One of the most important basic things which we all believe every human being to have is a “roof over his head” i.e. a house where one can live his/her life. The houses we live in fall under the category of real estate hence it’s known that the real estate sector is an important component of an economy and plays a crucial role in meeting the country’s housing and infrastructure needs and demands. The real estate sector is been growing steadily for a few years but due to its largely under-regulated, absence of regularity, and lack of sufficient shielding for the buyer it’s not reaching its desired prospects. The absence of consistency has been hindering the healthy growth of this sector. Therefore, there is an urgent need of regulating this sector.
Chronicle of RERA Act
Before the passing of the real estate act, the real estate sector of India was struggling as there were no efficient laws to govern the same. But that changed when the Indian Government held the 2009 conference of National Housing Development and various municipal corporations discussed affordable housing for all which included land-use policies, and the issue of the land valuation system, also drafted the Real Estate Bill by the “Ministry of Housing and Urban Poverty Alleviation(MOHUA)”. On 14 August 2013, the Real Estate (Regulation and Development) bill was introduced in the Rajya Sabha, and on 10 March 2016 it was passed by the Rajya Sabha, and on 15 March 2016 it also got passed by the Lok Sabha then finally the parliament enacted the Real Estate (Regulation and Development) Act, 2016 which aims to protect the rights and interests of all the stakeholders by reducing the malpractices done by builders and bring uniformity in the housing sector. The RERA Act came into effect on 1 May 2016 and the act was legislated under entry 6 and entry 7 of the concurrent list of the Indian Constitution.
Pre-requisite for the RERA Act
Various needs of the RERA Act are as follows:
- To control and regulate the housing sector by reducing malpractices.
- To provide safety and security to the consumers and keep them out of peril.
- For efficient management of the housing sector.
- To promote the real estate sector for contributing to India’s GDP.
- To create accountability and responsibility for the authorities selected.
- To maintain the quality of services provided by builders to consumers
- Provide punishment to those who violate the framework of Real Estate policies provided by the government.
Crucialness of RERA Act
As we know before the passing of the RERA Act the real estate sector was highly unregulated. To bring transparency and authority over the housing sector there was a need for a law which was finally provided by the RERA Act nowadays. The act clarifies the link between property buyers and builders which serves as a perfect ground for buyers as well as reducing the risk of investors and buyers by giving protection to them and it’s retrospective in nature. The RERA Act is now assisting property buyers and investors in receiving their housing projects on time which is a huge succour for Indian homebuyers.
Salient Features of RERA Act
Some of the salient features of the RERA Act, 2016 are as follows:
- Establish the Real Estate Regulatory Authority for the regulation and promotion of the real estate sector.
- Ensure the sale of plots, apartments, or buildings, as the case may be, or the sale of real estate projects, efficiently and transparently.
- Ensure to protect the interest of consumers in the real estate sector.
- Establish an adjudicating mechanism for speedy dispute redressal and also establish the Appellate Tribunal to hear appeals from the decisions, directions, or orders of the Real Estate Regulatory Authority (RERA).
- Regulates transactions between buyers and promoters of residential real estate projects.
- Establishes state-level regulatory authorities called Real Estate Regulatory Authorities (RERAs).
Current Issues in India Regarding RERA Act
Since the enactment of the RERA Act in 2016 the Indian administration now wants to put tenanted buildings as well as renters which gives these consumers the same protection as other homebuyers. Many Indian cities such as Delhi, and Navi Mumbai have tenanted buildings that contain people who have been living there for ages at low and concessioned costs. According to Magic Bricks, over seventy- four percent of home buyers in India are uninformed of the project under the RERA. They lack relevant information such as remittance procedures, builder registration number, carpet area, etc. Hence creating awareness among the people of India is of utmost importance and a current issue that needs to be solved.
Impact of The RERA Act on the Economy of India
In the year 2016, the government of India brought in three main policies which were “Demonetization”, “The goods and Services Act”, and “The RERA Act”. The RERA Act was implemented just six months after the implementation of demonetization which perniciously affected the real estate market and hampered its growth. Many planned housing projects were either deserted or impeded which also harmed the workers in that sector. Furthermore, clients were not ready to buy properties due to their earnings being pummeled by demonetization and it also harmed the income of real estate builders and investors which negatively impacted the Indian economy as we saw a dip in GDP after demonetization. Hence, Growth became sluggish.
Significant Challenges to The RERA Act
Some of the key challenges are as follows:
- Only fifteen states till now have issued final guidelines regarding the RERA Act which left thirteen states left to issue them. Hence, this challenge creates a disparity in the timelines of the RERA Act’s applicability.
- There is also a lot of confusion among builders and sellers about how to advertise projects to consumers as a lot of barring has been given by the RERA Act.
- There is also some confusion regarding the re-execution of agreements in cases when the deed has already been signed. While some states demand that all such arrangements be re-issued under the RERA, others exempt existing agreements. This mismatch between states is causing a lot of misconceptions among property buyers.
The RERA Act is a great forward move toward enhancing greater clarity and uniformity in the housing sector, surging builder accountability, and raising awareness among consumers, etc. The RERA is committed to the effective and successful execution of India’s real estate law, and it has also embraced measures to promote the sector’s development which in return would be profitable for all the stakeholders. Time-bound endorsements and straightforwardness will likewise prompt a more streamlined approach towards the real estate sector which in turn will reduce the in-cost in a household in addition to remote prompting in the housing sector. Hence, we can conclude that the RERA Act, 2016 acts as a win-win situation for all the stakeholders and is important in the Indian context.
Author(s) Name: Utsav Biswas (Gujarat National Law University, Silvassa)