Here is how RERA is going to help home buyers
The much-awaited Real Estate Act came into force from Monday (1st May 2017) with a promise of protecting the right of consumers and ushering in transparency. RERA is the Real Estate Regulatory Authority announced by the Real Estate Bill in all states and federal territories. This Authority will be above the real estate regulator to ensure transparent transactions and provide clarity on governing and monitoring of real estate projects. Previously the real estate sector in India was largely unregulated and unorganized, which left consumers with little or absolutely no clarity on the default promises made by the developers. This bill which will now be state-level RERA Act, benefits the consumers in the form of standardized processes and protect them with transparent functioning, leading for a boost in more deals and overall growth in this sector and eventually boosting Indian economy.
Here is how the new real estate bill will benefit consumers
First and the foremost, RERA establishes the state authority and vests authority on the Real estate regulator to govern both residential and commercial real estate transactions and with this it shall improve the governance hold on the real estate sector reducing disputes to a great extent. The state Real estate regulatory authority shall become the government body to which any grievances, problems, issues can be addressed to for solutions.
It is expected to deal with all the issues and complaints within 60 days. Such a timeline has never existed in the previous acts in real estate regulations. All project information including but not limited to layout, approval status, contractor details, schedule of project, completion timelines, will be available in the RERA authority. The consumers will be readily provided with all information prior to any queries about the projects.
The RERA authority will also be involved in grading properties, which will directly help consumers to deal in real estate market with confidence. Now with clear project details, consumers will deal without any fear.
Developer will have to put 70% of the money collected from a buyer in a separate account to meet the construction cost of the project. States can increase the ceiling but not lower it. This will put a check to the general practice by majority of the developers to divert buyer’s money to start new project instead of finishing the one for which money was collected. This will ensure that construction is completed on time.
The bill will make it mandatory for all commercial and residential real estate projects where the land is over 500 sq. mt. or eight apartments will have to register with the regulator before launching a project. By making registration of the project compulsory with the regulatory authority, the bill aims to provide greater transparency in project marketing and execution. Failure to do so will attract a penalty which may be up to 10% of the project cost and a repeat offence could land the developer in jail.
RERA is likely to bring in more transparency in the Real estate sector, it shall lead the sector to be able to attract more FDIs. This is set to improve the feasibility of financing options availability in the market leading to increased investments and propelling more FDIs and thereby making the system more efficient and home-buyers friendly. Taking into consideration all these factors, the ultimate beneficiary is going to be the homebuyer.