The real estate scene is about to undergo a sea change the Real Estate (Regulation and Development) Act 2016 (RERA) becomes active in the entire country on May 1. While West Bengal, Tamil Nadu, Maharashtra, Rajasthan, and Karnataka have already framed their draft rules, other states such as Gujarat, Odisha, Madhya Pradesh and Uttar Pradesh have already finalized their rules. Every Union Territory and State will have their own Regulatory Authority, who will be responsible for a variety of things.
The body will maintain a website that will have records of all projects registered with the authority. RERA must be implemented before May 1, failing which will create a gap in states. The RERA Act was passed by the Parliament in 2016 and was supposed to be incorporated in its entirety in all states. All under-construction and ongoing projects fall within the ambit of the Act. The Act will be immensely helpful for both existing buyers of real estate property who haven’t yet got possession of the properties.
This includes both residential and commercial properties. According to The Economic Times, a completion certificate is vital, and all projects that haven’t yet received a completion certificate prior to the commencement of the Act have to come under the purview of the Act. A developer has to register the property with the Regulatory Authority of the State for operationally covering the ongoing project. Under-construction projects have to be registered within three months from the date of commencement of this Act.
If a completion certificate has already been issued for a particular project, the developer need not go for its registration. There are numerous projects that are developed in phases. Purchasers of towers or apartments or phases get entrapped. RERA is going to change all this as it will consider each phase as a standalone project and the promoter has to register each phase of the projector with the regulator separately. Buyers from every state have to go deep into the rules to understand the extent of coverage of the Act.
A general homebuyer may find it difficult to take on this complex exercise. Thus, States must frame rules as per the Act and not keep buyers at a disadvantage. The Centre has already implemented RERA in full in the UTs. Now, it is the responsibility of the States to not dilute RERA and instead implement it within May 1 in letter and spirit. The resale state Act will serve its purpose only when it is followed in its entirety by all stakeholders. In practice, coverage of existing projects may not be as per requirement.
States like Gujarat and UP excluded ongoing projects. Now, the Central Government is under tremendous pressure from homebuyers for bringing such projects under RERA in these States. A lot depends on State Governments who would be ultimately passing the Act for their regions. There’s a possibility that many buyers will get stranded because of the fine-print of the rules. Thus, it is really the responsibility of the States to ensure that the RERA Act is implemented successfully.