5 years of RERA Act: Successful implementation! How it has benefitted both developers and homebuyers - Win-Win!
The Real Estate (Regulation and Development) Act, 2016, was a paradigm shift for the real estate sector of India.
The Real Estate (Regulation and Development) Act, 2016, was a paradigm shift for the real estate sector of India. When the Real Estate (Regulation and Development) Act, 2016 (RERA) was enforced, numerous home buyers, apprehensive of seeing real estate projects getting stalled and hearing news of other related scams, breathed easy. At that juncture of time, there was a dire need for a solid regulatory mechanism over the real estate development to keep the faith of homebuyers’ intact in the real estate sector. Annuj Goel, MD, Goel Ganga Developments, shares his knowledge on how five years of RERA has changed the approach of the real estate sector.
"Once the Act was enforced, the possibilities to commit mistakes or carry out fraudulent practices shrank massively for eerie builders. While, for trustworthy and renowned builders, although the RERA Act did increase the number of compliances, it helped them in cementing and enhancing their credibility in front of the potential and existing homebuyers. A robust grievance redressal system has been prepared under the RERA Act to redress and solve home buyers’ grievances. Depending upon the issue or the complaint, an issue or complaint can be filed before the respective State RERA Authority and the appellate RERA Tribunal. Hence, if the customer is not satisfied with the construction quality of the housing unit or if there exists any other dispute, they can approach the respective RERA authorities for redressal," says Annuj Goel.
"When RERA was enforced, home buyers and investors celebrated alike that the real estate sector of India finally had an oversight authority that could address their complaints and see that the concerned developers kept to their word. Thus, RERA guaranteed that only those projects which were RERA registered could put advertisements and also prevented the real estate developers from making big yet false statements, which were not substantiated by ground realities and promises. Property price rationalisation and the need for clear enumeration of “carpet area” made things simpler for home buyers and boosted their trust manifold," Annuj Goel added.
"The greatest achievement that one could attribute to RERA is that of ensuring much-needed transparency and accountability in the Indian real estate sector. Both Real Estate Developers and other stakeholders had initial apprehensions about navigating through the new legislation, but with time, all the industry players in the sector have accepted RERA as the definitive ‘guidebook’ for the real estate regulations with clearly mentioned Dos and Dont’s which have standardised norms," Annuj Goel said.
Moreover, Annuj Goel says, "Promoter/s, according to the Act, can be held responsible for mistakes or defects in project construction. In case any structural anomaly or defect in quality, the providence of services, or any other commitment of the real estate developer in accordance with the ‘agreement for sale’ relating to such development is brought to the developer’s notice under five years by the home buyer, from the date of handing over the property, it would be the developers' duty to rectify such defects without levying any extra charges from the homebuyer. If the promoter fails to correct the highlighted defects, the allottees are entitled to get the rightful compensation prescribed in the RERA Act & Rules."
"The enforcement of the setting up of escrow accounts (with 70 percent of total accrued funds) meant that developers could no longer divert the funds to other projects. This legislation ensured timely completion of the under-construction projects. At present, a RERA registration is seen as a mark of credibility and the undisputable viability of the real estate project and reputation of the concerned developer."
"According to RERA, every real estate developer will be required to provide a definitive delivery date for the handover of property possession to the home buyer. In case the real estate developer cannot finish the project until the scheduled date, they can face heavy penalties under RERA Act, and this has ensured timely delivery of projects across India. By making the real estate developers accountable and promising rightful compensation to the homebuyers, real estate transactions over the last five years have increased manifold. Presently, 31 States/ Union Territories have notified rules under RERA." Annuj Goel said.
"After five years of successful implementation, the real estate industry feels that the enabling regulations of the Act were difficult to absorb at first, but they have benefitted both homebuyers and the developer fraternity alike. The RERA Act has ensured a robust, trustworthy and credible real estate ecosystem, and it is expected that the law will keep evolving with the addition of more enabling sections in the coming time," concludes Annuj Goel.
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