RERA- What is it all about?
From the lens of an ever Optimistic Indian: “In the context of Real Estate, RERA aims to bring transparency and usher in a new breath of life.”
From the lens of a Nonchalant Indian: “In the context of Real Estate, mujhe koi fark nai padhta!”
From the lens of a Cynical Indian: “In the context of Real Estate, Is Desh ke Real Estate me kabhi kuch transparency nai aa sakta. Sab jaisa hai waisa hee chalta rahega!”
Keeping all the views mentioned above, according to The Real Estate Regulation and Development Act, the main objective of RERA is to Promote and Regulate the Real Estate Sector and to ensure sale of plot, apartment or building in an efficient and transparent manner. Its objective is also to protect the interest of consumers in Real Estate and also establish an Appellate Tribunal for speedy dispute redressal.
In short, RERA is to Real Estate as SEBI is to the Equity market and TRAI is to the Telecom Industry.
Is to have smooth and completely transparent transactions and operations in place. And all of this is to bring in the notion of “What you see is what you get” in Real Estate too!
Well now, let us have a look at the basics first:
RERA came into being as part of the Real Estate Regulation and Development Act, 2016. Although the act was passed in March 2016, it was not until April 2017 that the act came into full force. This act is a central act and it mandates all the States and UTs in India to setup one or more than one regulatory body (RERA). It also mandates the various States and UTs to bring into place a fully functional website where Promoters and Agents can register their Projects and themselves.
Along with RERA, the act also mandates the States and UTs to establish a Real Estate Appellate Tribunal Court where Developers, Agents or even Buyers can register complaints and get resolutions in a smooth and timely manner.
RERA- So, why does it matter to us?
In the above lines, we read about the Vision of RERA so, how will it make our lives different? How does it matter to everyone? Let us find out!
RERA is an agent for change. Implementation of RERA in a state mandates all the Builders(Promoters) to get their existing and upcoming projects to be registered, it mandates Agents to be registered as well.
RERA brings along with itself a long list of compliances but at the same time it gives a chance to the Builders(Promoters) and Agents to start afresh and build credibility in the market. It opens up the Real Estate Market wide.
Now, let’s understand this with the help of an example:
Suppose there is Project X which is being built by a Local Builder, and there is Project Y, which is being built by a National Builder (Big brand). Both are RERA registered projects so, a buyer gets the following assurity:
- The project will be delivered within the promised date of delivery.
- The buyers will get a warranty on Structural and workmanship defects for 5 years.
- The approved plans and specifications of the building without any change.
- CC, OC, elaborate Sale Agreement, and a Registered conveyance deed.
Now, let’s try to understand, all of the above conditions will be common for both the Builders, so whom will the buyer ultimately place their money on?
Well, let’s pause for a moment and appreciate the articles, sections, and clauses of the Act, since prior to this Act coming into place, obtaining the above was also an excruciatingly painful process. Many home buyers will testify to this statement first hand. The first 2 points are an instant hit with due respect to the last two.
Coming back to our open question i.e., which project will the buyer place her money on?
Over here, comes the opportunity for the builders to answer the question and become really clever and creative in the process. Up until this point the playing ground is level.
Firstly, the builders need to choose their customers before even starting to plan out the construction of the project. Depending on the customers that they are targeting, one can factor in conditions such as:
- The location of the project.
- Amenities that the project will have.
- Add-ons like a full time facility management team or a fully set up home with beds and kitchens and so on.
- Smart rental plans from the developers’ side and many more.
So, let us summarize how RERA affects each section of the people involved using a table:
|1. Build credibility in the market (especially for new builders)||1. Credibility in the market||1. Assured date of delivery for projects|
|2. Chance to do clean business||2. Chance to make a recognized white collar profession||2. A 5 year warranty on structural defects and workmanship|
|3. Huge opportunity for innovation and creativity||3. Chance to do clean business and huge scope of innovation||3. Approved layout and plans|
|4. JVs and Partnerships with foreign institutions||4. More options from developers|
|5. Strong project planning and funding|
Imagine: What RERA could do for you?
For Builders and Agents, RERA will bring about a chance to come clean. Although RERA fails to implement at this point in time a Single window approval system, but nevertheless, it is a start.
RERA gives the builders a Government Stamp of Approval for all the projects and makes the authority liable too! It also provides the Builders with a Government Portal where they are responsible for maintaining all the Project, Promoter, Agent details and their updates as well.
It gives scope to builders to be innovative, collaborative and follow stringent quality protocols and project timelines. All of this ensures profitability of projects and work to be executed in a smooth and streamlined manner.
For Buyers, RERA is a boon. It allows them to be heard. It truly makes customers the “kings/queens”. Buyers will be benefitted first hand from the assurity and the range of choices RERA will bring about in the Real Estate Industry.
They will truly enjoy innovation, choice of amenities, flexible pricing, big brands and assured quality of services.
Well, to summarize, RERA is a start, although it has some sharp edges, it is definitely a good start. Implementation has been a challenge in many states and maybe termed as slow for various controversial reasons and that is not the point of this article. Builders should be more willing to take RERA in their stride instead of resisting it. It is the same for Agents as well.