RERA or Real Estate (Regulation and Development) Act came into force on 1 May 2016 to regulate the still largely unregulated real estate sector.
Before RERA, there was no special law dealing with real estate sectors. They were governed by Consumer Protection Act, 1986, Indian Contract Act, 1872, Specific Relief Act, 1963, Indian Penal Code, 1860, Competition Act, 2002. The Transfer of Property Act, 1882, Urban Land (Ceiling and Regulation) Act, 1976, and The Registration Act, 1908 Despite of all these laws, the hardships of homebuyers (as consumers where persisted). The existing provision where only for curative measures against consumer exploitation. Due to this many builders took homebuyers for a ride. Delays were rampant and homebuyers usually did not have a reliable source to address their grievances. In order to resolve all hardship, RERA or Real Estate (Regulation and Development) Act, 2016 has been enacted. The purpose of Enactment of RERA is to create the faith of the buyers in the Real Estate sector and to bring transparency in the Real Estate transactions.
According to RERA, every state and Union territory will have its own regulatory authority and a set of rules to govern the functioning of regulator. Centre has mentioned the rules for Union territories including the National Capital Delhi. While many states are still behind the schedule for the notification of RERA rules, many have notified rules and the regulator has started functioning,
Despite seeing a dip in last few years, the ticket prices are relatively very high and inventories are piling up. Low demand is also adding to the reduced recovery of capital by developers. This is the reason why developers are not reducing the ticket prices.
RERA addresses issues like delay in possession, high price, quality of construction, title and other changes.
Delay in projects is the biggest issue faced by the buyers. Reasons are many and impact is huge. Since the last decade, many projects have seen delays of 7-8 years. Projects launched after the turn of this decade have also faced delays. Some were into trouble even before getting started. The reasons were changes in regulations by authorities, diversion of funds to other projects, environment ministry, national green tribunal NGT etc. and other reasons like bodies involved in governing transport and infrastructure development. In many projects, the issue of land acquisition creates problem. Builders often sell their projects to the investors even without the approval of plans, unauthorized FAR increase, bad construction quality, projects stuck in litigation etc.