The launch of RERA Act and How it Impacted the Real Estate Sector

Real estate frauds are nothing new in India. The internet is full of multi-crore real-estate property scams, land scams etc. To name some of the biggest property scams in India, there is Karnataka Wakf Board Land Scam and then there is the Noida land scam. This was emerging as a big problem, affecting the common people at large. Thus, there was a need for a regulatory body which could curb the problem and make real-estate investment safer.

After a long wait, the RERA establishment bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016.

What is RERA Act?

“This Act establishes Real Estate Regulatory Authority (RERA) in each state for regulation of the Indian real estate sector and also acts as an adjudicating body for speedy dispute redressal.” (Source: Wikipedia)

How did RERA impact the real-estate sector?

The main focus of the RERA Act was to regulate the expansive real-estate sector by implementing policies to curb malpractices and bring transparency. Some of the major challenges the RERA tackled are:-

• The RA issued guidelines which would restrict builders who were delaying the possession of the property to the buyer. 
• Malpractices such as demanding additional charges, reducing carpet area, changing the society plans etc. have been taken care of. Plus, RERA made registration of the real-estate brokers or agents mandatory. Now, the cost of registration varies from one state to another. 
• The RERA act reinforces the timely completion of projects. The act clearly states the developer must specify a time for project completion during registration.
• The RA also made it mandatory for the developers to bear the cost of structural defects up to five years. 

With more and more home seekers eyeing affordable housing, major lenders such as NBFCs like Bajaj Housing Finance offer high-value loans amount up to Rs. 3.5 crores at an affordable interest rate and flexible tenure of 240 months with minimum paperwork.

Bottom line: There are many other ways in which the RERA Act has impacted the real-estate sector. But, to understand the impact completely, you should get your hands on some additional support material, especially in case you are looking to buy a property.

Additional Read:-

Impact of RERA – The Real Estate (Regulation and Development) Act