The Real Estate Regulatory Authority Act (RERA) was introduced to bring in transparency, accountability, and financial control into the highly disorganized Indian real estate sector.
It came into effect on May 1, 2017, and has recorded registrations of 40,000+ real estate agents, and 52000+ projects till date.
The act has made it mandatory for the states and union territories to constitute a regulator and devise the rules to govern the functioning of the regulator.
Objective of RERA
The prime objective of RERA is to ensure regulation and promotion of the real estate sector efficiently to protect the interest of home buyers.
Need for RERA
This act is needed because the Indian real estate sector is unsystematic and undeveloped.
It enhances transparency and accountability in real estate and housing transactions.
The real estate sector is expected to contribute 13% of the country's GDP by 2025, and that would make it the second-largest employer.
This act will boost domestic and international investment in the sector.
It protects the interest of the consumers.
It will ensure the timely delivery of projects.
Salient Features of RERA
Foundation and consolidation of the RERA in each state in India for observing and settling questions related to land dealings.
To provide an establishment for a fast-track dispute resolution mechanism through dedicated adjudicating officers and Appellate Tribunal.
It is required for an advertiser to transfer subtleties of the proposed venture, including subtleties of enlistment, kinds of apartment or plots booked, rundown of endorsements taken and the endorsements which are pending ensuing to initiation testament to the state's RERA authority.
RERA will either endorse or dismiss the application for enlistment within 30 days, failing which it will be considered as acknowledged for enlistment.
Both, the promoters and buyers, are liable to pay an equal rate of interest in case of any default from either side.
An aggrieved person may file a complaint with RERA for any violation or contravention of provisions of this act made against any promoter, buyer, or real estate agent.
Benefits of RERA Act
Builders have to obtain all necessary approvals and certificates of registration from the authority before the advertising and marketing of the project.
The property clearance and approvals should be obtained before starting the project work.
The real estate agents need to register with RERA in order to deal with the prospective buyers.
Builders need to consult at least 3-4 buyers before planning to modify the property.
Under this act, 70% of the payment is done by the buyer for financing the project, which is to be kept in an escrow account for the same project.
RERA prescribes sale agreement between buyers and builders.
Selling is to be done on the basis of the carpet area, and not the buildup area or super-buildup area.
Carpet Area
It is the net usable floor area of an apartment or bungalow, excluding the area which is covered by the external walls, under service shafts, balcony or verandah area, and exclusive open terrace area but includes the area covered by the internal partition walls of the apartment.
