Gujarat is the first state to notify the rules pertaining to RERA and complying with the same requires the real estate promoter to even get the accounts relating to a scheme audited within six months after the conclusion of every financial year by a chartered accountant. This Act will overall give wide powers to the Government and ensure buyers a good night's sleep.
Imagine a middle class family putting all their investment in a real estate property only to find later that they have been duped of lakhs of rupees by the builder with no property and a huge financial loss on their head.
After implementation of RERA such situation might well be a thing of the past.
RERA is a very positive initiative implemented by the government. It will increase transparency between the buyers and the developers. Also it will provide an organised form to the real estate sector. For instance, many developers ask for exorbitant amount from the buyers. RERA will eschew such circumstances and will lay down a systematic and fair procedure.
Some key provisions of the RERA act on Real Estate are listed below :
Under RERA, each state will have to setup regulatory bodies as appellate tribunals to solve the disputes between buyer and developer within 120 days.
The developer will have to put 70% of the money collected from a buyer in a separate account to meet the construction cost of the project.
RERA also seeks to impose strict regulations on the promoter and ensure that construction is completed on time.
The buyer will pay only for the carpet area (area within walls). The developer can’t charge for the super built-up area, as is the practice at present.
Developers will be able to sell projects only after the necessary clearances. Under RERA, developers and agents will have to register themselves with the regulator and get all projects with more than eight apartments registered before launch.
Most importantly many developers will postpone launches as they will take time to understand the full impact of and they will focus to complete existing projects.
Have The Prices Increased?
Another impact / unintended consequence of RERA is that while it increases the cost of compliance for the developer, it is very likely that the burden of this cost will get passed on to the home buyer. This will finally result in a higher price to be paid by the home buyer.
All–in-all, this is a welcome act that benefits both the home-buyer and the developers; more importantly it brings more transparency to the Real Estate sector thereby allowing the sector to realize its potential.