The Real Estate (Regulation & Development) Act was passed on 10th March 2016. However, it was fully implemented on 1st May 2017. The impact of RERA has been quite noticeable thanks to its strict reforms.
The act was passed by the Parliament of India to protect homebuyers from illegal & unethical trade practices.
Another objective of this act is to boost investments in the real estate sector by bringing more transparency in its transaction process.
Take a look at the new set of rules laid down by RERA:
- The act makes it mandatory for all commercial and residential developments where land is above 500 sq. Metres or eight apartments to register with the Real Estate Regulatory Authority for launching the project
- Developers have to park 70% of their project funds in one dedicated bank account through cheques. This will stop them from making investments using booking amounts
- A developer must quote prices based on carpet area and not the super-built up area
- The home buyer can call the developer anytime within one year after taking possession for after-sales services, damage repairs or compensation for any inadequacies
- Any developer found violating the order of appellate tribunal of RERA could face a jail term of up to three years and a fine
- The developers must also keep a clean record and the right credentials to continue their business practices.
All in all, the implementation of RERA is poised to bring in positive changes to the industry. With the passage of time, we’ll get to witness a significant boost in sales thanks to more customer confidence and a sharp decline in unethical trade practices.