Previously the real estate sector in India was largely unregulated and unorganized, which left consumers with little or absolutely no clarity on the default promises made by the developers. This bill which will now be state-level RERA Act, benefits the consumers in the form of standardized processes and protect them with transparent functioning, leading for a boost in more deals and overall growth in this sector and eventually boosting Indian economy.
This kind of RERA Act is also present in other countries. In the US, there are multiple regulatory bodies ensuring overall safety and security at various levels of transactions between consumers and real estate developers. For example, the Department of Housing and Urban Development (HUD) was created to protect consumer interests involved in residential property transactions. End user issues are incorporated in the legal contract, not by the federal regulation. There are different real-estate licensing laws in addition to code of ethics for state-level US real estate transactions.
In the UK all investments in real estate development are regulated by the Financial Services Authority (FSA). All issues in property matters in the UK are regulated under the Property Misdescriptions Act 1991.
In India the Minister of Housing and Urban Poverty Alleviation has put light on this act with FAQs on RERA.
“The Real Estate Act” is intended to achieve the following objectives:
● Ensure accountability towards allottees and protect their interest;
● Infuse transparency, ensure fair-play and reduce frauds & delays;
● Introduce professionalism and pan India standardization;
● Establish symmetry of information between the promoter and allottee;
● Imposing certain responsibilities on both promoter and allottees;
● Establish regulatory oversight mechanism to enforce contracts;
● Establish fast- track dispute resolution mechanism;
● Promote good governance in the sector which in turn would create investor confidence.
● The rate of interest is required to be specified by the appropriate Government in the Rules.
● Open parking areas cannot be sold to the allottees.
● ‘Common areas’ and ‘community and commercial facilities’ are an integral part of the project, to be handed over to the Association of allottees.
● One common certificate for ‘occupancy certificate’ & ‘completion certificate’ covers all aspects and suffices the requirements under this Act.
● Occupancy certificate relates to the occupation of the apartment/building, which has provision for civic infrastructure such as water, sanitation and electricity and is habitable.
● Completion certificate relates to the completion of the entire project certifying that the project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority.
● The determination of the estimated cost of the real estate project is necessary.
● Ongoing or Incomplete projects and future projects are covered under the Act.”
Benefits of RERA for Indian Real Estate Sector
1) Quick and Transparent Processes:
Indian RERA is expected to deal with all the issues and complaints within 60 days. Such a timeline has never existed in the previous acts in real estate regulations.
All project information including but not limited to layout, approval status, contractor details, schedule of project, completion timelines, will be available in the RERA authority. The consumers will be readily provided with all information prior to any queries about the projects.
2) Standard Property Rankings:
The RERA authority will also be involved in grading properties, which will directly help consumers to deal in real estate market with confidence. Now with clear project details, consumers will deal without any fear.
3) Common Rules:
In case of residential properties, RERA registration is mandatory for all projects greater than 500 sq. mt. area or those buildings with more than eight apartments.
4) RERA to Boost Real Estate Sector
RERA is expected to boost real estate sector, like countries which benefited from this kind of a regulatory framework, from more foreign investments in the real estate sector.
5) No Obligation or Influence on Decisions.
Positive changes are expected with transparent and effective functioning of this sector as the RERA authority has full financial and administrative independence to aid in for regulations.
6) Swift Transactions:
Real estate transactions would be as easy as opening a bank account after state RERA becomes effective with necessary processes in place.
7) Online Medium:
RERA will have all the information on the online medium. This will not only help the Real Estate Sector, however all the corresponding segments of markets like Banks, Insurance companies, Law firms will benefit from this.
8) Indian Economy:
The fluency of exchanges in this sector will help build a seamless platform for the Indian Economy as a whole. This will benefit all customers, agents, developers, investors, public and private sector companies involved in real estate transactions.
With several positive measures undertaken, the upcoming projects in Pune will definitely have a positive end for both- realtors as well as consumers.
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