What is RERA and how it will impact on the real estate industry and home buyers?
Why we go for a real estate project registered with RERA?
The Real Estate (Regulation and Development) Act of 2016, intends to ensure the interest of home buyers.
While every one its arrangements became effective , from May 1, 2017, Developers had been given until the end of July 2017 to register their Venture under Maha RERA. Post registration, citizens will be able to view, on Maha RERA site, all disclosures pertaining to registered Venture. This shall enable data driven informed decision making.
How will RERA impact home buyers?
Registration with RERA will be mandatory before beginning the sales and marketing of any Venture. Increased assertion on the timely completion of venture and delivery to the consumer.
An increase in the quality of Development due to a defect liability period of five years.
Home buyers will have more insight into the venture that they are considering to associate with us.
The most positive aspect of this Act is that it provides a unified legal regime for the purchase of plots
Impact of RERA on real estate industry
One of RERA’s important regulations is that all proposed projects exceeding an area of 500 square metres. – It is required for mandatory for the builders to deposit 70% of the venture money collected from homebuyers like you in bank accounts through
cheques. This means builders can no longer in money laundering or in fraudulent transactions. From now on every rupee gained and every rupee spent has to be accounted for. – Builders have to update the status of their Venture development
at every stage on the RERA website. This allows homebuyers to keep track of the progress of the Venture. – There will be one model sale agreement between all homebuyers and builders to prevent from fraudulent or harmful terms.
· Initial backlog
· Increased project cost
· Tight liquidity
· Rise in cost of capital
Which projects come under RERA?
Commercial and residential projects including plotted development Venture measuring more than 500 sq mts or 8 units Venture without Building Completion Certificate or Occupation Certificate (OC), before commencement of the Act The venture which only for the purpose of repair/ redevelopment / renovation / which do not involve re-allotment and advertising, selling ,marketing or new allotment of any apartments, building or plots in that , will not come under RERA
How can a builder be RERA COMPLIANT?
· Project registration
· Withdrawal – POC Technique
· Website updation/ disclosures
· venture accounts – audit and
70% of the assets collected from allottes needs to be deposited in the Venture account. Withdrawals cover construction and land cost. Withdrawals to be in proportion to the % of completion method. Withdrawal to be certified by an CA, Engineer and architect. Provision for RERA to freeze Venture bank accounts upon non-compliance. Interest on delay will be same for promoter and customer
Market situation after one year of RERA
There have been fewer Venture launches and the focus has been on execution of on-going projects
Developers have to adhere to compliances, or to face strict penalties
All stakeholders can have single point access to all important information about a registered project on MAHA RERA website.
Hence, we can say that RERA is a step towards transforming the real-estate in India encouraging greater transparency, citizen centricity, accountability and financial discipline.