The Real Estate Regulatory Act: An update so far
April 15th, 2017
The need to have a regulatory authority in real estate was long awaited and was finally implemented last year in May 1st 2016, after its proposal in January 2009. It might have taken 8years for the Act to come into play; however this Act is touted to bring in the biggest reform in the system. The agenda of the Real Estate (Regulation and Development) Act 2016 is to regulate and promote the real estate sector by monitoring transactions between consumers and promoters of residential as well as commercial projects. The aim is to fix 70% of the amount collected from the buyers for the specific project. This amount has to be deposited in a separate bank account to cover the cost of construction and the land cost. The prime focus of the Act is to protect buyers and help grow investment in Real Estate Sector.
To monitor the real estate sector and arbitrate disputes relating to Real Estate Projects, the Act has a separate provision called ‘Real Estate Regulatory Authority’ (RERA) to monitor the same. RERA will check all the under-construction projects and will help in getting rid of fly-by-night operators from the real estate sector. It will bring in stability and reliability by making the real estate sector mature on fronts like security, banking, indemnity etc. This will not only help in increasing investment into the sector and would also aid in bringing in the Foreign Investment (External Commercial Borrowings/Foreign Direct Investment). The implementation of RERA will bring a new hope for the people and builders together; the full accomplishment of RERA will be completed by May 2017.
Real Estate (Regulation and Development) Act, 2016 aims to enhance transparency, bring greater accountability in the realty sector and set disclosure norms to protect the interest of all stakeholders. It mandates that builders should divulge details of all inventory developments including those about the promoters, project layout plan, land status, approvals, agreements along with information of real estate mediators, contractors, architect, structural engineer etc. All these details should be uploaded on the website of the RERAs. Faster execution of property disputes will also be the prime focus of the RERA Act. The developer specific risks will now be well taken care of as this will revive the faith in builders, irrespective of the fact if they are new or old. This will shoot up the sales as consumers will be ready to invest in the real-estate market. The real estate regulatory authority will prove to be a robust body to set the rules in place. With the inception of RERA, the real estate segment is set to scale new heights as the move will have an overall positive impact on the sector.