The inception of the Real Estate Regulatory Authority (RERA) in 2016 was a landmark move for the real estate sector. The past five years of RERA increased opportunities to cement trust and credibility between buyers and builders. Though RERA introduced some revolutionary changes, some aspects need on-ground implementation.
1st May, 2016, the day when Real Estate Regulation and Development Act 2016 was enforced putting an end to real estate scams and insecurities of home buyers. That was the time when the industry was in a dire need for a concrete regulatory mechanism, which could retain the faith of home buyers in the real estate sector. The developers and stakeholders, with initial apprehensions of absorbing and navigating through the new legislation accepted this new guidebook for the real estate regulations.
Now, fast forward 5 years later, RERA Act has transformed the real estate sector and formed a robust, trustworthy and credible real estate ecosystem. RERA works as an armour for real estate investors, and home buyers. The act requires builders to update the status of their under-construction projects on regular intervals, which protects the rights of the investors/homebuyers and voices the issues of complainants.
It’s been 5 years of RERA, which gives us all reasons to look back and sum up some hits and misses of this revolutionary act.
Hits
Regaining the Trust of Home Buyers
RERA has welcomed standardisation in the real estate industry and reinforced trust from the stakeholders.
Now, buyers are sure that the money invested in an under-construction project would be utilised well.
The RERA Guidelines say that all builders must open an escrow account and deposit 70% of the money collected from buyers in that account and withdraw money only for buying raw material for that project.
States Embracing the Game Changer Law
Eventually, all states of the country embraced this revolutionary real estate law. All 30 States/UTs have formed their own Real Estate Regulatory Authority, out of which 28 have set up Real Estate Appellate Tribunal.
Real Estate Appellate Tribunal
In order to exercise the conferred powers and perform the assigned functions under the RERA Act every state government establishes an Appellate Tribunal.
Record Number of Complaints Resolved
There has been a significant rise in the number of complaints taken up by the state authorities.
Approximately more than 65,539 complaints have been resolved by the Real Estate Regulatory Authorities across the country till date.
Some states, which were initially reluctant to set up RERA Authority and take buyers’ complaints have now successfully resolved record number of complaints.
Brokers and Agents to Register themselves with the State Authorities
More than 50,256 brokers and property agents have registered themselves with the respective state authorities. Since most of the complaints are now solved at RERA level, there are fewer cases, which appear in the court. This in return saves a lot of money for buyers and builders.
Misses
RERA Rules Formed by Respective States
In order to establish a smooth process of operation between the state, developers and home buyers, the state governments were given the power to form rules in adherence to their respective land and reform laws. Going against the said provision, many states made amendments in the rule to benefit developers. The term – ongoing projects was used just to keep some projects out of RERA’s purview. Dismissing the law, the state of West Bengal also introduced their own West Bengal Housing Industry Regulatory Authority. This raised questions on the efficacy of RERA.
Setting Up a Single-Window Clearance Mechanism
Real Estate Developers have to go through a vicious cycle of permissions, (which include 70 clearances and NOCs) to market any project. The whole process sometimes takes up to 2 years to accomplish. In spite of this, the authority did not introduce the single window clearance policy, which could have put an end to the unnecessary delays and stretched timelines. The Uttar Pradesh Government is in talks about offering single window clearance to its state projects but we hope to see this becoming a practice across the country.
RERA cannot become a super regulator as land is a state’s subject. RERA reserves the rights to take an action against allottees and agents. In case an action impacts a particular project or allottee, RERA should be granted more powers to question the competent authorities to either take or refrain from taking an action.
The RERA regulations which were difficult to be implemented at first, are now considered beneficial for both builders and homebuyers. There is no denying the fact that RERA has brought the much-needed transparency and accountability to the real estate sector, which is expected to catapult the country’s property market to become a trillion-dollar industry in the next decade.
Also read: How has RERA fared in the last four years and what more needs to be done?
