Review of RERA

About the Act

The real estate (regulation and development) Act 2016 was enacted with the main purpose to establish the state level regulatory authorities called Real Estate Regulatory Authority for regulation and promotion of the real estate sector.
The Act has the following objectives:
- To protect the interest of the allottees (buyers) and ensure their responsibility;
- To maintain transparency and reduce the chances of fraud;
- To implement Pan-India standardization and bring about professionalism;
- To enhance the flow of correct information between the home buyers and the sellers;
- To impose greater responsibilities on both the builders and the investors;
- To enhance the reliability of the sector and thereby increase confidence amongst the investors.
Residential real estate projects, with some exceptions, need to be registered with RERAs. Promoters cannot book or offer these projects for sale without registering them. Real estate agents dealing in these projects also need to register with RERAs.
On registration, the promoter must upload details of the project on the website of the RERA. These include the site and layout plan, and schedule for completion of the real estate project.

70% of the amount collected from buyers for a project must be maintained in a separate bank account (escrow account) and must only be used for construction of that project.
As per RERA, a promoter is responsible for rectification of a structural defect or any other defect in workmanship, quality or provision of services in the project for five years from the date of handing over possession, without further charge.

The Act establishes state level tribunals called Real Estate Appellate Tribunals. Decisions of RERAs can be appealed in these tribunals.

Why in News?

Eight years after Parliament passed the Real Estate (Regulation and Development) Act, 2016, the Union Ministry of Housing and Urban Affairs is in the process of reviewing the functioning of the Act, including by holding regular meetings with homebuyers and setting up a data collection unit within the Ministry.
This is to lay the groundwork for any future amendment to the Act, though there is no immediate proposal for the same.
Under the Act, state-level Real Estate Regulatory Authorities (RERAs) have registered over 1.09 lakh real estate projects and disposed of over 1.11 lakh complaints, as per data provided by the Ministry to the Lok Sabha in August 2023.

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