Is India Ready for Regulation & Development Act (RERA) in Real Estate?

The Real estate panorama is all set of change due to the appointment of regulators associated with the Real Estate Industry. Whatever real estate industry witnessed in the past, was due to absence of the regulator. The real estate sector is all set to make a mark with the appointment of the regulator from May 1, 2017, the date when the Real Estate (Regulation and Development) Act, 2016 (RERA) becomes effective in the entire country. The rules and regulations will be made for each state and union territory.

On Real Estate Prices

Even after lack of new demand, demonetization and huge unsold inventory, the prices of real estate have not come down. The builders are offering very few discounts to the customers. Earlier, all the risks associated with delays , quality , changes in the project were borne by the customer but now the same will be borne by the dealers. The cost will now be borne by the developers but some premium amount will be paid by the buyers to transfer the risk of the same to the developer.

Delayed Delivery

One of the biggest pain for the buyers is the delayed delivery of the project. Untimely and false promises have been the biggest pain for the buyers. Most of the projects fail to get completed within the stipulated time primarily because funds were diverted to new projects by the builders instead of using them in finishing the current projects. To put a stop on such situations, the RERA Act has put down the stringent rules as per which the developer has to maintain separate account for each project wherein 65-70% of the money received from buyes needs to be deposited .

Ongoing Projects

RERA achieves to cover both the new and the existing and on-going. For all the projects, where the completion certification timelines have crossed, the developers will have to publicly show the original sanctioned plans with specifications and changes made later, total amount collected from allottes, money used, original timeline for completion and the time period within which the developer undertakes to complete the project, duly certified by an engineer/architect/practising Chartered Accountant.

Registration of Projects

The builder will have to register all the projects and will have to furnish all the information related to land, property , financial statement , copy of deed and other documents . The builders will be issued a registration number project wise and tower wise. The buyers have full right to ask about the registration number from the builder to check the authenticity of the project.

Quality of the Project

RERA will keep special focus on the quality of the project. The regular supervision from the RA authority and the stringent rules and regulations will ensure quality is not compromised at any cost.