RERA –A Framework for Possibilities and Opportunities
The Real Estate market in India has traditionally been dogged by old reforms, opaque practices and cluttered regulatory framework. The absence of standardization and poor consumer protection measures has constrained the growth of the industry and fueled mistrust between customers and developers.
However, with the introduction of the Real Estate Regulation and Development Act 2016 (RERA), a new dawn sets upon the industry. RERA is expected to set in motion key reforms that will bring greater clarity and fair practices in order to protect home buyers interests. The Act proposes a level playing field and offers much needed confidence to investors and home buyers to revive their interest in the sector and help them make informed decisions.
The industry is the second largest employer in the country with a Compound Annual Growth Rate (CAGR) of 11.2 per cent with the market expected to touch US$ 180 billion by 2020. To achieve this phenomenal growth, RERA will play an instrumental role as it will outline how the industry will operate. It will impose checks on prominent issues such as project delays, unfair price escalations, quality of construction and others. With mandatory disclosure about project details, land status and clearances, the buyers will have a clear view and would be in a stronger position to make sound investment decisions.
The new bill seeks to balance out the interest of all stakeholders and delegates further responsibility on developers to meet their commitments on upcoming projects completion to avoid stringent regulations. From a developer standpoint, implementation of RERA will help modernize the sector and ensure better project planning, implementation and management, thereby making the entire exercise more efficient. Such structural reforms will also prompt greater Foreign Domestic Investments (FDI) into the sector encouraging developers to adoption best practice and quality standards to project Indian real estate sector in a new light.
All in all, RERA is a win-win move by the government that sets the tone to ensure that major stakeholders work in an organized manner which will lead towards a more trustworthy and positive image of the real estate market.