RERA: Catalyzing Growth and Accountability in India’s Real Estate Industry
New Delhi, 12 May 2023: The Real Estate (Regulation and Development) Act, 2016 (RERA) was a landmark legislation that aimed to regulate the Indian real estate industry and protect the interests of homebuyers. The Act has been in force for over four years now and has made a significant impact on the industry. With RERA’s robust mechanism, the industry has scaled up, and the trust of consumers has been restored.
Union Housing Minister Hardeep Singh Puri recently highlighted the importance of discouraging consumers from resorting to “forum shopping.” This practice of approaching multiple forums for grievance redressal can lead to confusion and delays in resolving disputes. RERA’s robust framework and established mechanism have made it the primary avenue for redressal, reducing the need for consumers to seek alternative forums.
Prior to the enactment of RERA, the real estate industry was plagued with issues such as project delays, diversion of funds, and lack of transparency. Homebuyers were left at the mercy of unscrupulous developers who failed to deliver on their promises. The situation was dire, and there was a need for a regulator who could provide a level playing field for both developers and buyers.
RERA’s introduction brought a significant change in the industry. The Act mandates that developers register their projects with the regulator, which requires them to disclose all details related to the project, including the timeline for completion, project layout, and the progress of construction.
NAREDCO President, Mr. Rajan Bandelkar* shared “We welcome the Housing Minister’s call to disincentivize forum shopping by property consumers and believe that it will help streamline the dispute resolution process and reduce the burden on the legal system. We would like to emphasize that the Real Estate Regulatory Authority (RERA) has played a pivotal role in ensuring transparency and accountability within the real estate sector. Since its introduction, RERA has significantly contributed to the reduction of disputes and grievances among property consumers. The mandatory provision of maintaining 70% of escrow accounts has instilled confidence and trust in buyers, leading to a decline in legacy cases. The establishment of a robust mechanism by RERA has undoubtedly been instrumental in maintaining the equilibrium between developers and consumers. By bolstering RERA’s effectiveness, we can continue to build a thriving real estate industry that contributes significantly to India’s GDP, with a projected 20% contribution by 2023.”
The progress witnessed in the real estate industry after the introduction of RERA is commendable, especially considering the challenges faced during the COVID-19 pandemic.
Mr Ankur Gupta, JMD, Ashiana Housing said “The appreciation of the Real Estate Regulatory Authority (RERA) by the Union Minister is a testament to the effectiveness of this regulatory body in ensuring transparency, fairness and accountability in the real estate sector. It is a crucial step towards building trust between consumers and developers, and fostering a culture of ethical business practices in the industry. The idea by Mr. Hardeep Singh Puri is brilliant, actually we should solve problems quicker and get all the problems in a singular area to solve. I hope more and more clients go to there and solve the problem”
Mr. Saransh Trehan, Managing Director, Trehan Group added, “The RERA Act has helped to increase the credibility of real estate builders and also channelise the process of transparency and authenticity related to property information and thereby, ensure property buyers’ rights. Before the RERA enactment, the real estate sector was to some extent, plagued by fraudulent practices and treachery which also kept many potential homebuyers and investors away from the real estate markets because of unallayed fears. The RERA Act has been a game-changing policy that has transformed the real estate sector operations and made it much more organized, synchronized, and simpler, bolstering homebuyers’ trust and their incentives to invest in different property types.”