According to the latest report by real estate research firm , India’s recently introduced Real Estate Regulatory Authority Act of 2016 (RERA) has affected real estate development in the country. Although rera can be seen as a good thing in most cases, the recent coronavirus outbreak in India has impacted this new law greatly. This article details how rera and the coronavirus outbreak have been negatively impacting India’s real estate industry over the past few months.
The Real Estate (Regulation and Development) Act, 2016 has recently been passed to protect consumers from fraudulent practices. The new law empowers consumers with an easy way to file complaints. It also mandates developers to register projects with RERA before selling any apartments. If they fail to do so, they will be penalized and liable for legal action. As a result of RERA implementation, most builders have already halted bookings and sales, as per reports on TOI.
RERA Launched in Maharashtra
On May 1, 2017, India’s biggest state in terms of number of cities and towns, Maharashtra, became one of four states in India (together with Gujarat, Jharkhand and Telangana) to implement RERA. The Real Estate (Regulation and Development) Act came into force in 2016 after years of pushing by anti-corruption campaigners. Not all states were eager to bring it in; realtors lobbied hard against it for fear that projects would be stalled while approvals were given. For example, Madhya Pradesh’s decision to not implement RERA was followed by protests from home buyers who accused builders there of shoddy construction practices. The Act mandates that every project must have an approved layout plan before any construction starts.
RERA Launched in Delhi
In a landmark step towards making home ownership more secure, all housing projects in Delhi will now be governed by a set of rules under RERA. With effective from 26 March,2016 RERA will bring together buyers and developers at a common platform to address their grievances. The Real Estate (Regulation and Development) Act has made it mandatory for all unsold inventory of projects where apartments are on offer to be registered with RERA within three months of launching. Projects not registered will not get completion certificates for their units or land. Failure to meet timelines may lead to cancellation of registration with Sebi.
RERA’s Impact on Real Estate Prices
Although they’re not yet in place, one of India’s most significant financial reforms has already begun to affect real estate prices. The Real Estate (Regulation and Development) Act, also known as RERA, was recently passed to protect buyers from fraudulent developers. The new legislation forces all state governments to enforce new rules on transparency and accountability for builders. There are still a few years before these rules become effective, but it’s predicted that they’ll have a large impact on real estate prices in Indian cities where new properties are being released at a rapid pace. In fact, some areas have already seen price drops of 15 percent or more since RERA was signed into law in June 2016.