Real estate is a significant sector that plays a crucial role in the economic development of any country. However, it is also an industry that has been plagued by various issues, such as delays in project completion, unfair practices, and lack of transparency. To address these concerns and protect the interests of homebuyers, the Indian government introduced the Real Estate Regulatory Authority (RERA) Act in 2016.
What is RERA?
RERA stands for Real Estate Regulatory Authority. It is an Act passed by the Indian Parliament to regulate and promote transparency in the real estate sector. The primary objective of RERA is to protect the rights and interests of homebuyers and ensure timely completion of real estate projects.
Key Features of RERA ACT 2016
The RERA Act 2016 has several key features that aim to bring about transparency and accountability in the real estate industry. Some of these features include:
- Registration of Projects: Under RERA, developers are required to register their projects with the respective state’s real estate regulatory authority. This ensures that only genuine and credible developers can operate in the market.
- Disclosure of Information: Developers are mandated to provide complete and accurate information about their projects, including layout plans, land status, approvals, and timeline for completion. This enables homebuyers to make informed decisions.
- Escrow Account: RERA requires developers to deposit a certain percentage of the project’s funds into a separate escrow account. This ensures that the funds are utilized only for the specific project and prevents diversion of funds to other projects.
- Carpet Area: RERA defines the carpet area of a property, which is the net usable area within the walls of a unit. This prevents developers from misleading buyers by including common areas, balconies, and other spaces in the total area.
- Timely Possession: RERA ensures that developers adhere to the promised timeline for project completion. If there are any delays, the developer is liable to compensate the homebuyer for the same.
- Complaint Redressal: RERA establishes a mechanism for the resolution of disputes between homebuyers and developers. It provides for the establishment of Real Estate Regulatory Authorities and Appellate Tribunals at the state and central levels.
Benefits of RERA ACT 2016
The implementation of RERA has brought about several benefits for homebuyers as well as the real estate industry as a whole. Some of the key benefits include:
- Transparency: RERA ensures transparency in the real estate sector by mandating developers to provide accurate information about their projects. This helps homebuyers in making informed decisions.
- Accountability: RERA holds developers accountable for any delays or discrepancies in project completion. This encourages developers to adhere to the promised timelines and deliver quality projects.
- Consumer Protection: RERA provides a robust mechanism for the resolution of disputes between homebuyers and developers. This ensures that the interests of homebuyers are protected and they have a platform to voice their grievances.
- Professionalism: RERA promotes professionalism in the real estate industry by setting standards and guidelines for developers. This helps in weeding out unscrupulous players and fostering a more reliable and trustworthy market.
- Investor Confidence: The implementation of RERA has boosted investor confidence in the real estate sector. The transparent and regulated environment created by RERA attracts more investments, thereby facilitating the growth of the industry.
Conclusion
The Real Estate Regulatory Authority (RERA) Act 2016 has been a significant step towards bringing transparency and accountability to the real estate sector in India. By protecting the interests of homebuyers and ensuring timely completion of projects, RERA has instilled confidence in the industry and paved the way for a more trustworthy and reliable real estate market.
This post was published on January 27, 2024
L