RERA is expected to shake up the real estate industry and bring in greater accountability while ensuring an environment where only genuine and authentic developers and companies thrive on the basis of the trust and respect that they get from customers with proper checks and balances at every step. It is seen as an act that will safeguard the interest of the homebuyer along with timely and quality construction.
+ves for the investor :
- A Golden Opportunity : when it is in effect, the first thing buyers can expect is transparency in real estate sector. Since you will get long-term guarantee on construction quality, all you need to do is to be with a trusted real estate developer in Bangalore.
- Real Estate Investment Is Now Safer : RERA is the ability to make safe transactions. Under this Act, your investment will become more transparent. The property you will invest in, a 70 percent of the amount will be kept in escrow account. It means that buyers are going to get more safety for their investment.
- Fast process : With RERA, home buyers and investors will not have to wait for the properties after the deadlines. Under the act, it is mandatory for the developers to deliver projects on time. It means that investors can put their money in real estate and they will not have to face the risk of unexpected delays.
- Only genuine Sellers & Agents will be there : When RERA is implicated, the market will get better as the genuine real estate developers and agents will be able to register themselves under the act. So it will definitely bring the genuine sellers and buyers together.
So ..what is RERA?
RERA (The Real Estate (Regulation and Development) Act) is an Act to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment of building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal . (source: wiki)
How will RERA impact homebuyers?
Customers who are looking at purchasing an ongoing project or a project that is yet to be registered will be ensured better protection under RERA because the terms of project delivery will be as per the Act .With RERA, there would be mandatory disclosure of project details, including those of the promoter, project, land status and clearances. This would increase the credibility of developers and would protect consumer rights as well. Home buyers confidence is now set to increase on the back of these sentiment-building measures of the government
How will Real Estate Regulatory Act affect builders and developers?
Builders will have to submit project-related information such as sanctioned and proposed plans, pending approvals, estimated project cost (separately for land and construction), and other cost-related data to the real estate regulatory authority (RERA) for obtaining registration.
Accuracy of each and every bit of information provided to RERA will be scrutinized carefully to avoid any oversight and non-compliance on part of the promoters. In effect, real estate sector is likely to become more transparent, accountable and user-friendly than ever before.
With RERA bringing in greater checks and balances, promoters(Builders & Developers) can finally offer clean and efficient services to the prospective consumer.
The RERA Cheat-Sheet
(Source :profit.ndtv.com/news/property )
- RERA is a model law, which means the Centre can recommend it but it is up to the states to formulate and pass their own laws, since land is a state subject.
The Centre has described RERA as the beginning of a new era where the consumer will be king. Union housing minister Venkaiah Naidu said rights and obligations of buyers, developers and real estate agents are clearly defined in the Act and any aggrieved party can seek redressal for violation of terms of agreement by the other party.
- Under RERA, real estate developers and agents have to register with their respective state regulatory authorities by July 30. They must also deposit 70 per cent of the funds collected from buyers in a separate bank account to be used only for the construction of the project, to ensure timely development. New projects must have all approvals before launch.
- Promoters must have the consent of two-thirds of the buyers in a project before making any change in the number of units or other structural changes. RERA prescribes penalties, including imprisonment on developers who delay projects or do not deliver on promises. Developers are required to disclose their project details on the real estate regulator’s website, and provide updates on construction progress.
- RERA also states that any structural or workmanship defects brought to the notice of a promoter within a period of five years from the date of handing over possession must be rectified by the promoter. For delayed possession, developers need to pay an interest rate of 2 percentage points above State Bank of India’s lending rate.
- RERA also prescribes imprisonment of up to three years for errant developers. A developer can sell only on the basis of carpet area which will help homebuyers understand what they will be paying for each square foot they will get for use.
- In the last few years, sluggish economic growth and delays in getting approvals stalled several projects, leaving buyers waiting for their homes and developers holding high debts. It also put a strain on investors such as banks, private equity firms and non-banking financial companies.
- Analysts say the real estate sector will be able to attract higher institutional funding as the Act will bring in much desired transparency in the sector, which contributes about 9 percent of India’s gross domestic product, boosting buyer confidence.