It has been five years since the Real Estate Regulation Act (RERA) has been enacted. This law has been a great transformation in the real estate sector and is helping it become what it is supposed to be. The first week of May 2016 was the first time RERA was enforced in the country. This has given the real estate sector a formal structure but also allowed property buyers and investors the luxury of being heard. Their issues and complaints are paid more heed and concern than before. It has standardized the industry in the ways that were required. Even for the stakeholders, it provides more security and assurance than before. For instance, the concept of carpet area and calculation of it has been defined. It has eliminated the ambiguity of flooring area and faulty measurements due to wall thickness or wardrobe areas. This gives a more clear idea to the buyers about what they are signing up for
RERA provides reassurance to the buyers about the money they have or are about to invest in purchasing a house. It ensures that the money invested will be utilized in the completion of the respective project. According to RERA guidelines, constructors need to have an escrow account and deposit seventy per cent of the amount gathered from buyers in it. The money would, later on, be withdrawn from the account solely for the purchase of raw material of the particular project. The terms of RERA require the builders to keep posting and keep the property buyers in the loop with the updates and status of the construction at fixed and regular intervals. This imbibes the trust and faith in the buyers and builds mutual confidence between the parties involved.
Pradeep Aggarwal, the founder and chairman at Signature Global Group and the chairman ASSOCHAM, National Council on Real Estate, Housing and Urban Development, had remarked on RERA after he closely understood the functioning of the law. He said it was helpful in the establishment of mutual faith among the builders and the buyers. It also brought a sense of order and discipline in the proceedings of the constructors who are now liable to present with on-time reports and updates on the status of property and work being done to the authorities as well as the buyers. He said that in some sense, the certification from RERA to affordable housing projects in Gurgaon gives it more weight and brand recognition.
RERA became a law after the two houses of Parliament passed the Bill. A notice was also handed by the central government. Despite this, it was still at the disposal of the states to set it up. The states took their time in setting up RERA Authorities according to what was viable for them and best suited their needs. Even the relatively slow states in setting it up initially have now paced up and embraced the revolutionizing law.
Prateek Mittal, who is the executive director at the Sushma Group affirmed that buyers of properties were more driven to buy projects that were registered under RERA. They feel more confident about the verdicts and decisions carried on by RERA.
The number of registered complaints and the ones addressed has exponentially grown after the law was imposed. A few states like Uttar Pradesh were slower and behind others in setting up RERA Authority and taking up complaints registered by the buyers. But according to the latest statistics, the state has topped in the number of complaints resolved.
Manoj Gaur who is the CMD at Gaurs Group and VP at North, CREDAI National has stated that he finds the fact that RERA has completed 5 years very heartening. He remarks that the law has finally brought the transparency and accountability that was needed in the real estate sector for the years. He said that dedicated and serious developers like them have profited from the act. But the real win is for the property buyers who will receive on-time updates and quality finish throughout.
Resolving matters at the RERA level has also made sure that lesser cases see the face of the courts. This in turn, also saves a lot of financial repercussions for all the parties involved. RERA has provided and introduced in the system a thoroughly needed transparency and accountability in the industry. This will contribute to making the real estate sector of the country a trillion-dollar industry in the next ten years.