RERA: The Game-Changer for Real Estate Accountability in India
The real estate industry in India plays a vital role in the economy. However, it needed more proper regulation for a long time, leading to shady transactions and limited avenues for addressing grievances. The Real Estate Regulatory Authority (RERA) was established under the Real Estate (Regulation and Development) Act 2016 to address these issues.
RERA aims to create a fair and transparent environment for selling and buying real estate properties in India, particularly in the primary real estate market. Its primary goal is to protect the interests of homebuyers from fraudulent practices by promoters and real estate agents. This is achieved through a transparent process where sellers and buyers submit the necessary information to the regulator, ensuring accurate and easily accessible information for both parties. This accountability reduces the chances of fraud and malpractice. Additionally, a government body is empowered to mediate and resolve disputes between buyers, agents, and real estate companies.
The Act aims to establish a standardized regulatory framework across India, allowing states and union territories to modify it per their specific needs. Each state and union territory must establish its regulator and formulate rules that govern its functioning while adhering to the core principles of the central Act.
Some Salient Features
The Real Estate (Regulation and Development) Act (RERA) in India encompasses several important provisions to ensure transparency and accountability in the real estate sector. Let’s take a brief look at what the RERA Act entails:
- Properties in India: Registration of projects with RERA is mandatory for real estate projects exceeding 500 square meters or 8 apartments. It includes ongoing projects requiring completion and occupancy certificates.
- Details Furnishing: Promoters must provide project details, land approvals, completion schedules, promoter information, and carpet area for each housing unit during registration.
- Regular Disclosures: Promoters must submit project progress reports periodically, accessible to homebuyers through the RERA website.
- Grievance Redressal: The Real Estate Appellate Authority (REAT) resolves complaints within 60 days, providing an efficient forum for real estate companies and project appeals.
- Maintenance of Reserve Account: Promoters must allocate 70% of project receivables to a reserve account, safeguarding funds from diversion to other projects and ensuring timely completion.
- Accurate Title Disclosure: Real estate companies must declare their proper title and interest in the land, protecting homeowners against future defects.
- Standardized Sale Agreements: The Act establishes standardized sale agreements to prevent hidden clauses that could financially burden homeowners and promote fairness.
- Penalty for Violation: The Act imposes significant monetary penalties (10% of project cost) and imprisonment to deter violations and ensure compliance.
Challenges in Implementation
RERA is revolutionizing the real estate industry in India, transforming how properties are searched, tracked, and regulated online. While there are challenges in registering all projects and maintaining separate reserve accounts, RERA ensures the use of legal funds and transparency in project completion schedules. This leads to increased land and housing prices, meeting the growing demand for housing. Accountability and transparency are established, preventing false promises and arbitrary cancellations by promoters and real estate agents. There is no doubt that RERA brings much-needed change to Real Estate India.
Deregistration Policies
Deregistration of a builder under RERA is a severe penalty imposed for non-compliance. It can occur if the promoter defaults on implementing required measures, violates approval terms, or engages in unfair practices. The authority gives a 30-day notice and allows the developer to defend themselves. If found guilty, strict conditions or penalties may be imposed.
MahaRERA, the Maharashtra Real Estate Regulatory Authority, has recently received 107 applications for deregistration, with 41 properties in Pune. These applications reflect the challenges developers face, including lack of funds, economic unviability, litigations, disputes, and changes in government notifications.
The authority has established guidelines for project deregistration, considering it for projects without homebuyers or ensuring the settlement of rights and claims of existing homebuyers. In case of dissatisfaction with deregistration decisions, individuals can file complaints that will be promptly addressed.
These actions by MahaRERA demonstrate their commitment to implementing deregistration processes within the broader framework of RERA, aimed at protecting the interests of homebuyers and holding non-compliant builders accountable. Any homebuyer looking for properties in Gurgaon or other Indian cities should ensure RERA approval before investing his hard-earned money to avoid such complications.
Summary
Implementing a transparent procedure in the real estate industry empowers home buyers and creates a trustworthy ecosystem. This approach benefits all stakeholders, including the real estate companies, agents, and end consumers. By giving home buyers a more significant say in their purchases, RERA has created a transparent system that ensures fairness and accountability for all involved parties.
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