The real estate sector has long been known for its lack of transparency, unreliable practices, and unregulated environment that often left homebuyers vulnerable and disillusioned. However, the introduction of the Real Estate (Regulation and Development) Act, commonly known as RERA, has been a game-changer in empowering home buyers and revolutionizing the real estate market. This landmark legislation has brought about significant changes in the industry, ensuring a more secure and reliable environment for both buyers and developers.
What is RERA?
RERA, which stands for the Real Estate (Regulation and Development) Act, was enacted by the Indian Parliament in 2016 with the objective of bringing transparency, accountability, and efficiency to the real estate sector. Its primary aim is to protect the interests of home buyers and promote fair practices in the real estate market. Under RERA, each state and union territory in India is required to establish its own regulatory authority to oversee the real estate sector within its jurisdiction.
Ayaansh Infrastructure, the top builder in Vizag, has been registered under the AP RERA Act, safeguarding the interests of home buyers.
Objectives of RERA
RERA is driven by several key objectives that aim to transform the real estate sector into a more buyer-friendly and organized industry:
Developers are now obligated to register their projects with the regulatory authority, providing comprehensive information about the project’s layout, timeline, approvals, and other relevant details. This transparency ensures that buyers have access to accurate information before making a purchase decision.
RERA mandates that developers maintain a separate escrow account for each project, where a minimum of 70% of the funds collected from buyers must be deposited. This measure prevents developers from diverting funds to other projects and ensures that the allocated resources are utilized for the intended project.
3. Timely Delivery
RERA sets strict deadlines for project completion and possession. If developers fail to deliver projects on time, they are liable to compensate buyers with interest on the amount paid and even face penalties.
4. Quality Standards
The Act also emphasizes the quality of construction by requiring developers to adhere to certain standards. This ensures that home buyers receive properties of the promised quality.
5. Legal Recourse
RERA provides a platform for home buyers to seek redressal for grievances and disputes through an established mechanism. This offers a faster and more efficient alternative to the traditional legal process.
Benefits RERA has brought to Home Buyers
The implementation of RERA has yielded several tangible benefits for home buyers:
1. Enhanced Confidence
With the increased transparency and accountability brought about by RERA, home buyers are more confident in their purchasing decisions. They can access detailed project information on the regulatory authority’s website and make informed choices.
2. Reduced Fraud
Cases of fraudulent practices have significantly reduced due to the stringent registration and disclosure requirements imposed on developers. Buyers are less likely to fall prey to misleading advertisements and unreliable promises.
3. Timely Possession
RERA’s strict project completion timelines have ensured that home buyers receive possession of their properties as promised. This has alleviated the stress and uncertainty associated with delayed projects.
4. Investment Security
The escrow account provision safeguards buyers’ investments, as developers can only utilize the funds for the specific project they were collected for. This reduces the risk of financial mismanagement.
5. Effective Dispute Resolution
RERA’s dedicated dispute resolution mechanism offers a quicker and more efficient resolution process, saving buyers from the prolonged legal battles that were previously common.
Concept of Carpet Area
One of the significant aspects introduced by RERA is the concept of carpet area. Carpet area refers to the actual usable area within the walls of the apartment, excluding common areas like corridors, staircases, and balconies. This ensures that buyers are aware of the exact space they are purchasing and helps prevent discrepancies in measurement. RERA mandates that builders advertise and sell properties based on their carpet area, promoting transparency in property transactions.
How has RERA’s Introduction Changed the Real Estate Sector?
The introduction of RERA has had a profound impact on the real estate sector:
Developers now need to adhere to higher standards of professionalism and accountability. This has encouraged the growth of reputable developers who prioritize customer satisfaction and ethical practices.
2. Shift in Buyer Perception
With the increased transparency and timely delivery, the perception of the real estate sector among buyers has improved. More individuals are now willing to invest in properties, leading to a healthier market.
3. Reduced Delays
The strict project completion timelines have significantly reduced project delays. Developers are now motivated to complete projects on time to avoid penalties.
4. Quality Focus
Developers are incentivized to maintain quality standards to uphold their reputation and comply with RERA’s requirements. This has led to a higher overall quality of construction.
5. Increased Investment
The improved buyer confidence and security have attracted higher levels of investment in the real estate sector, contributing to its growth.
The Real Estate (Regulation and Development) Act, or RERA, stands as a beacon of change in the Indian real estate sector. By focusing on transparency, accountability, and efficiency, RERA has empowered home buyers and transformed the industry into a more buyer-centric and organized environment. The benefits of RERA extend beyond the buyers, positively impacting developers, investors, and the overall growth of the real estate market. As the sector continues to evolve under RERA’s guiding principles, the dream of owning a home becomes a more secure and achievable reality for countless individuals.