Real Estate (Regulation and Development) Act, 2016 or RERA is expected to bring a revolutionary change in Indian realty market. The act was passed in March 2016 and came into effect from May 1, 2017. The government has also formed a body named RERA to deal with the regulation, execution and functioning of the governing law. The government body will focus on smooth and proper channelization of the builders, buyer and real estate agents to make Indian realty market more organized, transparent and reliable.
Broadly, RERA is said to be a buyer-friendly law, which will compel builders and agents to engage into fair practices. The Minister of Housing and Urban Poverty Alleviation said that the law will make “buyer the king” making transaction of properties in India more consumer friendly.
Giving more power to the buyers is not the only change RERA is expected to bring in the market. Given below are top 7 ways RERA will make real estate market in India better.
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1. Developers need to register new projects which come under RERA norms with the considered authority. Along with this, they also need to register ongoing projects within three months of May 1, 2017. This will largely affect the quality of construction as builders will have fear of the authority keeping an eye on their activities.
2. As per the law, while selling a property builders need to clearly define carpet area, which is the net usable area. This will help buyers get complete value for their money with clarity on transactions.
3. Though the entire nation comes under RERA umbrella, every state needs to establish a State RERA. It will compel states to regulate the market in their region.
4. The rule to register projects on over 500 square meters of land or with eight flats needs to be registered on state RERA website. Buyers now don’t need to check other property websites in India to get project details.
5. Buyers now don’t need to rely only on the Appellate Authority for solution of their problems. They can now also approach consumer courts. Further, buyers now have right to ask the builders for repair of structural defects until five years from the possession.
6. Builders need to deposit 70% of the sale amount in an escrow account for construction of the same project. In case of default, they need to pay interest to the buyers as per prescribed standards.
7. Increased trust and comprehension of the real estate market after implementation of RERA law will draw attention of overseas investors.
Impact of the Real Estate (Regulation and Development) Act can already be seen in the market. There are many real estate websites, which have already started making improvements to abide by the rules.
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