RERA came into effect from the 1st of May, 2017. The reason that the Real Estate Act is trending for a long time now is because it promises to make customers the true kings when it comes to buying property. The Real Estate Act has been designed to ensure greater transparency and accountability in the realty sector and according to Venkaiah Naidu, the Union Minister for Urban Development, Housing & Urban Poverty Alleviation, this will make home buyers the real kings.
All the states and Union Territories are required to notify the rules and the Real Estate (Regulation and Development) Bill or RERA was passed in March 2016 and this encourages genuine private players in the realty sectors while protecting the interests of home buyers. Naidu has already stated that the Act clearly defines the rights and duties of developers/promoters and also lays down buyer rights clearly. Under RERA, there is the provision of mandatory property registration and 70% of the project money has to be kept by developers in an escrow account which will reduce buyer risks to a large extent. This will also ensure that developers will be unable to invest money across multiple new projects with booking money from one project, thereby delaying project completion and handover to their customers.
The promoter is liable to provide a clear title while there are clearly defined penalty clauses for developers under the Act. Real estate agents and brokers have also been covered under the purview of the Act.
RERA is expected to shake up the real estate industry and bring in greater accountability while ensuring an environment where only genuine and authentic developers and companies thrive on the basis of the trust and respect that they get from customers with proper checks and balances at every step. RERA makes home buying safer but its final and effective implementation depends on the states.