Good times for home buyers as RERA comes into force from May 1
Homebuyers across the country are waiting for May 1, 2017 as this is the day when Real Estate (Regulation & Development) Act (RERA) will be implemented. Implementation of RERA is likely to bring in transparency and reinforce consumer’s trust in the sector. It is seen as an act that will safeguard the interest of the homebuyer along with timely and quality construction. The real estate developers are also gearing up to follow the rules and regulations of the RERA Act and working towards project completion certificate.
“Buyers will get complete protection for their interests and will be able to invest with more confidence. They will be assured that developers have to adhere to the promised completion timelines, overall legality, amenities and quality standards of the projects they buy into,” Ashwinder Raj Singh, CEO – residential services, JLL India said while elaborating on how it will benefit the homebuyers.
One of the most prominent feature of RERA is that it makes mandatory for a state to establish a State Real Estate Regulator Authority. This regulator will govern both residential and commercial real estate transactions, thus improving the governance hold on the real estate sector reducing disputes and making the system more transparent. Another rule that homebuyers cheer is the eschrow account provision. RERA’s rule of depositing around seventy percent of funds in a dedicated account will ensure sufficient funds for the projects to speed up, get completed and timely delivery to buyers bringing in more transparency.
RERA Act will also ensure that the home buyers are adequately protected and that promoters and developers abide by the rules and regulations. It will also try to protect the interest of consumers ensuring speedy redressal of disputes which will help gain confidence amongst the buyers. “One of the major benefits for homebuyers due to RERA Act is that if the project completion is delayed, the developer have to pay the same interest as the EMI paid by the buyers. This will enable the government to oblige the developer to stay loyal to their customers, ” Amit Modi, Director, ABA Corp and Vice President CREDAI Western UP said.
RERA as a policy measure has the potential to revive the sector. As the deadline for RERA approaches, developers are trying to focus on completing their existing projects rather than launching new ones, which is a good sign for the sector and homebuyers.
With RERA, there would be mandatory disclosure of project details, including those of the promoter, project, land status and clearances. This would increase the credibility of developers and would protect consumer rights as well. Home buyers confidence is now set to increase on the back of these sentiment-building measures of the government.
“RERA is a long-term policy measure whose effect will be pretty permanent, in the sense that it will drive unscrupulous or unorganised developers off the market and leave a level playing field for credible players in its wake. Hence, we are hoping to see positive impact in the second half of 2017 itself after RERA comes into full effect,” Modi added.
According to JLL’s Ashwinder Raj Singh, the period after the nation-wide implementation of RERA will be ideal for any fresh investments into residential real estate. Even before that, it is a good idea to invest in properties by sound, reputable developers. Compliance-related price escalations are to be expected once RERA is implemented across the country, so the current time may be the best to buy as long as one picks one’s builder and project wisely, and negotiates a good deal.
“Presently ‘Affordable Housing’ is a good area to invest which buyers and developers are interested in as its demand is ever increasing due to its affordability which is becoming within the reach of the buyers and the developers can also reap good results by giving its supply and also it is in consonance with the government’s mission of providing ‘Housing for All by 2022’, ” NAREDCO’s Parveen Jain added.