The Bill of Real Estate Regulatory Authority (RERA) was introduced and approved in 2016. The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution. For on-going projects which have not received completion certificate on the date of commencement of the Act, will have to seek registrations within 3 months. Application for registration must be either approved or rejected within a period of 30 days from the date of application by the RERA. On successful registration, the promoter of the project will be provided with a registration number, a login id, and password for the applicants to fill up essential details on the website of the RERA. For failure to register, a penalty of up to 10 percent of the project cost or three years’ imprisonment may be imposed. Real estate agents who facilitate selling or purchase of properties must take prior registration.
Advantages of RERA:
- Right to Information about the Property. This is in favour of the buyers.
- Standardized carpet area.
- Builders will be held responsible for any defect/fault in the construction.
- Grievances will be addressed and solved quickly.
- Builders won’t be able to delay the projects.
- Foreign investors would be attracted due to transparency.
Disadvantages of RERA:
Some of the disadvantages are for Developers:
- Developers cannot use this fund in other projects hence new projects cannot be taken up on account of fund of previous projects.
- Regulation requires approvals and permissions which may result in delay of starting/finishing of projects.
- Loss of interest of builders in Real estate projects due to strict regulations and reduced profit.
- Real estate has good employability potentials, but due to RERA developers are discouraged hence employment opportunities are lost.
- Real estate involves use of construction materials which are means of source of earning to many small and large scale groups but due to RERA the number of new projects are reduced hence demand of materials is reduced therefore, it has effect on economy and employment both .