Real Estate (Regulation and Development) Act, 2016
Context
• The Union Ministry of Housing and Urban Affairs is in the process of reviewing the functioning of the
Real Estate (Regulation and Development) Act, 2016.
About
• To protect the interest of homebuyers and to ensure transparency and accountability in the Real
Estate Sector, Parliament enacted the RERA Act.
• The key objectives of the Act are:
• Ensuring Transparency in the real estate sector concerning the sale of flats, apartments, plots, buildings, or
any kind of real estate project.
• Establishing an adjudicating mechanism for speedy dispute redressal.
• Protecting the interest of buyers/allottees in the real estate sector.
• Establishing a bridge of trust between buyers and the promoters, using authority as a medium.
• The Real Estate Regulatory Authorities established under the Act are required to publish and maintain a
web portal, containing relevant details of all real estate projects for which registration has been given, for
public viewing.
• Reasons For Introducing RERA: Since 2012 Indian real estate sector has been facing collapse due to factors
like: Unemployment, Recession, Low rental yield, Inventory pile-up, Unclear taxes and arbitration.
• Projects Under RERA
• Commercial and residential projects including plotted development.
• Projects measuring more than 500 sq. meters or 8 units.
• Projects without Completion Certificate, before the commencement of the Act.
Advantages Of RERA
• RERA has brought uniformity in the real estate sector related to carpet area, common areas which will
prevent malpractices like changes in layout, area, agreement, specifications, details about the broker, architect,
and contractor, etc.
• Developers need to make timely delivery of the booked office spaces or homes. If not strict compensation
and imprisonment can be taken against the developer.
• Completion of clearance from the government departments is compulsory before selling any house or office
space.
• A separate bank account should be opened for each of the projects promoted by a developer.
• The buyer can approach the developer for any defect in the building within a year of the handover and get
it rectified free of charge.
Disadvantages Of RERA
• The rules and regulations do not apply to the ongoing projects or projects that are held up due to some
clearance issues.
• Government agency delay in approval and clearance may hinder the timely delivery of products.
• Small developers with projects less than 500 sq. m. do not come under the purview of this act and registration
with the regulator is not mandatory for these.
• Without clearance, projects cannot be launched and so the launching of new projects may get delayed.
Conclusion
• The RERA is committed to the successful and effective implementation of the real estate law of the country
and has taken relevant and consistent measures for the progressive development of the sector in the country.
• To encourage sustainable development of the RERA, along with a customer-friendly environment, various
policy measures incorporated under the RERA would certainly bring remarkable changes in the economic
and social transformation.