The Real Estate Regulatory Act, which was implemented across India on May 1, will not only make the sector transparent, but also protect the interest of the consumers
The Real Estate (Regulation and Development) Act has been a landmark as far as the rights of home-buyers are concerned. The Act has provided a shield to the buyers in the wake of delayed delivery of projects. Now, home-buyers can be assured that a RERA-registered project will be a safer bet and their hard-earned money too isn’t getting misused.
Vamshi K K Nakirekanti, executive director and head, valuation and advisory services, CBRE South Asia, is of the view that RERA has been created to ensure accountability towards the buyer and developers, protect consumers’ interests, ensure fair play and reduce frauds and delays. “The objective of this law is to instill transparency in the sector, which is needed for the overall improvement in investors’ confidence. RERA is likely to drive buyer confidence as buyers are expected to feel more in control of any changes in their project. With RERA being implemented across the states, developers are likely to focus on the timely delivery of their ongoing projects and also remain increasingly flexible on payment structures,“ Nakirekanti maintains.
Amit Modi, director, ABA Corp and vice-president, CREDAI Western UP, adds, “Before RERA came into action, home-buyers were unsure while investing in a project. Also, there was no redressal mechanism for either delay in obtaining occupancy certificates or possession of the project. RERA has taken care of these issues and infused a lot of transparency in the system.“
The provision of mandatory registration and requirement of keeping 70 per cent of the project money into an escrow account is likely to reduce the buyer risk to a certain extent; this will ensure that developers are not able to invest in numerous new projects with the proceeds of the booking money for one project, thus delaying completion and handover to consumers.
The provisions of the promoter’s lia bility for clear title, inclusion of real estate agent under the purview of Act and penalty clauses will increase the overall transparency and accountability in the system. Also, one of the major benefits for home-buyers from RERA-registered projects is that if the project completion is delayed, the developer is compelled to pay the same interest as the EMI paid by the buyers.
Source : The Times of Group (Bangalore)