The most awaited act for Real Estate has come into force from the 1st of May. Currently, only 13 states and Union Territories have been notified about the same. Nevertheless, there has been a lot of confusion about the implementation and its impact on home buyers. Different states have different impacts of RERA, In Gujarat, the projects launched after 1st Nov 2016 will come under the RERA law and in Haryana, the law excludes all real estate projects for which the builders have applied for the part completion certificates and the same is granted within three months of the application. Since real estate is a state subject, the implementation of the Central Law will be based upon the States. The impact of RERA on buyers and sellers has been discussed below:
If a builder does not meet the delivery guidelines of the existing as well as the proposed project, there will be fines and penalties for the same. This Act ensures that the buyer can secure the interest as a penalty from the builder at a prescribed rate and this rate could vary from state to state. If the builder uses the fund for other activities, the buyer can file a criminal case against the builder.
For new buyers
RERA will benefit new buyers in many different ways. Builders are required to deposit 70% of the collected amount in an escrow account so as to ensure that the money is not utilized for another project. The builders will be allowed to sell the projects only after they receive the clearances from the authority. Under RERA, builders as well as agents will be required to register themselves with the regulatory authority and get the projects which consist of more than eight apartments, to be registered before the launch. There will be a uniform definition of the carpet area and the builders will not be able to change the design of the project without the consent of the buyer.
The prices of the property are based on the demand and supply in the market. Post demonetization, there has been a huge unsold inventory in the market due to which the real estate prices are going to remain low. The implementation of RERA will not lead to a rise in the prices immediately. But those individuals who have postponed their purchase due to the lack of trust on the builders and the soaring prices, can now make their purchase with the essential transparency.
RERA will help the customers gain back the trust in the real estate market and it is advisable for all the buyers to check the RERA laws applicable in their respective state before planning to invest in real estate. It is expected that the real estate prices will pick up after a couple of months, but it is important for the builders to clear their unsold inventory before any new projects are launched in the market. RERA is expected to bring a positive change in the real estate market of India.