Your search results

RERA: Transforming India’s Real Estate Landscape with Transparency and Accountability

Posted by Warren Martin on January 4, 2024
RERA: Revolutionizing Real Estate in India

RERA: Transforming India’s Real Estate Landscape with Transparency and Accountability

Introduction to RERA Act

RERA stands for the Real Estate (Regulation and Development) Act, which is a significant piece of legislation in India aimed at regulating the real estate sector. The Act was passed by the Indian Parliament in 2016 and came into effect on May 1, 2017. The primary objectives of RERA are to bring transparency, accountability, and efficiency to the real estate industry and to protect the interests of homebuyers.

Key Features and Provisions

  • Establishment of Regulatory Authorities: RERA mandates the establishment of state-level Real Estate Regulatory Authorities (RERAs) to oversee and regulate the real estate sector within each state and union territory.
  • Mandatory Registration of Projects: Developers are required to register their real estate projects with the respective state’s RERA before advertising or selling. This includes both residential and commercial projects.
  • Project Details and Timelines: Developers must provide detailed information about the project, including the layout plan, the schedule for completion, and other relevant details. The Act aims to ensure that developers adhere to the timelines promised to homebuyers.
  • Advance Deposits: Developers are not allowed to demand more than 10% of the property’s cost as an advance or application fee before signing a sale agreement.
  • Separate Escrow Account: Developers are required to maintain a separate escrow account for each project to ensure that funds collected from buyers are utilized for that specific project’s development.
  • Carpet Area Specification: RERA emphasizes the use of carpet area (the actual area within the walls) for the calculation of property prices, providing greater clarity to homebuyers.
  • Defects Liability: Developers are liable for any structural defects or poor workmanship in the project for a specified period after possession. They must rectify these issues at no additional cost to the buyers.
  • Penalties for Non-Compliance: RERA imposes penalties for non-compliance with its provisions. This includes fines for developers who fail to register their projects or violate other regulations outlined in the Act.
  • Rights of Homebuyers: RERA grants certain rights to homebuyers, including the right to obtain accurate project information, timely possession, and compensation for delayed possession.

Establishment of Regulatory Authorities

In India, various regulatory authorities govern different sectors, and one such authority introduced in 2016 is the Real Estate Regulatory Authority (RERA) under the Real Estate (Regulation and Development) Act. RERA’s primary objectives include safeguarding homebuyers’ rights, ensuring transparency in the real estate sector, and promoting efficient transactions.
Key Aspects of RERA:
Registration of Real Estate Projects: Residential and commercial real estate projects must undergo mandatory registration with RERA. Developers are obligated to submit details like layouts, sanctioned plans, and other relevant project information. Protection of Homebuyers: RERA addresses common issues faced by homebuyers, such as project delays, structural flaws, and inadequate information. It enforces strict guidelines and penalties for developers failing to meet specified timelines. Transparency: RERA mandates developers to provide accurate and detailed project information, including status, layout plans, approvals, and timelines. This empowers homebuyers to make well-informed decisions based on reliable information. Reducing Fraud and Misrepresentation: RERA plays a pivotal role in curbing fraudulent practices and misrepresentation within the real estate industry.

Mandatory Registration of Projects

The Real Estate (Regulation and Development) Act (RERA) in India mandates real estate developers to register their projects with the respective state’s Real Estate Regulatory Authority before launching any residential or commercial real estate project exceeding 500 square meters in land area. This compulsory registration is designed to enhance transparency, establish credibility, and safeguard customers from delays and fraudulent practices. The registration process involves the submission of various documents, and detailed procedures for each state can be found on the respective state’s RERA website. The registration signifies the credibility of builders and real estate agents, and without it, developers are not permitted to market or advertise their projects. The RERA registration is initially valid for five years and requires renewal thereafter.

Importance of Checking RERA Registration

The Real Estate Regulatory Authority (RERA) in India stands as a crucial regulatory framework, dedicated to safeguarding homebuyers’ interests and fostering transparency within the real estate sector. RERA registration is obligatory for all real estate projects and plays a pivotal role in ensuring transparency, accountability, and consumer protection. Several reasons underline the importance of checking RERA registration:

Transparency and Accountability:

RERA registration compels developers to adhere to fair practices, providing accurate project information. This transparency empowers homebuyers to make well-informed decisions based on reliable data.

Financial Security:

RERA mandates developers to maintain separate accounts for each project, securing buyers’ payments. This measure prevents fund diversion to other projects, ensuring financial security for homebuyers.

Project Completion Timelines:

Developers must specify project completion timelines in accordance with RERA regulations. In case of delays beyond the specified timeline, developers are liable to compensate buyers, promoting accountability and timely project completion.

Protection Against False Advertisements:

RERA regulations prohibit misleading information in project promotions, shielding homebuyers from fraud and misrepresentation.

Reduced Chances of Delays:

RERA registration reduces the likelihood of delays in real estate projects, as developers are held accountable for meeting specified completion timelines. To verify a project’s RERA registration, one can check the project’s website or the official RERA website of the state in which the project is located. Ensuring a project’s registration under RERA provides homebuyers with protection and facilitates informed decision-making.

Compare Listings