The Act for setting up Real Estate Regulatory Authority (RERA) is a watershed in the history of real estate development of India. Now on, states stand empowered to set up their state authorities to regulate the sunshine sector of the economy. To be created on the lines of the already existing authorities in the booming cities of Dubai, RERA shall monitor both the residential and commercial sectors all over the country. The authority has been set up in view of the long pending demands of the consumer awareness groups and suggestions of various bodies for improving the market sentiment in the real estate sector.
Once set up, this authority would also be the grievance redressing forum for those investing in the real estate. This will happen after the ratification of the new law by state legislatures. Also, the builders will not be talking in terms of super areas; rather, the property will be sold in terms of carpet area. The builder will have to park 70 per cent of the project fund in a dedicated bank account that shall further strengthen the customers’ sense of security when they make the investment. The Act makes it mandatory for the builder to share the complete plan, layout, mandatory approvals and even the status of land title. Even the names of the subcontractors would have to be made available to the customers. Furthermore, the builder will not be able to make any changes to the plan once a particular product has been sold. In the eventuality of the project getting delayed, he has to pay the same interest as the EMI being paid by the consumer to the bank, back to the consumer. Any project of 500 sq mts or above and consisting of eight apartments or above has to be registered with the authority. It will also ensure entitlement of customers for the after sales service. Any infringement of the provisions of the clauses and sub-clauses of the working of the authority would entail heavy penalizing, even to the extent of imprisonment.
However, in the light of the provisions of the Act, the government too should further smoothen the procedure for giving permissions. Red tapism needs to be reduced and government reforms should be applied promptly all over the country. All information and status updates should be made available on the Internet.
If acted upon to its utmost spirit, the RERA Act will bring cheer to the sector as more and more end investors shall find themselves empowered and sure of their investments.