From UPSC perspective, the following things are important :
Prelims level : Article 254 of Indian Constitution
Mains level : Paper 2- RERA and its benefits to the consumers
The article highlights the various provision of RERA and its overall impact on the sector.
How it changed the real estate sector
- Real Estate (Regulation and Development) Act (RERA) was enacted in 2016 and it had been in the works for more than a decade.
- RERA has infused governance in a hitherto unregulated sector.
- Along with demonetization and GST, it has, to a large extent, cleansed the real estate sector of black money.
- It has transformational provisions, conscientiously addressing issues that have been a constant bane for the sector.
Important provisions of RERA
- The Act stipulates that no project can be sold without project plans being approved by the competent authority and the project is registered with the regulatory authority.
- This provision ended the practice of selling on the basis of deceitful advertisements.
- Promoters are required to maintain “project-based separate bank accounts” to prevent fund diversion.
- The mandatory disclosure of unit sizes based on “carpet area” strikes at the root of unfair trade practices.
- The provision for payment of “equal rate of interest” by the promoter or the buyer in case of default reinforces equity.
- These and many other provisions have empowered consumers, rectifying the power asymmetry prevalent in the sector.
How RERA is an effort in cooperative federalism
- Though the Act has been piloted by the Central government, the rules are to be notified by state governments.
- The regulatory authorities and the appellate tribunals are also to be appointed by them.
- The regulatory authorities are required to manage the day-to-day operations, resolve disputes, and run an active and informative website for project information.
- Since RERA came into full force, 34 states and Union territories have notified the rules, 30 states and Union territories have set up real estate regulatory authorities and 26 have set up appellate tribunals.
- The operationalization of a web-portal for project information, which is at the heart of ensuring full project transparency, has been operationalized by 26 regulatory authorities.
- Around 60,000 projects and 45,723 real estate agents have been registered with regulatory authorities.
- Twenty-two independent judicial officers have been appointed to redress consumer disputes, and 59,649 complaints have been disposed-off.
Consider the question “What were the various problems faced by the consumers in real estate sector? How various provisions in RERA helped in the protection of consumers’ interests?”
RERA is to the real estate sector what SEBI is to the securities market. It helped consumers from the various malpractices in the real estate sector.