9amstories RERA

RERA comes into force from May 1st; set to uplift the mood of homebuyers

If you are planning to buy a home, here's a reason to cheer!

For a long time real estate experts and homebuyers are waiting for much-anticipated RERA to get rolling and if one goes by the report, 1st May is the red letter day for Indian real estate industry.

According to experts, implementation of RERA is likely to bring in much-needed transparency in the real estate industry and with all possibility it will protect the interest of the homebuyer by ensuring timely delivery of projects.

Here are a few ways homebuyers are set to benefit by RERA implementation:

  • Real estate sector is highly unregulated in India and offers little opportunity for consumer to complain against a developer in case of serious lapse of contract or other scenarios. Absence of standardization and lack of enough consumer protection has given the real estate industry a negative image. RERA will empower the consumers and they can go to the real estate regulator for any complaint and dissatisfaction.
  • The developer will be responsible for any structural defect in the building for a period of five years. Earlier this period was 2 years. Another shady area was ‘carpet area’ conflict, now under RERA, carpet area has been clearly defined and the developer now can't charge for the super built-up area, as per present practice.
  • As per RERA developers have to deposit 70 per cent of the received amount from the homebuyers in an escrow account so that the fund is not sidetracked from one project to another. There are serious complications and penalties in case of falters.
  • The bill is expected to go a long way to prevent delays in construction and forces the developers to complete projects on time. Its purpose is to ensure that the buyer gets possession on time.

 

 

How it benefits developers:

The developers will also benefit from RERA introduction. Just like the buyers also the developers will have the opportunity to approach the regulator in case there is any issue with the buyer. The organized segment of Indian real estate sector is positive about the bill as this will bring transparency and legitimacy for the brands and eventually this will swell up the foreign investment.

The big question remains if RERA will affect the property price or not. Though property prices are not connected to RERA and prices are not expected to see a correction at current scenario but developers will be in a position to pass additional benefits to customers as margins are expected to increase because of lower cost of construction.

Though RERA is a central law, its implementation will depend at state levels, so a lot will depend on how seriously state governments acts to make this anticipated bill successful.

Authored by 9amstories.com Editorial
 
 

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