As the changes occur in the economy recently there need to be regulators in every segment to see whether no crime or fraud is committed. While, there is some present currently such as TRAI (Telecom Regulatory Authority of India), RBI (Reserve Bank of India), SEBI (Securities and Exchange Board of India) for their respective departments to care for. There hasn’t been a single authority to look after the real-estate sector where too some activities are conducted where the buyer/ the consumer has to pay the price if the deal goes awry. Well, this is not the scenario anymore. Last year, in the month of March, an act was passed out to establish authority for the real-estate sector. The act was named as Real Estate Regulatory Authority Act, 2016 (RERA). It came into force from this May i.e. 1st May 2017. The act was passed in the manner so that justice for the consumer and proper practices should be maintained in the real-estate sector by the developers. Wherein, every state and union territory will maintain a separate body for the real-estate sector where the developers have to report to them. Well, here is everything you need to know about it.
Real Estate Prices
After the RERA came into action the prices of real estate dropped down as it was expected. Huge unsold inventory, lack of demand and demonetization has led the builders and the developers bringing the rate down and provide discounts and freebies to the customers. Well, before RERA, the risk of the delays, quality, title and all types of changes the cost was suffered by the customer. But, now these will be suffered by the developer and a premium would be demanded by the buyer ensuring the transfer of risk to the developer. While the developer cannot absorb these funds but can transfer them back to the customer in the form of price rise.
One of the major hurdles faced by the buyers were the projects constructed in the year 2010-2013 had delayed delivery due to the allocation of the funds into new projects. But, after the implementation of the RERA act, the depositors have to maintain a ‘separate account’ wherein the money deposited from buyers will be utilized in construction. Also, the developers have to furnish additional information regarding the ongoing project besides the deposit.
Developers have to make public the original sanctioned plans, changes, the amount deposited, allocation of money, the timeline for completion and more certified by an engineer/architect/ practising CA for its current projects. Each regulatory will register and regulate these projects and the agents connected in each chain. Also, a website would be handled by the public so to have a track on the registered projects with all the information available regarding the registered projects under the RERA inclusive of the promoters and the agents attached to the respective projects.
Also, a matter of concern for RERA is the quality of construction. Protection can be availed by the people for 5 years after construction by RERA if there is some flaw in the project due to quality. The developer will be noticed upon it and has to rectify the same without taking any further charges in 30 days of the notice. No promoter can advertise or sell any property without the registration of property with the RERA. Each advertisement needs to be carried with the RERA registration number.