How RERA helps in transforming the Real Estate Market of India?
The RERA Act was implemented in India on May 1, 2017. It is being recognized for its power to transforming the Real Estate market of India in different terms such as efficiency, quality, and transparency. RERA Act holds the promise of revolutionizing the sector and helping revive the country. The primary idea of RERA was to offer extra protection to customers by safeguarding their interest and ensuring that the delivery of the current or ongoing construction is a comparatively seamless process. That’s why customers are thrilled as they can now resolve their difference and arguments with the developers within the specified time of 60 to 90 days. It also allows the customers to see all updates on the property in a single platform. RERA helps build a strong trust between the developers and buyers is debatably the most important achievement of this Act. Scroll down to check more information regarding the importance of RERA in transforming the Real Estate Market of India.
What are the different ways RERA will positively impact the Real Estate Sector?
Following are some of the ways RERA will positively impact the Real Estate Sector, and it will also help in transforming the real estate market of India:
- Real Estate Projects will be completed on time: Before RERA, there is always a delay in the completion of real estate projects, and it was almost the norm. After the RERA Act, all the builders must get RERA Registration and builders are required to complete all the real estate projects on time. If in case of any delay in real estate project completion, customers must be sufficiently compensated.
- Minimum standard of quality will be confirmed: When it comes to the construction quality, then RERA calls for a minimum standard to meet, and there will be no compromises on safety and quality of construction.
- Builders will be held more responsible: After the RERA Registration, a builder is required to be completely transparent in terms of where the consumers’ money is being used & spend and about the better details regarding construction.
- Real Estate Projects registered under RERA: Every Real Estate Projects must get RERA Registration of the respective state, thereby making it more reliable, authentic, and trustworthy.
- Customer Grievance will be given priority: Customer grievances will be rectified promptly and in an efficient manner.
RERA Impact on Real Estate Agents: Transforming the Real Estate Market of India
As per the RERA Act, real estate agents must apply for RERA Registration, to be able to facilitate a transaction. The broker segment in India is projected to be a four billion US Dollars industry, with an estimated 5 lakh to 9 lakh brokers. However, it has traditionally been unregulated and unorganized. It will help to bring a lot of responsibility in the industry and one who believes in transparent and professional business will avail all the benefits of RERA Registration in India. Currently, real estate agents will have a hugely responsible role to perform. They will have to reveal all the appropriate information to the customer and even help them choose a complaint developer. With the RERA in power, brokers cannot promise any facilities or services that are not revealed in the documents. They will also have to provide all the essential documents and information to the home buyers at booking time. Therefore, the Real Estate (Regulation and Development) Act, is likely to clean out the unprofessional, unskilled, inexperienced, brokers not following the guidelines will face heavy penalties or jail or maybe both.
Impact of RERA on Insurance Cost and Land Title
After the introduction of RERA it not only transforming the Real Estate Market of India but also impact on insurance cost and land title:
- Land and approval costs to be hand out of internal growths as a prelaunch concept may end. It may also lead to a shift in equity financing from debt financing prevailing presently. The capital cost may go high as developers may at present have to fund the land and approval cost through equity.
- With the regular delay in approvals, debt funding may not be a perfect way for developers. With the entry in the sector, it made difficultly, and the sector may witness association.
- Robust execution and financial capability are required to launch a new project. The development agreement or model may increase reputation.
- The time for project launch may increase because most of the time will be involved in finalizing better-quality details before launching a project.
- Details like utility layout, complete drawings, etc. must require to be finalized before the project starts.
How has RERA Increased Transparency for Buyers?
Before implementing RERA, the customer complaints were addressed in the court, for which buyers are not capable of sustenance for long-drawn cases. RERA has improved life for them. But, this is just a single part of the RERA benefit. People don’t buy houses to fight cases. Homes are for living and typically bought once in a lifetime with the lifetime savings. Such purchase needs greater inspection and protection. The highest protection for demand-side comes in the form of greater transparency and assurance on the suitable deployment of funds by builders. Equally, alternation to assured designs or layouts is not possible any longer, at least under normal conditions. Real Estate (Regulation and Development) Act always seek to create information symmetry, and as it is implemented all over India, we should have a market which is open to the examiner and is transparent.
It has been robustly argued on various platforms whether these changes which RERA happened to be in the first link in the chain that has been valuing the pain. But, it is evident that RERA is need of the hour and is here to stay. Since four years, RERA was implemented, have been turbulent, arguably making it bigger than it is. There is small doubt that it has transformed an industry that was often misty at best or infamously unaware to customer interests at worst.
The RERA implementation has significantly played a massive role in formalizing the sector and boosting consumer confidence in India. Before the RERA era, the sector was highly fragmented and unregulated, but now it helps in transforming the real estate market of India to a great extent.