Real Estate Regulatory Authority : RERA ACT
Real estate is a burning sector in India as it fulfills the land needs of all the citizens and non citizens, commercial or domestic, companies or organizations either government or private. Because of such significant role there is a huge capital involved in the real estate sector by the various stakeholders. Apart from fulfilling the land needs it is also one of the major sector for the investment made by various business companies and individuals.
Earlier before RERA was introduces there were a lot of complication which came across regarding the transactions, bankruptcy of builders and involvement of huge amount of black money in the market so the bill of Parliament of India Act was passed on 10 March 2016 by the Upper House (Rajya Sabha). The RERA Act was effective on and from 1 May 2016. The Act is included in concurrent list so that both center and state can act accordingly hands in hands for the betterment of the real estate sector.
The main purpose of RERA is to make the real estate transactions smooth and flawless and provide transparency to the customers; also the risk is reduced to a higher extent from the buyer as it puts certain liabilities and duties to the promoters and agents of the project. It is clearly said in the act that any project of real estate with proposed land to be developed is more than 500 meter square must get itself registered under the RERA act and only 30% of the money obtained by the promoters and agents received by the buyers could be set free remaining 70 % should be deposited in a special account termed as ‘escrow account’ which shall be used for the same project by the developers so that in future there is no lacunae of delaying in completion of project or delivery of possession due to bankruptcy of the promoters.
The act also state that if there is any sort of malpractice by the developers or the agents there are penal provisions which make act the punishing one thus creating a sense of honesty in mind of developers and on the other hand the customers or investors feel much secure making a win- win situation for the customers. Real Estate Appellate Tribunal are also established to upheld the act and in case of any discrepancy the tribunal should decide the matter in 60 days and one can always appeal in higher courts for the sake of justice.
RERA has affected the Indian economy in a significant manner, due to implementation of the act, struggle of small builders has somehow increased and also the huge set of responsibilities and liabilities on promoters and developers, the price of the market has hiked up to 40-50%. Many projects gets delayed as both center and state have their paperwork formalities and they cannot advertise or continue the projects before registering into the act and thus many workers are abandoned.
Though the act has both some positive and adverse impact, the government legislature should make some reasonable amendments in the act after a deep discussion with the stakeholders as well as developers.
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