Working of RERA after its enactment

 

Real Estate is one of the most globally recognized sectors. In India, real estate plays a major role in employment generation. It is the second-largest employment generation sector in India. The real estate sector in India is expected to reach US$ 1 trillion in market size by 2030 and will be contributing to 13% of the total GDP. This makes it one of the most promising sectors of the Indian economy.

While we continue to emphasize this aspect, it is important to highlight the contributing factors that are strengthening the real estate sector in India. RERA was a significant decision taken by the government in 2016.  The RERA Act has transformed the real estate sector and has boosted investment in this segment.

 

Why was RERA needed?

The real estate sector is one of the major sectors in India. Despite the growing importance, there were drawbacks like lack of policies, transparency and regulations in the market. To make the functioning of this sector more efficient, the RERA Act was introduced. It has shifted the trust back in the real estate sector. Implementation of RERA has brought in several other benefits like:

1.           Maintaining the interest of the allottees

2.           Ensures that the entire transaction process in the real estate segment is transparent.

3.           Creating a pan-India standard protocol to bring professionalism to the business.

4.           Ensure a seamless flow of information between the buyer and the seller.

5.           With the RERA implementation, the builders have become more responsible.

6.           It is ensuring that the real estate functioning is transparent and reliable

7.           Increasing the confidence amongst the vendors and investors. 

 

How has RERA redefined the functioning of the real estate system?

Analogous to the present scenario, the real estate market was lopsided, with more inclination towards builders and developers. However, with the introduction of RERA, the government has introduced a model code that defied the course of functioning for the developers, ensuring fair transactions between the buyer and the seller.

It is expected that the market will become more organized with the introduction of RERA. The objective of the introduction of RERA is to set accountability for the developers and maintain transparency.

As per RERA, every state and union territory needs to have its own regulatory body and rules that will govern the functioning of the real estate body in every state and union territory.

Security: As per RERA, around 70% of the money of buyers and investors will be kept in a separate account. This money shall be used only for the construction of the project. The developers cannot ask for more than 10% of the property’s cost as advanced payment.

Quality: If there is an issue with the building or construction within the five years of purchase on the property. This issue must be rectified within 30 days of the complaint filing.  

Authorization- One cannot advertise, sell, build or book a plot without registering it with the regulator.

 

Which projects get the RERA approval?

The following projects fall in the category of RERA regulation and need to be approved. These include:

1.           Commercial and residential projects

2.           The project must be more than 500sq meters or 8 units.

3.           Projects that don’t have the completion certificate

4.           Projects that are only for renovation/repair / re-development

This was the basic information on RERA and how its implementation will make the real estate sector more regulated and transparent.

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