The Indian real estate sector, once plagued by opacity and ambiguity, has undergone a remarkable transformation with the introduction of the Real Estate (Regulation and Development) Act, commonly known as RERA. Enacted in 2016, RERA aimed to instill transparency, accountability, and fairness into the realm of real estate. Let’s delve into some key provisions of RERA that have revolutionized the industry, ushering in a new era of trust and credibility.
1. Transparency through Approved Plans One of the cornerstone provisions of RERA mandates that developers must submit the originally approved plans for their ongoing projects. Moreover, any modifications to these plans cannot be undertaken without obtaining the written consent of the investors or buyers. This measure ensures that developers adhere to their commitments and deliver on their promises. By preventing unauthorized deviations, RERA paves the way for a more transparent and reliable real estate sector.
2. Shift to Carpet Area Pricing Under RERA, properties are now sold based on the carpet area rather than the super built-up area. This shift is a boon for buyers as it eliminates confusion and ambiguity surrounding the actual usable space. This change ensures that buyers pay for the actual area they will occupy, promoting fairness and eliminating the age-old practice of inflating prices based on built-up space.
3. Investor Protection through Timely Delivery Delays in project completion have long been a major concern for property buyers. RERA addresses this issue by granting investors the right to demand a full refund of their investment if a project faces significant delays. Alternatively, investors can choose to remain invested and receive monthly interest on their funds until possession is granted. This provision holds developers accountable for adhering to promised timelines and ensures a fair deal for investors.
4. Swift Issue Resolution RERA introduces a time-bound mechanism for issue resolution. If a buyer highlights any issue to the regulatory authority within five years from the date of possession, the developer is mandated to rectify the issue within 30 days. This provision empowers buyers to voice their concerns and ensures that their grievances are addressed promptly, further enhancing consumer confidence.
5. Escrow Account Protection To safeguard investors’ interests, RERA mandates that a minimum of 70% of the money collected from investors and buyers be deposited in a separate escrow account. This money can only be utilized for project construction and land-related expenses. Moreover, developers are restricted from demanding more than 10% of the property’s cost as an advanced payment booking amount before the registered sale agreement is signed. These measures prevent mismanagement of funds and provide buyers with a level of financial security previously unseen in the industry.
6. Regulation through Registration RERA brings developers under regulatory scrutiny by mandating that they cannot advertise, solicit, or sell any property without registering with the regulator. Post-registration, all advertisements soliciting investment must bear the unique project-wise RERA registration number. This requirement not only holds developers accountable but also provides potential buyers with verified information, enhancing the transparency of transactions. In conclusion, the Real Estate (Regulation and Development) Act has brought about a paradigm shift in the Indian real estate sector. By promoting transparency, protecting buyers’ rights, and establishing a regulatory framework, RERA has effectively revolutionized an industry that was long plagued by opacity and uncertainty. As the provisions of RERA continue to be implemented and enforced, the real estate sector is poised for a brighter and more trustworthy future.