RERA resolves 1.25 lakh complaints, transforms India’s real estate sector

In a bid to boost consumer confidence, the Real Estate (Regulation & Development) Act, 2016 (RERA) has resolved nearly 1.25 lakh consumer complaints against developers, according to the Economic Survey 2023-24. Enacted to reform India’s real estate sector, RERA aims to improve transparency, accountability and financial discipline, thereby empowering homebuyers and strengthening the economy.

Before RERA, the real estate sector was plagued by problems like project delays, lack of transparency and mismanagement of funds. Homebuyers were often at the mercy of builders who failed to deliver their homes on time despite receiving full payments. RERA was introduced to directly address these issues.

The main objectives of RERA are to ensure transparency, accountability and financial discipline in the real estate sector. Transparency is achieved by requiring developers to provide detailed details of their projects, including necessary permissions, project timelines, specifications and amenities. Accountability is enforced by holding developers to their commitments, ensuring that they adhere to promised delivery dates and project specifications. Financial discipline is maintained by requiring that 70% of the funds collected from homebuyers be kept in a segregated bank account, which can only be used for construction and land costs, to prevent misuse of funds.

To protect consumers, RERA has set up a rapid dispute resolution mechanism that addresses homebuyer complaints quickly and effectively. The law also regulates projects by requiring registration for projects that are larger than 500 square meters or have more than eight apartments, thereby reducing the risk of misrepresentation or false promises by developers.

Since its implementation, RERA has made significant progress. Over 1,30,186 real estate projects and 88,461 real estate agents have been registered under the Act. Moreover, nearly 1.25 lakh consumer complaints have been resolved, which shows the effectiveness of the dispute resolution mechanism. All states and union territories, except Nagaland, have notified RERA rules, with 32 states and UTs setting up Real Estate Regulatory Authorities.

RERA has several provisions to further protect homebuyers. A sale agreement is mandatory at the time of project registration to ensure that all parties are aware of and agree to the project terms and conditions. Developers must obtain consent from two-thirds of the allottees/homebuyers for any changes in the project layout. Furthermore, the law specifies terms for refunds, compensation and penalties if developers fail to meet their obligations.

RERA has significantly transformed India’s real estate sector, bringing much-needed transparency, accountability and financial discipline. By protecting the interests of homebuyers and ensuring that developers adhere to their obligations, RERA has increased confidence in the real estate market and contributed to the growth of the sector.

As the real estate sector continues to evolve, the role of RERA remains crucial in ensuring a fair and transparent environment for all stakeholders. With continued compliance and enforcement, the Act promises to protect the interests of homebuyers and lead the sector towards greater accountability and growth.