RERA ensures transparency, accountability
With the Real Estate (Regulation and Development) Act (RERA) coming into force starting this month, it is now expected that the much-needed legislation will usher in greater transparency into the real estate sector, which has been a cesspool of black money and land sharks for several years. The downfall of the real estate sector goes back to the time of the great recession and inflation. This double whammy had led to the activity being highly unregulated, with builders resorting to unholy practices like diversion of funds, delay in construction, over-charging, compromising on quality etc. All such malpractices had come to hurt home buyers gravely, who, in the absence of a law, were left struggling under the whims of developers. They had no other option but to complain to the civil courts or the consumer courts, which were already over-burdened with cases. The need for regulating the real estate sector was long felt, but inefficiency of past Governments failed to address the problems. The prospects of this sector was such that it was one-sided — only the developers were loaded with benefits. However, with the new Act coming into force, the story may well take a positive turn as the provisions of the Act are such that they call to make the consumer the king.
Crucially, the Bill calls for individual States to appoint a real estate regulator, and makes it obligatory for the developers to give details of their projects so that they can be made public. The details, as obtained on the website, will ensure that buyers be able to weigh options and take the right decision. Simultaneously, this will also keep a check on fraudulent practices of developers. Additionally, to ensure accountability, the RERA makes it mandatory for the builders to submit details of their projects — be it the ones that have just been approved, or the ones that are ongoing or the ones that need alterations. Every minute detail, which includes information regarding how the funds would be utilised, to providing an estimate time of construction of the project, to listing the list of buyers — from the time of signing of the agreement, to completion, to delivery — virtually everything will now come under the scanner of the regulatory body for certification. It also requires the developers to submit 70 per cent of the money collected from the buyers in separate bank accounts to prevent diversion of funds to other projects. The provisions of RERA may sound draconian to the builders but they must blame themselves for the present hardening of rules. It is also the responsibility of the States, which have not yet notified their rules, to come together and not get influenced by lobbyists. Given the complexity of the provisions, it may take a while for developers, and also buyers, to make a smooth transition to the new rules. But it must be ensured that RERA, which has the potential to completely overhaul the real estate sector and make land prices affordable, does not become a lost opportunity.