The real estate sector is a crucial driver of economic growth in India, contributing significantly to GDP and employment. However, for many years, the sector was plagued by issues like project delays, lack of transparency, and disputes between buyers and developers. To address these issues, the Indian government introduced the Real Estate (Regulation and Development) Act, 2016, commonly known as RERA.
What is RERA:
RERA, the Real Estate (Regulation and Development) Act, 2016, was enacted by the Indian Parliament to regulate the real estate sector and ensure the protection of home buyers while boosting investments in real estate. The Act mandates the establishment of a Real Estate Regulatory Authority in each state and union territory to oversee the sector and address grievances.
Objectives of RERA :
The primary objectives of the Real Estate Regulatory Authority are as follows:
- Customer Protection : RERA is focused on safeguarding the interests of homebuyers by ensuring fair practices, providing timely information, and resolving disputes between buyers and developers.
- Promote Transparency: It aims to bring transparency to the real estate sector by mandating developers to disclose project details, including project timelines, legal approvals, and financial information, enabling buyers to make informed decisions.
- Standardization and Accountability: RERA sets guidelines and regulations for real estate developers, ensuring adherence to quality standards, construction norms, and timely completion of projects. It holds developers accountable for any deviations from the agreed-upon terms and conditions.
- Establishment of Regulatory Authority: It establishes a dedicated regulatory authority that acts as an independent body to oversee the real estate market, enforce regulations, and resolve disputes effectively and efficiently.
Functions of RERA:
The RERA Authority performs the following functions:
- Regulate and Register: This Authority has the jurisdiction to list and control real estate brokers as well as various real estate developments.
- Keeping and Disseminating Records: It must issue and keep project records available for public review.
- Disclosures and Advertisements: RERA regulates the advertisements and promotional materials used by developers and agents to ensure that they provide accurate and truthful information to buyers, preventing misleading claims.
- Consumer Grievance Redressal: RERA establishes a mechanism for addressing consumer complaints and disputes. It provides a platform for buyers to file complaints against developers, and RERA facilitates their resolution through mediation or adjudication.
- Store Promoters Database: It must retain a database of all projects containing proof as well as images of the promoters or enterprises whose licenses were canceled.
- Obligation Compliance: It is responsible for ensuring that all requirements imposed on builders, property allottees, and estate agents are met.
- Order Compliance: It must ensure that all of its rules and regulations are followed.
- Keep Track of All Real Estate Agents: The RERA authority must keep track of all real estate agents. It also keep details and photos of agents whose licenses have been revoked or suspended.
Benefits of the RERA Act, 2016:
The RERA Act brought significant advantages to India's real estate sector:
- Statutory Regulation: It enforced statutory regulation on real estate projects, ensuring adherence to guidelines and timelines.
- Completion Assurance: Buyers gained assurance of project completion, reducing the risk of investing in delayed or abandoned projects.
- Statutory Obligations: Developers and buyers had statutory obligations, emphasising compliance with legal mandates.
- Access to Funds: RERA approval made projects more appealing to financial institutions, granting developers easier access to funds.
- Buyer Satisfaction: RERA-approved projects offered transparency, adhered to timelines, and complied with regulations, resulting in higher buyer satisfaction.
- Beneficial for All: The positive impact of RERA extended to developers, real estate agents, and buyers, benefiting the entire real estate ecosystem.
Key Points:
- 35 States/UTs have established Real Estate Regulatory Authorities.
- 29 States/UTs have set up Appellate Tribunals, while 27 have appointed Adjudicating Officers.
- 1,51,113 projects and 1,06,545 agents are registered under RERA.
- 1,47,383 complaints have been disposed of by Real Estate Regulatory Authorities nationwide.