The Real Estate (Regulation and Development) Act, commonly known as RERA act, was introduced in India in 2016. The act aims to regulate the real estate sector and provide transparency to property buyers. It ensures that builders follow certain standards and timelines while constructing and delivering projects. RERA has made it mandatory for builders to register their projects and disclose all necessary information about the project, including project plans, approvals, agreements, and timelines. This has brought increased transparency to the sector, helping buyers make informed decisions.
Increased Transparency: RERA ensures that all real estate projects are registered and their details are available on the RERA website. This includes project plans, approvals, agreements, and timelines. Buyers can access this information and make informed decisions.
In this article, we will discuss the top 10 benefits of the RERA Act for property buyers.
1. Timely Completion
RERA mandates that builders complete projects within the given timelines. This helps in avoiding delays and ensures that buyers receive their homes on time. According to a report by JLL India, the implementation of RERA has led to a 50% increase in project completion timelines in the top seven cities of India. The report also highlights that the act has resulted in a reduction in project delays and legal disputes, leading to reduced project costs.
2. Standardized Carpet Area
RERA has also brought standardization to the real estate sector. The act mandates that builders sell properties based on the carpet area, which is the actual usable area of a property. This has eliminated confusion and helps buyers compare properties easily. The act also mandates that builders use standard agreement formats for sale agreements, lease agreements, and other contracts. This has helped in preventing unfair terms and conditions in agreements.
3. Protection of Buyers’ Interests
RERA requires builders to maintain a separate escrow account for each project. This ensures that the money collected from buyers is used only for that project and cannot be diverted elsewhere.
4. No More False Promises
RERA prohibits builders from advertising or selling properties before getting all necessary approvals. This helps in preventing builders from making false promises and cheating buyers.The act has also provided for a state-level Real Estate Regulatory Authority and a Real Estate Appellate Tribunal to hear and resolve disputes between buyers and builders. This has helped in protecting buyers’ interests and providing a mechanism for dispute resolution.
5. Clear Project Details
RERA mandates that builders provide clear details of the project, including the land title, layout plans, and approvals. This helps buyers avoid investing in projects with legal issues.
6. Standardized Agreements
RERA mandates that builders use standard agreement formats for sale agreements, lease agreements, and other contracts. This helps in preventing unfair terms and conditions in agreements.
7. Redressal Mechanisms
RERA provides for a state-level Real Estate Regulatory Authority and a Real Estate Appellate Tribunal to hear and resolve disputes between buyers and builders.
8. Reduced Cost
RERA has reduced the costs of real estate projects as it ensures that the builders complete the project on time and with all necessary approvals. This has eliminated unnecessary delays and legal hassles, resulting in reduced costs.
9. Improved Quality of Construction
RERA mandates that builders follow certain quality standards while constructing buildings. This has led to an improvement in the quality of construction and reduced the chances of accidents.
According to data from the Ministry of Housing and Urban Affairs, as of August 2021, a total of 65,539 projects have been registered under RERA, and 57,669 projects have been completed. The data also shows that 87,568 complaints have been registered, out of which 85,458 have been disposed of, indicating the effectiveness of the dispute resolution mechanism provided by the act.
Overall, RERA act has been a game-changer for the real estate industry in India.
The act has brought transparency, standardization, and accountability to the sector, resulting in increased trust between buyers and builders. The implementation of RERA has resulted in a reduction in project delays and legal disputes, leading to reduced project costs. With the benefits it brings, RERA has become an essential tool for property buyers in India.
- Ministry of Housing and Urban Affairs. (2021). RERA – Real Estate (Regulation and Development) Act, 2016. Retrieved from https://rera.gov.in/
- JLL India. (2019). RERA: The Game Changer for Indian Real Estate. https://www.jll.co.in/content/dam/jll-com/documents/pdf/research/asia-pacific/india/jll-rera-report-2019.pdf
- Real Estate (Regulation and Development) Act, 2016. (n.d.). https://rera.gov.in/about-rera.html
- Khanna, R. (2019, November 6). How RERA has transformed Indian real estate. Livemint.https://www.livemint.com/money/personal-finance/how-rera-has-transformed-indian-real-estate-11573046150514.html
- Pandey, S. (2019, December 10). RERA Act and its impact on real estate sector. Moneycontrol. https://www.moneycontrol.com/news/business/personal-finance/rera-act-and-its-impact-on-real-estate-sector-4700171.html
- PwC India. (2019). RERA – A game changer for Indian real estate. Retrieved from https://www.pwc.in/assets/pdfs/publications/2019/rera-a-game-changer-for-indian-real-estate.pdf