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Real Estate Regulatory Authority (RERA)
Context:
The Supreme Court expressed dissatisfaction with the functioning of the Real Estate Regulatory Authority (RERA), stating that it has turned into a “rehabilitation centre” for retired bureaucrats.
More on News
- A Division Bench made this observation, adding that the bureaucrats have undermined the entire purpose of the Act.
- The court was hearing an appeal against a Delhi High Court judgement, which had dismissed petitions seeking directions to prevent banks and financial institutions from charging pre-EMIs or full EMIs from the petitioners.
About RERA
The Real Estate (Regulation and Development) Act, 2016, commonly referred to as RERA, is a landmark legislation in India aimed at promoting transparency, accountability, and efficiency in the real estate sector.
Objectives of RERA:
- Regulation of Real Estate Transactions: Ensures buyers are protected from unfair practices in residential and commercial property dealings.
- Mandatory Registration: Requires real estate projects and agents to register with RERA, promoting compliance among developers.
- Timely Completion: At least 70% of buyer funds must be kept in an escrow account, ensuring they are used only for project construction.
- An escrow account is a financial arrangement where a third party holds funds or assets on behalf of two parties involved in a transaction until certain conditions are met.
- Transparency: Developers must disclose project details, such as layout plans, approvals, and carpet area, helping buyers make informed choices.
- Standardised Agreements: RERA establishes fair sale agreements, preventing contracts that favour promoters over buyers.
- Dispute Resolution: Provides a fast-track mechanism for resolving real estate disputes through Regulatory Authorities and Appellate Tribunals.
Key Provisions:
- Registration: Projects must be registered with RERA before advertising or selling.
- Promoter Obligations: Promoters must follow approved plans, update buyers, and secure all necessary approvals before construction.
- Consumer Rights: Buyers can claim compensation for delays or defaults and are entitled to timely possession of their property.
- Establishment of Appellate Tribunals: RERA provides for the establishment of Appellate Tribunals to hear appeals against decisions made by RERA authorities, ensuring a structured mechanism for dispute resolution.
- Fast-Track Dispute Resolution: The Act includes provisions for quick resolution of disputes between buyers and builders, enhancing accountability in the sector.
- In summary, RERA represents a significant step towards reforming the Indian real estate sector by enhancing buyer protection, ensuring timely project completion, and promoting transparency in real estate transactions.