Features of RERA Act
INTRODUCTION
Real estate forms one of the major sectors of the economy, playing a very pivotal role in fulfilling the need for housing and infrastructure of the country. Though it has undergone massive expansion, due to lack of regulation and standardization and proper protection of buyers’ interest, it often had been a cause of problem. There had been an imperative need for robust regulation because this lack of uniformity impeded the healthy growth of the industry. Therefore, the Real Estate (Regulation and Development) Act, 2016, was brought into being to correct these imbalances and provide order to this sector.
SALIENT FEATURES OF THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016
- Establishment of Regulatory Authorities- The RERA has also conceptualized regulating and promoting the real estate sector through the establishment of the Real Estate Regulatory Authority. The said authority shall be responsible for the overview of real estate transactions as a whole, making transactions more transparent and protecting the interest of consumers with respect to it. It works at the state level, that is, every state is required to establish a regulatory body.
- Mandatory Registration- The key feature of RERA is that every real estate project and real estate agent shall have to compulsorily get registered with RERA. Unless a project gets registered with RERA, the promoter shall not be able to sell the project. This requirement sees to it that every project will get documented and monitored properly, thereby reducing frauds and malpractices.
- Public Disclosure- The promoters are required to upload detailed information of projects on the RERA website, such as layout and site plans, status of statutory approvals, details of real estate agents, contractors, architects, and structural engineers. Needless to say, this is a transparent procedure where promoters are liable for projects and buyers take proper decisions.
- Consumer Protection and Dispute Resolution- It seeks to protect consumer interests by a mechanism of robust dispute resolution. It would, interalia, help in constitution of Appellate Tribunals that shall hear and adjudicate on appeals against orders of the Real Estate Regulatory Authority. In that sense, it makes provisions for dispute resolution through a fair and quick process.
- Financial Discipline- To avoid diversion of funds, RERA makes it compulsory for the promoters to maintain money withdrawn from buyers in a separate bank account. This fund is to be used only for the construction of the project for ensuring that buyers’ money is safe. The percentage amount to be deposited into this account is determined by the State Government.
- Promoter Accountability- RERA has imposed various responsibilities on promoters and has, in turn, made them accountable. In case of any major rights and responsibilities of a project being transferred or assigned to a third party, written consent of two-thirds of allottees shall be obtained in addition to obtaining approval from RERA. Moreover, if the buyers have suffered losses on account of defective property titles, promoters are liable to compensate such buyers.
- Equality to All Buyers and Promoters- It ensures complete parity between the buyers and promoters in that both are bound to pay the same amount as compensation, thereby bringing in fairness and accountability.
- Legal Representation- The Act provides a right for legal representation by a CA, CS, CMA, or legal practitioners to the clients. This provision is made to ensure all parties can have access to professional advice and legal representation.
- Penalties and Enforcement- RERA also has provisions for heavy penalties against the promoter and real estate agents upon violations of its provisions. The penalty extends to fine and imprisonment, ensuring that the provisions under this Act are followed strictly.
- Applicability- RERA extends its application over commercial and residential real estate projects. It is also provided that courts cannot entertain any complaints in relation to a matter for which the Act has provisions, thereby making it that the Real Estate Regulatory Authority and the Appellate Authority are ultimately responsible for real estate disputes.
CONCLUSION
The much-needed regulation in the real estate sector, through the Real Estate (Regulation and Development) Act, 2016, has brought about transparency, accountability, and consumer protection. It is in this light that RERA provided for state-level regulatory authorities, mandated registration of projects with public disclosure of details, and surmounted the resultant industry difficulties. The Act has also provided for dispute resolution, financial discipline, and stringent penalties for ensuring the fair and orderly functioning of the sector. Thus, it is equally beneficial to both buyers and promoters. Much in this way, RERA contributes towards the healthy development of the real estate sector while continuing to grow.
