Impact of RERA Act on Real Estate   

impact-of-rera-act-on-real-estate
Jul 11, 2017 Share

After the implementation of RERA on 1st May, 2017, all the builders were given a momentum till the end of July to list up all the projects under RERA. At the same time, the real estate agents who also play a crucial role in this domain are also in the process of registering themselves with the body.

When the act is expected to regain confidence of the home buyers, all the provisions stated in the enactment are also meant to safeguard the interests of the developers as well as the investors to a significant extent. Before its implementation, there happened to be a lot of confusions whenever any property transaction would go awry. However, with RERA stating a number of effective clauses, there has not only been a major reform in the domain, but a significant change can also be seen in the way real estate has worked till date.

A corrective course of action has already been executed, thereby favouring the interests of all the consumers and developers alike.

So, before we proceed with the impact of RERA on real estate, we would discuss what exactly RERA is. The Real Estate Act makes it mandatory for all the commercial as well as residential projects over 500 square meters to register with RERA in order to bring in greater transparency to the entire process. Also, the act makes it compulsory for every state and union territory to have its own regulator and set of conducts to preside over the way the regulator is functioning. Although, a number of states are yet to notify rules, some states like Maharashtra, Uttar Pradesh and Haryana have already started functioning in this regard.

Still, the question remains, why RERA? Was it really important for RERA to arrive? The answer would definitely be a big ‘Yes’! The home buyers have always been the ones to face the burden whenever any property dealing would go skewed. Whether there are delays in construction or the undertaken property gets fastened in several legal disputes or even the builder comes up with a number of changes in the building layout even after the purchase, it was always the buyer who had to make compromises. However, with RERA taking in, a single window is offered to the consumers to check out the entire credentials of every new real estate project that’s been proposed to purchase.

Also read: Major compliances rest with the promoter.

Major responsibilities of the builder

  • Register project with RERA
  • The amount should be withdrawn from a separate account
  • Website updation/ Disclosures
  • Promote Carpet area
  • If there is any alteration in the project, an approval of 2/3 allottees is required
  • All the project accounts need to be audited and should be readily available

 

Compliances to be followed by real estate brokers / agents

  • All real estate agents / brokers must obtain RERA registration.
  • Agents’ RERA number needs to be documented in every sale facilitated by him.
  • Registration can be revoked or blocked if any breach is made to conditions of registration for a specified time..
  • Agent cannot sell project that is not registered under RERA.
  • Books and records must be maintained.
  • Not be involved in unfair trade practices.
  • Agent needs to facilitate possession of all documents to the allottee at the time of booking.

 

Last updated on 1st July 2017

After coming into force on May 1, 2017, RERA has not only changed the entire way property market used to work till date, but has also converted all the promises into commitments, thereby bringing in much transparency in the real estate sector. When the developers have become more translucent in carrying out their obligations, the buyers have also happened to stay steer clear of their vows as well as liabilities. The welcome changes have brought in a huge alteration to the sector.

The real estate market has witnessed a new horizon in the country. With the watchdog called regulator making its much-required emergence in the scenario, every deal is now expected to be more than perfect! The home buyers can now go home with such security in mind that there will be no doubt and uncertainty related to purchase, as all the developers, promoters and agents are bound to get registered with the body. With the assurance that all the disputes will result in a process where the home buyers can hope to crack deals without any delay and confusion, there will be no payment obligation anymore.

Also Read: RERA Guidelines for Real Estate Brokers

RERA has actually done a world of good with the sentiments of the home buyers which, in turn, has also made space for functional professionalism in the sector, thereby infusing more confidence in the home buyers. The much-needed discipline has already made its influx and it has been nothing but a boon for this consumer focused industry. Truly described as the ‘short-term pain for long-term gain’, the RERA act is also anticipated to remove all the middlemen who are just out for laundering money.

At the same time, the imposition of RERA Act is likely to make the residential properties relatively cheaper.  When the business methodology of the builders will definitely come across a formative change in this year itself, the new pricing index will speak in the favor of both the developers and the home buyers. Nevertheless, the builders’ strategies are yet to experience a definite outcome- whether it’s been a bliss or curse for their cause. Still, most of the builders, who were yet to adhere to the new norms of the Act, have already started to reshape their old business schemes, thereby putting in much hope for a huge market revival.

To conclude, although it will take some time for the actual change to get visible, still RERA Act has already regained consumer confidence to a significant extent and seemed to bring in a poise to the over-priced real estate market in India.

Also Read:

RERA Guidelines
MahaRERA Defines Guidelines for Carpet Area

RERA Guidelines
RERA Guidelines For Real Estate Broker-Agent

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