came into effect on May 1, 2017. The primary objective of RERA is to create a transparent and accountable real estate market in India. The Act seeks to address the issues of delays in project delivery, lack of transparency, and fraud in the real estate sector, which have been long-standing concerns for homebuyers.
Key Provisions of RERA
Registration of Real Estate Projects: One of the key provisions of RERA is that developers need to register their real estate projects with the respective state RERA authority before advertising or selling plots, apartments, or buildings.
Deposit of 70% of Funds in a Designated Bank Account: RERA mandates that developers must deposit 70% of the funds received from homebuyers in a separate bank account. This measure ensures that developers do not divert funds from one project to another, thus safeguarding the interests of homebuyers.
Timely Completion of Projects: RERA aims to ensure timely completion of real estate projects by imposing penalties on developers for delays in project delivery. Developers are required to provide a timeline for project completion at the time of registration, and any delay beyond this timeline attracts penalties.
Transparency and Disclosure: RERA mandates that developers must provide complete and accurate information about the project, including details of the promoter, project layout, approvals, timeline for completion, and status of approvals. This information is made available to the public on the RERA website.
Establishment of Real Estate Regulatory Authority: Each state and union territory in India has established a Real Estate Regulatory Authority (RERA) to oversee the implementation of the Act and to resolve disputes between developers and homebuyers.
Conclusion
RERA has brought about a significant transformation in the real estate sector in India. It has increased transparency, accountability, and efficiency in the sector, making it more conducive for homebuyers. The Act has also brought about a shift in the way developers operate, emphasizing timely delivery and adherence to regulations. Overall, RERA has played a crucial role in protecting the interests of homebuyers and promoting the growth of the real estate sector in India.