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The eagerly awaited regulator of the real estate industry, Real Estate (Regulation & Development) Act 2016 (RERA), shall be rolled out from today i.e. 1st May 2017 onwards, across the country. The Indian property market had been facing a dampened growth due to the poor construction quality and undue delays in the project completions. But, with the implementation of RERA, some major changes, for the benefits of the Home Buyers are expected to take place in the way the realty transactions are being done. It shall act as an important key to the future growth of the Indian realty sector.
This Act shall be applicable on all the developments that are still under-construction and haven’t obtained their completion certificates till May 1. There shall be strict rules for the developers to complete all such projects as early as possible. Though the implementation of RERA is compulsory in all the states, there are some places like Madhya Pradesh, Gujarat, Orissa and Uttar Pradesh that have only finalized their rules and regulations as of now. Places like Maharashtra, Rajasthan, Tamil Nadu, Karnataka and West Bengal have also drafted a set of rules for the same.
According to the Act, every state will have to establish a State Real Estate Regulator Authority who will inform the various norms to be followed for both commercial and residential property transactions, within the state. The regulator shall be the government body authority to which the any problems and grievances can be addressed for solutions.
Not just the developers, but even the property brokerage houses shall be covered under the scope of RERA. Property brokerage houses refer to the agencies operating in smaller areas that impose their low quality constructions on to their clients. Any agent or broker found not abiding with the rules set by the regulator shall be guilty of punishment. Brokers minting money in ignorance or not realizing the faith of the clients shall be weeded out from the system. All such agents and agencies will have to get themselves registered with the regulator so that they declare their accountability for all their business practices.
How Will RERA Benefit Home Buyers?
For all those who are planning for Investments in 2017 should wait for the complete roll out of this Act. In order to improve the things and make them better, RERA comes with a plethora of buyers benefits.
1. As per the provisions of the Real Estate (Regulation & Development) Act 2017 (RERA) all developers and promoters shall come under the jurisdiction of the State real estate regulatory authority that will protect the interest and concerns of the prospective buyers. The developers who have not yet completed their buildings and obtained the completion certificates will have to abide by the norms set by RERA and hence are speeding up their work in order to avoid the same.
2. In order to encourage Investments in New Property in India, it is also working for the speedy redressal of builder-buyer disputes. This will ensure that the buyers get full justice to all his problems and complaints and at a faster pace.
3. In order to increase transparency in the system, leaving no room for any sort of ambiguities, RERA makes it compulsory for the developers to disclose the details of the projects, status of various approvals and clearances needed like land clearance etc. to the purchaser along with any other information asked for.
4. It also makes it compulsory for the builder to set up an escrow account where they shall deposit 70% of the funds required for the construction of a project. This is done in order to make sure that the money is not used for any other project and so that the developer doesn’t face any cash crunch and helps in timely completion and delivery of the projects. The money shall be withdrawn from time to time as required and in agreement with the chartered accountants and engineers of the project.
5. With the implementation of RERA the prices of various projects are expected to come down and will also bring down the ambiguous sum of money put into projects and charged from the customers.
Since the Indian Government makes it very clear that RERA shall be applicable to under-construction and new projects, the kicking in of this Act shall be very beneficial for customers as it will help in checking unscrupulous practices on the part of real estate developers and brokers.
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