The Real Estate Regulatory Authority enacted in 2016 was one of the best things that could have happened to protect the interests of homebuyers from fraudulent builders as well as to bring clarity and transparency into the real estate industry. The Act makes it mandatory that any construction or project that’s larger than 500 sq meters or greater than eight apartments needs to be registered with the Regulatory Authority before its launch.
Aside from providing all the details of their project on the authority’s website, this action will also provide greater transparency in project marketing and execution. It’s also expected to leave homebuyers less frustrated and project developers more accountable. One of the main attributes of this Act is that homebuyers will no longer have to bear financial losses due to delayed projects. RERA is also expected to boost the confidence of potential home buyers by providing a five-year warranty on the structure of their homes.
Kerala state in the south had already formulated the Kerala Real Estate (Development and Regulation) Act in 2015, but the rules were yet to be fully finalized with the change in governments and delays. But with the advent of the central RERA Act implemented in 2016, the earlier KRERA had to be repealed and the current RERA Act has now been put into practice.
The RERA Act ensures that there will be a revival in the real estate industry in a big way Post-GST and demonetization if the policy is enacted in the states in its entirety. Since all relevant information related to every project will be available on the website of the regulating body, it will empower the homebuyer and provide greater faith in this sector.
With this new law, homebuyers can’t be taken for a ride anymore as they will now only pay for the carpet area (area within their four walls) and not the super-built area which also includes common areas – as was the earlier practice.
Initial teething problems are expected as builders adjust to these new laws, but demands are only expected to go north with the greater transparency coming in. Investor confidence is expected to return and boost the realty industry. Builders are expected to be reticent initially in announcing new projects till they get the hang of the new laws.
However, at the end of the day, only good things are expected to come out of this new Act.
