When the real estate sector of India was in great need of better management from different perspectives, the implementation of RERA has come up as the best remedy to the bucket full of issues. The Real Estates Regulatory Act, 2016 has been and is probably going to set some new dimensions of transparency in respect of the real estate dealings throughout the country. RERA is going to affect the activities and responsibilities of the builders, brokers and the buyers with the provisions and penalties that are mentioned under it. If you are looking in to get some proper insights of this act you are going to get it all here.
What is RERA?
The Real Estate Regulatory Act is an act that has been passed by the Indian Parliament with the perception of protecting the interests of different parties involved in the real estate deals. This act poses the requirement of the State governments to come up with their separately framed rules for the different activities in the real estate sector. This act holds significance in making real estate to be a state subject. This central act was implemented with a view of bringing in some effective changes in the real estate trends.
Significance of the Act
Whenever you discuss real estate projects, there have been numerous issues that presented the buyers’ complaints and dissatisfaction in respect of the services they get. There are also many incidents where the homebuyers had to experience fraudulent deals. Therefore this Act was brought up as strong set solution for the inconvenience that had remained to be the identity of the real estate deals. Hence under this act the Union Ministry of Housing and Urban Poverty Alleviation asked the states to formulate regulations and rules that can invoke fair practices and clarity in action. These regulations are also meant to impose appropriate penalties on errant builders for their fraudulent moves.
Hopefully the implementation of an act like this is going to bring some better results for the economy and the consumers also.
Remedy for the ailing real estate sector
RERA will emphasize on the issues that are known to pop up frequently and put barriers in the growth and development t of the economy and the real estate markets. The dissatisfaction of the buyers and brokers has been constant due to the below mentioned issues:
Prices: The earlier, unmanaged guidelines and pricing policies have led to much inconvenience for the aspirants of residential and commercial properties. However the new regulations and pricing rules will make a clear way for the possible deals available. This will let the buyers and brokers see to the best of their interests.
Delays: In the past years the experiences of the buyers had not been so pleasing because of the errant builders who usually chose to delay projects. Moreover a delay is not just a delay in ownership of the property but it also engaged the buyers’ funds in something that was probably able to bring up no considerable output. Obstacles had been common even before the construction can take up a start. The Act will positively lay stress on the completion of projects on time.
Construction quality: The use of poor material and subsequently the handover of buildings that are not at all reliable is a major issue posed among the buyers. However the RERA guidelines consider this to be one of the points which sum up to the important elements of the Act.
Title: Delays in transfer of title or fraudulent moves keeping the buyers deprived of the titles of their homes or other properties have been some common cases. But this effective implementation is going to put an end to the era of cruel builders or brokers with the smartly set procedures and policies.
The RERA plans and policies
The rules mentioned under the act instruct the builders and the brokers to carry out their deals as per the required guidelines. Any violations in respect of these guidelines or rules may be subjected to considerable penalties and punishments. Mentioned below are certain commonly set key provisions of the Act:
- To solve various disputes between the builder and the buyer, the states are supposed to setup regulatory bodies that are going to act as appellate tribunals.
- The developers and brokers will have to get their projects registered under the RERA so that appropriate measures can be taken to handle uncertain issues in future. This is also significant to ensure the clarity and relevance of the activities conducted.
- The developers are required to setup a separate account that will hold 70 percent of the total payments set aside for construction purposes. This escrow account will give all the details of the money that had been collected from the investors and the buyers.
- After registration, the developers are also required to submit the insights of other documents, legal titles, financial statements etc.
- In case, the delivery of projects is not made on the agreement date then the amount paid by the buyers will have to be refunded, considering the other interest rates and considerations in the agreement.
- Any advertisements, buying or selling of the projects after registration will be conducted as per the RERA guidelines.
- Apart from this the developers will be required to submit the original documents and specifications that prove them to be reliable. This will include details of the revenue collected, utilization of funds, expected time for construction and details of delivery. All this needs to be certified by an authorized professional namely, CA/engineer/architect.
Benefits for the builders
RERA is not limited to the good of buyers but will also have a lot to do for the growth seeking builders. RERA plans and policies will invoke efficient services, fair practices and also measurable corporate branding. This is all perfect to invite goodwill for the builders. The rules help them organize the use of funds making it more profitable.
Undoubtedly, the RERA implementation looks forward for better dimensions of growth and fair deals considering the interests of all the parties involved.