RERA has introduced accountability to the real estate sector but loopholes remain, writes Tata Housing GC Parveen Mahtani
The Real Estate (Regulation and Development) Act, 2016 (RERA), was implemented two years ago. Its effective implementation has helped build tremendous confidence among homebuyers and investors. So far, 22 states and six union territories have notified RERA.
RERA has had an impact on all aspects of real estate development, from the inception of the project to dispute resolution. Here is a look at some of the areas in which the act has had an impact.
Every real estate project (where the total area exceeds 500 square meters or has more than eight apartments) must be registered under RERA. Existing projects, where the completion certificate or occupancy certificate has not been issued, are also required to be registered. For registration, developers are required to provide detailed information on the project such as the land status, approvals, schedule of completion, etc. Only when the registration is completed can the project be marketed. To ensure that a violation of the act is not taken lightly, stiff monetary penalties (up to 10% of the project cost) and imprisonment are prescribed.
The act, which has an effective redressal mechanism, has been well-received as providing a speedy and inexpensive forum of choice as home buyers are averse to litigation. The Real Estate Regulatory Authority, which is well-versed in the nuances of the industry, has been able to plug loopholes in the act and provide relief to homebuyers.
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Parveen Mahtani is the general counsel at Tata Realty and Tata Housing.