The Real Estate Sector Real Estate (Regulation and Development) Act, 2016 [RERA]: Empowering Transparency and Accountability

Real Estate (Regulation and Development) Act, 2016 came into force on 1st May, 2016. RERA was established to regulate the transactions between the Developers/ Promoters and the allottees and to protect the purchasers / allottees from fraudulent transactions and unfair practices of the Developers / Promoters, to protect the interest of the purchasers / allottees as well as to create awareness amongst the common people about their rights and obligations and to generate faith and confidence amongst the purchasers in real estate industry and thereby increasing investment in real estate. Before the commencement of RERA, the purchasers / allottees were lacking knowledge and awareness due to which they were exploited by the Developers / Promoters by making fraudulent transactions and misrepresentation. RERA not only protect the rights of the purchasers / allottees but also protect the rights of the Developers / Promoters against the payment defaulters.

‘Transparency’ being the motive of the Act helps the Developers to reach out to the public at large thereby marketing their projects with full potential. RERA requires every real estate project to be registered with RERA. Accordingly, the Promoters / Developers shall create, maintain and update their RERA profile from time to time as required under RERA disclosing all the information with respect to the real estate project to the public at large. RERA has clarified the concept of ‘carpet area’ which was in grey area, since it was not defined in any law governing the field of real estate and also, there was no standard formula to calculate carpet area of a unit and hence, each Promoter / Developer had its own formula to calculate carpet area. The Act aims to establish state level regulatory authorities to ensure that the sale of plot, apartment or building, or sale of the real estate project is carried out in a transparent and efficient manner. The Act established an adjudicating mechanism for speedy disposal of disputes and Appellate Tribunal to hear appeals. In case of violation of the provisions of RERA, 2016 and rules and regulations made thereunder by Promoters /Developers or by the purchasers / allottees, a Complaint can be filed before Real Estate Regulatory Authority and Appeal against its Order can be filed before Appellate Tribunal. The establishment of RERA has contributed to greater transparency and reliability.