RERA And Its Impact On The Real Estate Sector

RERA or The Real Estate Regulatory Act is a pioneering initiative taken by the government to protect the interests of buyers, bring in transparency and make the real estate sector more customer-friendly. It contains various regulatory provisions that came into force from May’2017. As per the act, real estate developers are expected to register their projects that fall under the ambit of this act by July’2017. The real estate fraternity had time and again been demanding the setup of a regulatory authority to enhance the credibility of the sector and its long-term growth. Developers also agree that the RERA was a crucial step required for the longevity and progressive growth of the sector. The bill was therefore introduced with the objective of promoting fair play in real estate transactions and ensuring timely execution of projects.

The provisions of the act aims at restoring the confidence of buyers by actuating accountability and transparency and at the same time instilling more trust among global investors. Some of the provisions will go a long way in creating a positive impact on the sector. We take an overview of RERA impact on real estate industry.

Registration with the Authority: As per RERA, it is mandatory for every project to be registered with the authority by disclosing relevant information concerning the property namely promoters details, sanction plans and approvals, the total number of units mentioning their carpet area etc. This provision will ensure that developers have all the statutory approvals and are accountable for what they commit. Moreover, this will also ensure that they do not have soft launches or advertise till the property is registered with the authority. Additionally, the developer is also required to update their corporate website with all the necessary information including regular progress of the project.

Maintenance of Escrow Account: Under the guidelines of RERA maintaining a separate escrow account with 70% sales funds for every project is obligatory. This will safeguard the capital of consumers, avoid diversion of funds and ensure timely completion of projects without any hindrance.

Disclosure of Carpet Area: RERA mandates the carpet area, which is the actual usable area, to be disclosed while mentioning the size of their apartments. This move will set in more transparency and make clear demarcations between carpet area, built-up area and super built-up area, thereby making it clear to the buyers the area that they will pay for.

Strong Redress System: In addition to the formation of the Real Estate Regulatory Authority that will accumulate relevant data of projects, the Real Estate Appellate Authority will be created as a forum to redress grievances and resolve disputes in a timely manner.

In a nutshell, RERA with its robust policy framework will provide a much-required clarity that will inevitably attract fence sitters and accelerate investments.

Spectrum Metro, an upcoming luxurious commercial development at sector 75, Noida is a RERA compliant project. It offers commercial retail spaces, office spaces, serviced apartments and medifloors all integrated under a single project. Located in the prime industrial area right opposite the upcoming sector 50 metro station, it is the one stop destination for a lucrative investment.