It’s been almost a year since the Real Estate Regulatory Act (RERA) was passed by Parliament. Since then the rules being notified by the central government and a few of the states, with a nationwide rollout deadline of 1 May 2017, which is not too far away.
From a prospective buyer’s point of view, the availability of developer and project information on a RERA website will be useful in many ways.
So far, a buyer’s primary source of information about a project was whatever that was revealed by the developer’s marketing campaign or other promotional material that might have been handed over to prospective buyers.
RERA makes it obligatory for a developer to reveal a great deal of information about a project that ranges from land ownership details to sizes based on carpet area to delivery deadlines. This being besides clauses that broadly cover penalties for delays as well as a clear definition of how on-going projects will be listed.
Over the past year lot of end users actively considering buying into these ready to move unsold inventories. On 1 May when RERA gets functional, a question that will be on every buyer’s mind is whether the property they’re planning to buy is covered by RERA or not. The criteria of being listed under RERA might differ from state to state but a RERA listed under-construction project will sell out faster than a one that isn’t.
In fact, in a year’s time or so, projects will be compared for RERA compatibility. RERA roll out to impact new project launches positively. Buyers will have complete clarity about a new project, something that was always ambiguous earlier. With funds marked in an escrow account and project sanction plans and clearances displayed and most importantly delivery schedules mentioned, buyers will feel more confident about investing.
For these first-time buyers, the presence of RERA mandated details in a developer’s brochure or website will work like a stamp of approval from the government.
It’s interesting to note here that states such as Maharashtra, Uttar Pradesh, Gujarat, Karnataka and Delhi, which see regular launches of real estate projects and attract investor interest have been quick to frame RERA rules. It shows their eagerness in regulating the real estate sector which in these states provide jobs as well as generate revenues for the government.
I observed that in countries where real estate is regulated well, buyers take investing decisions much faster and with better clarity. Their decision depends solely on their willingness to invest, and is not based on a determination of a project’s or developer’s credibility, something that is taken care of by a law such as RERA.