RERA

About:

• Real Estate (Regulation and Development) Act took effect in May 2016 to regulate and promote the real estate sector.
  
  
• Objective: It aims to bring about transparency and efficiency in an opaque industry and has a mandate to protect consumer interest, including establishing a speedy redressal system.
  
  
• Salient Provisions:
  • The Act is applicable all over India, except J&K. It applies to all under-construction projects with a plot size above 500 sq. m or projects with 8 apartments or more;
    
    
  • Each state has to set up its own regulator, keeping the central law as the framework;
    
    
  • Real estate agents must be registered with the authority before executing any transaction;
    
    
  • Developers cannot advertise, market, book, sell or invite persons to purchase a plot, apartment or building without registering the project with the regulator;
    
    
  • The project can be cancelled if rules are not regularly followed;
    
    
  • Developers are accountable for after-sale services; The developer is liable to rectify structural damages for five years.
    
    
  
  
  
• Significance:
  • The idea behind Rera was to create a legal framework for the fair and transparent functioning of the industry. Earlier, the realty sector functioned in a legal vacuum.
    
    
  • Before Rera, most builders took buyers for granted, swindled funds in different projects thus leading to delayed delivery across several cities.
    
    
  • In the two years, the number of new launches has come down because there is greater pressure on developers to be transparent about the use of money.