RERA has been one of the biggest reforms taken to re-structure the real estate market and address the problems that home buyers face while buying the house. RERA or the Real Estate (Regulation and development) Act came into effect from May 1, 2016. It is an initiative from the government of India to promote and enhance transparency in the real estate market.
The projects registered under the RERA have to abide by certain rules and guidelines laid by the government. This helps in minimizing the corruption and discrepancy in the buying and selling of different apartments and property. It is sought to give the Indian real estate market a regulator.
Many issues have been arising in the real estate market where buyers claim that they have been deceived by the developer or the builder and that the real estate market is profitable only to the sellers and buyers have to pay an unjustified amount for various projects.
As a result of such cases, it was important to formulate consistent and fair guidelines which will ensure that the transactions are equitable. Thus, RERA was implemented by the government. Since then, it has proved to regularize the real estate market and has granted fair provisions for the home buyers
Major provisions under RERA
There are various provisions included under the RERA. The major provisions include the registration. It has made mandatory for all the commercial and residential projects which exceed the area of 500 sq. meters or have eight apartments to register with RERA. RERA has also clearly defined the carpet area as the total usable area available in the apartment. This prevents the builders to quote the price on the basis of the built up and super built-up area instead of the carpet area and deceives the buyers. Therefore, this provision is highly in favor of the home buyers as it will increase the transparency in the whole project-making and will help them to pay the reasonable and justified amount.
Impact of RERA on Real Estate and Homebuyers
Home buyers have to pay a well-calculated and justified amount and about 70% of the project amount has to be transferred into an escrow account. This will ensure that builders do not get involved in multiple projects simultaneously and will hence help in avoiding the delays in the project. Evidently, RERA has had a huge impact on both, the Real estate and the Homebuyers. Listed below are some of the major impacts that RERA has on Real estate and Homebuyers. If there are three payment defaults by the buyers, then developers have the right to give a 15 days’ notice to the buyers and end the agreement thereafter. The buyers now have to pay only 10% instead of 20% after the agreement with the builder is registered. RERA is now functional in many states of India such as Uttar Pradesh, Maharashtra, Delhi, Rajasthan, Chandigarh etc. All these guidelines and provisions under RERA help to promote the accountability, discipline, security, compliance, and transparency in the real estate market. Evidently, it has had a huge impact on the home buyers and real estate.