As a rescue to home-buyers, the much awaited RERA or the Real Estate Regulations and Development Act was implemented on May 1. As per the Act, each of the state in the country needs to frame and notify rules for governing real estate sector. At the same time a regulatory body needs to be set up to oversee the functioning of real estate in a particular state.
For end-user or home buyers
RERA enacted to provide consumer protection shall attend to their complaints against developers, promoters and brokers. There are also penal provisions laid down under the act which shall be effected in case when the promoters, developers and other stakeholders in the sector fail to comply with the regulations.
With better protection of their rights, home buyers under RERA shall also have a clear idea in respect of the property deal they are entering into. This is primarily owing to the fact that henceforth developers can sell property units basis the carpet area and also need to give a mention of the parking and common area.
Under RERA, it is now required for the developer or seller to sell the unit on the basis of carpet area and give details of common areas and parking areas separately. This means that homebuyers would have a far better idea of what they are getting into when they look up a project or enter an agreement.
With enough inventory in place in the sector, prices are expected to remain modest in the near term. However, the implementation of RERA might result in the lowering of property price for the end user. Also, RERA is expected to result in a slightly higher circle rate owing to the reduction in the overall black money component. Also, fluctuation in real estate price is also likely with the roll out of GST from July 1.
For Real Estate Developers
Real estate developers in the purview of RERA as part of the laid down Act are treading cautiously and doing all of their bit to complete ongoing projects on time.
Also, as mandated 70% of the amount obtained as sale proceeds for the project need to be put towards the completion of the residential project and not diverted elsewhere. On delay in projects, one of the experts reaffirmed that developers showed undue interest on investors and paid least attention on end-user or home-buyer which made them to siphon of funds in other projects.
New projects as well as ongoing projects that have not received occupancy certificate also need to register themselves with RERA without fail within three months time from the date of enactment of the Act.
Also, before all the necessary approvals for the proposed real estate project are obtained, developers can not engage in the selling of the project.
For Real Estate Brokers
RERA regulation also includes brokers in its ambit who play a vital role as an intermediary for all real estate transactions. Any sort of mis-selling by brokers shall result in penal recourse.
Much needs to be done for an all-inclusive RERA effect
As per a report, only 13 States and UTs have until now reported rules and notifications as required in the Act. The non-uniformity of rules across states as well as absence of designated regulator may create a lacunae failing the ultimate purpose of RERA.
Also, in some states including Gujarat , UP, Maharashtra and others the laid rules with considerable gaps shall not be able to provide a complete cushion to aggrieved home buyers who have faced hard repercussions on account of non-delivery of booked home on time as well as home buyers in new projects.