Real Estate (Regulation and Development) Act, 2016 (RERA)
Short Notes or Revision Notes
GS-2 Mains
Question : Critically evaluate the role of Real Estate Regulatory Authorities (RERA) in ensuring transparency and protecting the interests of homebuyers in India. Discuss the effectiveness of RERA in regulating the real estate sector since its enactment in 2016.
About
- Enacted in 2016 to protect homebuyers and ensure transparency in the real estate sector.
- Key objectives:
- Transparency in property sales (flats, plots, buildings etc.)
- Speedy dispute resolution mechanism
- Protection of buyer interests
- Building trust between buyers and promoters
Real Estate Regulatory Authorities (RERA)
- Maintain web portals with details of registered real estate projects.
Reasons for RERA
- Introduced to address issues plaguing the real estate sector since 2012, such as:
- Unemployment
- Recession
- Low rental yields
- Inventory pile-up
- Unclear taxes and arbitration
Projects under RERA
- Commercial and residential projects (including plotted development)
- Projects exceeding 500 sq. meters or 8 units
- Ongoing projects without Completion Certificate
Advantages of RERA
- Uniformity in real estate sector:
- Standard definitions for carpet area and common areas
- Clearer agreements with details on layout, area, specifications, etc.
- Timely project delivery:
- Developers face penalties for delays
- Transparency and accountability:
- Completion clearances mandatory before sale
- Separate bank account for each project
- Defect rectification by developer within a year
Disadvantages of RERA
- Exemptions:
- Does not apply to ongoing projects or those facing clearance issues
- Small developers with projects under 500 sq. m. are not covered
- Delays:
- Government approval processes can hinder timely delivery
- Limited reach:
- Small developers escape regulation
Conclusion
- RERA promotes a progressive and customer-friendly real estate sector.
- Effective implementation and policy measures are crucial for sustainable development.
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