All You Need to Know about RERA
- Tuesday 18th April 2017
- Author: Vikas Tawar
The Real Estate (Regulation and Development) Bill, 2016 was introduced by Dr. Girija Vyas, Minister of Housing and Urban Poverty Alleviation in 2013.
RERA aims to create a regulatory body for the real estate sector. The main aim of the Act is to protect the interest or buyers and promote timely delivery of properties or projects.
Industries like telecom, banking, stock markets, insurance, pension, film, FDI, food, cricket, etc. all have regulators in the name of TRAI, RBI, SEBI, IRDAI, PFRDA, CBFC, FIPB,FSSAI and BCCI, respectively.
The Real Estate (Regulation and Development) Bill, 2016 was introduced by Dr. Girija Vyas, Minister of Housing and Urban Poverty Alleviation in 2013. The Union Cabinet of India approved 20 major amendments to the Bill upon Rajya Sabha’s recommendations, in 2015. It then finally got approved by the Rajya Sabha and the Lok Sabha on 10th and 15th March 2016, respectively and finally became an Act in May 2016.
What is It?
RERA aims to create a regulatory body for the real estate sector.The main aim of the Act is to protect the interest or buyers and promote timely delivery of properties or projects. In order to achieve this, registration of the projects covering either more than 500 sq. ft. land or involving at least eight apartments has been made compulsory. The builder or “promoter” will need to furnish the details of the project online and this information would be available to the public. Earlier, builders used to include extra spaces in the carpet area and charged buyers 20-30 percent more than what would have been the charge on actual carpet area. The unaware buyer also used to pay the asked amount. The RERA specifically defines the carpet area to avoid unaware buyers to fall prey to the promoters’ tactics. Next, promoters would be required to keep 70 percent of the amount received from buyers in a separate escrow account and would be allowed to use that money only for the development of the project for which the money has been paid. This will not only ensure speedy development of the project but will also dissuade promoters to misallocate the funds. Last but not the least, promoters would need to get various approvals from all the competent authorities before starting off with a project. This will ensure buyers’ protection from future legal issues.
Industries like telecom, banking, stock markets, insurance, pension, film, FDI, food, cricket, etc. all have regulators in the name of TRAI, RBI, SEBI, IRDAI, PFRDA, CBFC, FIPB,FSSAI and BCCI, respectively. However, the sector which has the third largest contribution to GDP, which attracts most of our investments and which is the root cause of black money and corruption, is ironically not regulated. The sector I’m referring to is real estate where lacks and crores of black money exchange hands. Buyer pays in unaccounted cash to lower the registration amount and hence, stamp duty and seller demands money in cash to evade taxes. The use of black money in realty transactions creates a win-win situation for both the parties.
RERA aims to solve all these problems by making the transactions transparent. Compulsory registration and revelation of details of the properties will narrow the trust deficit in real estate industry and improve transparency. Moreover, timely delivery of projects will lead to an increased demand. People currently fear to invest in real estate because the projects are not completed for years and their money remains locked. Now since RERA promises timely delivery of projects, demand is expected to increase and this will also lead to decrease in inventory levels. Currently one of the reasons for high prices is high inventory. When the inventory will decrease, prices will automatically decrease, triggering even more rise in demand. In nutshell, the cycle of real estate where inventories, prices, supply, demand and interest rate chase each other, will run smoothly and in a balanced way!
- RERA’s impact on Maharashtra
- How much has RERA assisted home buyers in last one year?
- Advertisement guideline in RERA
- Simplified process of RERA Registration in India
- A simplified guide to RERA Goa
- All you need to know about Agent registration in Haryana
- All you need to know about Agent registration in Chhattisgarh
- Real Estate Project Registration in RERA
- Insights about GOA RERA for Real Estate Agents
- A Guide to RERA Karnataka
- Expectations of Real Estate Industry from budget 2018
- All facets of GST rate cut from 12% to 8% on affordable homes
- All you need to know about Project registration in Andhra Pradesh
- All you need to know about Agent registration in Andhra Pradesh
- RERA identifies ‘Carpet Area’
- All you need to know about RERA in Uttarakhand
- MahaRERA to issue notice to real estate brokers soon
- All you need to know about RERA in Karnataka
- RERA Karnataka Big Move- Sent legal notice to 780 projects
- “2017” - Most crucial year for Indian Real Estate
- RERA will now be governed under the Ministry of Urban Affairs
- Home loan industry suffers biggest drop in growth since 2013
- RERA fee structure for registrations in Bihar
- Major causes of litigations on builders under RERA
- MahaRERA brings changes in Procedure for Transferring or Assigning Promoters Rights and Liabilities to a Third Party
- Title Insurance under RERA - what promoters and homebuyers must be aware of !
- RERA fee structure for registrations in Jharkhand
- RERA report card : An analytical summary of the Real Estate Act so far !
- How absence of RERA is affecting the growth of Real Estate in these states
- Everything you need to know about RERA in Tamil Nadu !