RERA, or the Real Estate Regulatory Act 2017, is without doubt one of the more impactful steps by the Government in the real estate sector. The wide ranging implications and the serious liabilities that the Government proposes have made RERA an important milestone in the Indian real estate sector.
Maharashtra Government established the Maharashtra Real Estate Regulatory Authority (called MahaRERA) on 8th March itself.
Let’s have a look at some of the impact of this Act:
All real estate developers are expected to follow the new compliances such as:
All projects, existing, and new, will have to be registered with MahaRERA (unless the entire project is less than 500 sq mts, and less than 8 apartments/ or when the developer does not intend to conduct any sale/ marketing to the public.
Marketing of real estate projects will not commence until the project is registered, and the registration number is quoted on all marketing and communication material.
All the project details have to be given at the time of the registration, including the start and the end dates. The end date can be modified during registration, if the project is underway.
Builders have to specify the real estate agents authorised to sell the projects.
Strict penalty, including imprisonment on account of non-compliance of any provision under the RERA Act.
Larger projects have to be broken down into smaller phases, and phase-wise escrow account has to have 70% deposits of the customer collection. Only a Chartered Accountant can certify withdrawal from this account, based on the percentage completion of the particular project.
Amenities of each phase will have to be specified at the time of releasing the marketing communication.
The promoter has to give an affidavit for the completion of the project.
Society formation is mandatory upon sale of 51% of the apartments in the project phase.
Any modifications post application to the building plans require the consent of all the allottees in the project.
The promoter/ builders are responsible for the veracity of the information carried on the website at the time of the project registration.
All these regulations are intended for greater accountability on the part of the real estate developers and builders.
But what are the benefits to the Consumers?
RERA is widely regarded as being consumer-centric, and for the protection of consumer rights and interests.
Improved transparency on all the real estate projects, for easier tracking of progress.
Expected to reduce the chances of fraud or cheating.
Speedy resolution of disputes since the Act specifies that complaints have to be disposed off of in less than 60 days.
They can directly approach MahaRERA instead of courts for faster resolutions.
Escrow accounts for the real estate projects will ensure that the funds are utilised effectively.
Timely handover of projects and minimal deviation from the promised project timelines and deliverables.