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The Real Estate (Regulation and Development) Act, 2016 (RERA), completes seven years since its inception, providing an opportune moment to evaluate its impact on the Indian real estate sector. Introduced to bring transparency, accountability, and consumer protection to the industry, RERA has made significant strides in transforming the real estate landscape. However, it has also encountered obstacles and faced certain pitfalls along the way.
One of the notable gains of RERA has been the establishment of a regulatory framework that ensures greater transparency in the real estate sector. Under RERA, developers are required to register their projects and provide comprehensive information to prospective buyers. This has empowered consumers with access to accurate project details, including timelines, financials, and legal documentation, enabling them to make informed decisions. The establishment of real estate regulatory authorities in each state has further strengthened the regulatory oversight, fostering a fair and accountable environment.
RERA has also played a crucial role in safeguarding consumers’ interests and protecting their rights. The Act mandates the use of escrow accounts, where developers must deposit a specified percentage of project funds to ensure timely completion. This measure has curtailed the diversion of funds and reduced project delays, providing relief to homebuyers who have long grappled with such issues. Additionally, RERA has introduced the concept of “carpet area,” ensuring that buyers receive the exact area they pay for, eliminating discrepancies and promoting fairness.
Despite these gains, RERA has faced several obstacles that have hindered its full implementation and effectiveness. One of the key challenges has been the lack of uniformity in its execution across states. While some states have implemented RERA provisions effectively, others have faced delays in setting up regulatory authorities or in enforcing compliance. This inconsistency has created confusion and disparities in the level of protection offered to consumers, undermining the Act’s core objective of standardization and uniformity.
Another hurdle encountered by RERA is the slow pace of dispute resolution. While the Act stipulates the establishment of Real Estate Appellate Tribunals and Adjudicating Officers for grievance redressal, the backlog of cases and delays in their resolution have been a cause for concern. Timely and efficient dispute resolution mechanisms are crucial to instill confidence among buyers and developers alike, and further efforts are needed to streamline these processes.
Furthermore, the exclusion of certain segments from RERA’s purview, such as ongoing projects and commercial real estate, has been a subject of debate. Critics argue that this exclusion limits the Act’s impact and leaves certain consumer groups vulnerable to unregulated practices. Expanding the scope of RERA to cover these segments could provide a more comprehensive regulatory framework and extend the benefits of consumer protection to a wider audience.
As RERA enters its eighth year, it is essential to address these challenges and work towards refining and strengthening the Act. Collaboration between the central and state governments, along with industry stakeholders, is crucial to ensure consistent implementation, streamline dispute resolution processes, and expand the Act’s coverage to encompass all relevant segments.
The gains achieved by RERA in promoting transparency, consumer protection, and accountability in the real estate sector should not be overlooked. However, acknowledging and addressing the obstacles and pitfalls is equally important for the Act to reach its full potential and achieve its intended objectives.
Group Media Publication
Construction, Infrastructure and Mining
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