Real Estate Regulatory Authority (RERA), 2016: A boon for Homebuyers
The Sustainable development as well as overall growth of a nation is analyzed on the touchstone of the development of its real estate sector and infrastructure sector these two sectors are the biggest employment generating sectors. In recent years, it has been observed that the real estate sector has changed drastically and has largely been regulated because of a lack of standardization, consumer protection, and professionalism. At the same time, it is equally important to note that the consumer protection act affords curative remedy but it is not sufficient to cover all the concerns of promoters as well as buyers in that sector. For orderly growth and progress of this particular sector lack of standardization is observed as an impediment. Homebuyers faced severe problems like fraudulent constructions, delay in work, and incomplete construction work which demanded an effective regulation of the real estate sector as earlier to this, a view was developed that all the rules and regulations were in favor of promoters and new rules distorted this assumption. In order to counter the same problem, the Real Estate (Regulation and Development) Act, 2016 (RERA) was brought into force to inject the element of transparency, accountability, and efficiency by defining rights and obligations of the promoters, developers, and buyers immaculately. It also ensures the protection of the interest of the consumers in the real estate sector.
Learning from the Past Problems
In the past, consumers were to deposit a certain amount of money as booking charges so as to stationed their benefaction in a particular unit and later pay the remaining amount either wholly or via installments being unaware whether their amount deposited are being applied in the right direction or not. The activities of the builders were such that they used to appropriate amount of one particular project to the other one thus, causing a delay in the completion of the work. It has been observed that promoters used to advertise and sell apartments based on undetermined areas of coverage and as a matter of fact, home buyers were paying more and in turn, were receiving fewer benefits in terms of an effective space against the amount so paid. The issues concerning the delay in position and attainment of future projects and the absence of any regulatory authority to supervise the same made the home buyers stand on a weaker pedestal. The act aims to facilitate the government’s vision of ‘housing for all and reinstate the confidence of homebuyers in the real estate sector. There is destitution in the housing and infrastructure sector of India considering the increased prices of the real estate sector. In furtherance, the real estate sector is dull and unchecked which creates a distress condition for the consumers.
Enactment of RERA: Accounting for Transparency
After the effectuation of the Act, there was a prototype shift from its preceding governance to the current times. The Act now covers commercial buildings along with residential buildings with the objective of trade or profession in connection with its affairs in the real estate sector taking into consideration that they are commensurate with the area of land or the number of flats. Through the effective implementation of RERA, various problems that are encountered by the consumers were taken care of through effective regulation. Under the Act, registration was made mandatory in order to promote standardization.
In order to promote a buyer-friendly approach, RERA has made it mandatory for the promoters to complete their work within a specified period of time, and contravention of completion of work will attract liability on the part of the promoter and the buyer is entitled to withdraw without depriving the buyer of other remedies. If the promoter is not completing the project on time or is delaying the possession to the buyer under such a particular circumstance it is the liability of the promoter to return back the amount paid prior at the time of withdrawal. If the promoter is found liable for delaying the possession to the buyer then the registration of the promoter can be canceled and a new promoter can be appointed to complete the work. The Act has categorically defined the term ‘carpet area’ hence creating an impression in the minds of the purchasers that they are paying for the effective space allotted and utilized by them. In order to make purchasers aware of every piece of information on the development of the project, it obligates developers to create a website within a year where they are directed to update the present status of the project, registration of the project thus, perpetrating transparency. Therefore, the Act is a measure to end the irregularity, unaccountability, and other deficiencies present and gives some light to the growing transparency, accountability, regularity, and more essentially, developing a positivistic attitude.
Reverberations of RERA
Effectively, it can be formulated that the implementation of RERA is pro-consumer legislation, and if effectively implemented it can pervade the effect of transparency and accountability in the real estate sector which is a pre-requisite to gain consumer confidence and if the consumer confidence is achieved the real sector will grow tremendously. The impact of RERA is observed on all the sectors of commercial, residential as well as retailers. However, in terms of demand and supply greater impact has been observed in residential growth as compared to the other two sectors. Apart from the developers, the regulations are made applicable by the adjudicatory authority to real estate agents/brokers while dealing under the regime of RERA. Subsequent to the commencement of the Act, undergoing projects will come under the umbrella of RERA only when within a duration of three months registration of Promoters is done.
International Scheme on Real Estate
Real Estate is a globally recognized sector and has contributed immensely to the progress and growth of the nations. In the international era, the contention of the home buyers was that the transactions pertaining to the real estate sector are asymmetrical, lopsided, and in the favor of the developers. The absence of transparency, accountability, and complexity in procedures proved to be a disincentive to the investors. In the primary market particularly, every state aspired a regulator to create equitable and fair transactions between the buyers and sellers of the property. In the U.S, Property Law and Real Estate Law encompasses an exclusive sphere where Federal and State statutes govern in consonance with common law at various strata.
With respect to the aspects of ownership and usage in the United States, there is no soul regulatory body but there are several bodies that govern and regulate and have concerns with the same. The Real Estate Settlement Procedure is an Act that is effectuated to protect the interest of the land users and consumers in matters concerning residential properties also. In Dubai, the land department provides eclectic services to its clients concerning organizing, planning, and observing projects in a technical sense as well as financially as a whole. In the past, it has been witnessed that the English reforms which were of radical and extensive nature laid a great emphasis on the public attention on the development of public control of land use.
In order to ease, govern, and regulate transactions in residential projects along with commercial projects RERA has come up with solutions to the problems which were prevalent previously. It has been observed that apart from being a Central Act it also has a touch of state-level which attracts investment in the real estate sector by reinstating consumer confidence, protecting buyers’ interest, and setting up an Appellate Tribunal to look after the disputes. This will accordingly lead to a decrease in litigation cases because of stringent rules and regulations in the substantial unscrupulous sector. Though the act proves to follow a pro-consumer centric approach to a great extent. However, when the projects are not completed on time, sometimes it becomes burdensome on the developer because the argument put by the developer is that lack of funds by the authority in an appropriate period of time. It can be put forth that the act has a single-window system to have a check on the allowed activity which is just a recommendation. An issue arose as to the binding value of the aforesaid provision because it is left open to the states to enforce upon the discretion thus, this points to the fact that there is no permanent solution for the same. Though the Act is equipped with some of the loopholes but it can be immaculately stated that the act has created a foundation stone for the real estate sector.
The content of this article is intended to provide a general guide to the subject matter. Best Property Lawyer advice should be sought about your specific circumstances.