Real Estate Regulatory Authority

RERA – Real Estate Regulatory Authority

The bill was passed in the parliament in the year 2016.

The Real Estate transactions were very uneven and were heavily in favor of the developers. The home buyers had a hard time dealing with the real estate principles and rules. There was a lack of transparency in the dealings of the real estate. For preventing these loopholes, the government took an initiative and proposed its the model which provides equitable and fair deals and transactions between the buyer and seller.

Importance of RERA

The introduction of RERA is of great importance for the Real Estate sector as it is one of the leading revenues generating sector of our country and it needed some transparency and a Regulating Authority which could keep a check on transactions dealt with by the developers.

Scope of RERA

The scope of RERA is very wide with respect to the Real Estate Sector. It covers all the new as well as ongoing projects that are under construction projects and it also includes both the residential and commercial buildings. It covers all the parties included in Real Estate projects. Even the Real Estate brokers and agents also fall under the ambit of this Act. The main motive of RERA is to provide ease and comfort for the homebuyers that is why every state is required to set up an Appellate Tribunal for addressing the grievances of the homebuyers.

All the builders are required to register the projects with the Tribunal before the initiation of those projects. The registration mandates them to express the details of the project and the deadline for the completion of the project and if the deadline is not met, the builders have to face the penalties and criminal charges. They even need to compensate the home buyer for the delay in the project. Before the existence of the RERA Act, the builders used to divert the funds of the ongoing project to start a new project because of which delay occurred in the completion of individual projects. Now, the builders have to deposit the 70% of the fund in a separate bank account so that the fund is not diverted and is used in the project for which it was sanctioned.

Objective of RERA

The main object of the RERA is to revive the faith of the buyers in the Real Estate sector and to bring transparency in Real Estate transactions. RERA aims to protect the rights of the buyers by establishing the Real Estate Regulatory Authority (RERA) will provide a grievance system in the Real Estate sector. It also aims to increase the credibility of the Promoters, Real Estate brokers and agents which would aid in preventing the unnecessary delay in the completion and delivery of the projects. The RERA Act provides for the establishment of the Appellant System for Grievance Redressal and to prescribe the penalties and charges for the defaulters.

The Present Scenario

 Even though the RERA has established quite some time ago, the operational status of it still varies in most states. 74% of buyers are not even aware that, under the regulations, they are required to check if the project has been registered with the RERA.

While in states like Maharashtra the websites have already been set up and are functioning efficiently, in many more states like Haryana, builders have to physically go to the RERA offices to verify their registration and the status (completed or not) of their projects.

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