One of the major decisions taken by the Maharashtra government to bring accountability into real estate is giving the green signal for implementation of RERA. Suraj Uchil explains the minute details of the act
2016 has been a mega year for the real estate market. A lot of policies have changed hands and the government is trying to bring in greater stability into the sector. The RERA or the Real Estate Regulating Authority Act is being considered as a major step in bringing about an overhaul in real estate. So, as we come close to the time frame of the act being implemented, let’s try and understand what the act does, how it will be a blessing for potential customers and also how it will affect the real estate market in general.
What Is RERA?
RERA is an initiative by the government to bring about a transparency in the otherwise pretty rigid and opaque system present in real estate. When a common man goes to buy a house or contacts a certain developer, he is given a lot of assurances by the developer. The developer will try his best to sell the property and will leave no stone unturned to make the whole sale look like a glam. But most of the times, the truth is far from what is being said. There are always a lot of complaints from the customers of the developer not fulfilling his promises or failing to complete the projects on time. One of the other major problems that buyers face is that the builder uses their money for a certain project to start an altogether different project, leaving both the project and the customer in a lurch.
RERA or the Real Estate Regulating Authority will try to curb this menace in the real estate sector. In RERA, the developers will have to submit all the required details about their project on the RERA website within 90 days from the implementation of the act. This will include all the required certificates, permissions, land cost, construction related costs, build up of the building right from built up area to carpet area. Each and every detail associated with the projects will be up on the website for the general public to see. This move will bring about a great deal of transparency, which the real estate market lacks right now. The developer will also have to mention the time required for the completion of the project. This will not only help make the developers more accountable, but also help increase the faith of the buyers in the developers and the project itself.
Another interesting part of RERA would be the setting up of the escrow account. According to the Act, the developers would be required to put 70% of the money given by the buyer into the escrow account. The money in the account can only be used for the construction of the given project. This means that a developer cannot use the money given by a buyer from one project to start work on a new project. He will have to use it for the construction work of the project for which the payment is made for. This is a very encouraging move which will help to get the project work done on time as the resources won’t be utilised somewhere else.
Also, the act will require the developer to make an application to form the co-operative society or any required legal body within two months of obtaining the receipt of the occupation certificate (OC). This move clearly puts the interests of the customers first. Similarly, another provision of the draft says that under the act, there will be a model agreement of Sale that will have to be followed by everyone, which means that the developers can’t put up a clause of his own choice and making and hence can’t dictate the terms of the sale.
A win-win situation
The act will only bring about more stability and transparency in the market and thereby increase the trust of the people in it. And, once the trust is there, the market can only go upwards. It is also a win-win situation for the developers as all the people in the real estate market looking to misuse the market for their personal gains will now be eradicated from the market. The implementation of RERA will cleanse the market and only the honest and legitimate developers will find space there. Hence the developers are also welcoming this act with open arms.
RERA will be a success if both the customers and the developers adhere to its rules and regulations. While the law will dish out severe punishment for developers failing to follow the rules, the customer will also be able to get their total satisfaction when it comes to buying their dream house.