The Real Estate market will have a better future under RERA as it will create transparency in the whole market. The buyers will be benefited in many ways but most importantly it will change the whole mindset of the developers who will now be competing to win buyers through timely delivery and quality of work.
RERA will revive the whole market to its previous glory when buyers used to invest in real estate to achive maximum returns as appreciation of their investments were amongst the best. RERA will enable to keep a check on the nature of participants in the market be it, developers or brokers, the buyers will be able to check and cross check on the projects. All this would slowly make way for committed developers in the long run. This in turns culls out the mall practices adopted to lure a buyer to spend his/her life savings in the market.
The Real Estate Regulation and Development act (RERA) 2017 has already been in charge from May 1, 2017, before dealing and buying a property, a legal affidavit will be built which will be signed by the promoter on the following agreements:
1. A proper declaration by the promoter for stating the time period in which the project will be completed.
2. Promoter will provide legal valid documents of the land in which the construction will begin, which earlier delayed delivery of the project.
3. 70% of the amount collected by the buyer shall be deposited in a separate account which can cover the cost of construction.
4. The affidavit will also carry a date of possession and rate of interest in case of any default.
5. If the builder will not adhere to the rules, along with the losing registration of the project, the builder will face imprisonment for upto 3 years.
Apart from benefits that RERA has added, it has brought down the home loan rates considerably. While earlier, the rate used to be above 9.5% but now they are hovering around 8.5%, though 1% maybe a small number to take notice but its impact on buyers pockets is huge.
There are further chances of reviving real estate market up to the mark which will surely interest home buyers to invest and buy property without any fear of fraud. Due to such progressive rules, it will most likely generate competition among the developers as the buyers will be interested in investing their money into the upcoming projects without much fear. The developers now will have to register their ongoing projects with RERA, failing to do so would delegitimize the value of the said developer.
The ultimate motive of this act is to bring transparency as it has always raised a question of worry in the mind of buyers, keeping them aloof from investing in it. But after the implementation of RERA, developer have triggered themselves to be in the top of the race to become a real estate maven and in few months the real estate market will be in an uptrend.
The author is MD, Aliens Group