RERA- Emergence of empowered customer
According to the property experts, RERA (Real Estate Regulation Act) will not only empower home buyers but also prove to a game changer for the real estate industry. This act is likely to boost housing demand as it will bring more efficiency and accountability in the sector.
Traditionally, property developers in Mumbai used to depend on the money of buyers dur-ing project launches and bookings. They siphoned money from one residential or commercial project to another but now with RERA, this will stop. With the new clause, it will become necessary for builders to come clean about their projects and maintain transparency. They will have to end their dependency on the buyer’s money and set aside 70% of the funds received from the sale of a certain project in an escrow account. This money will have to be used only for the construction site and this will help them deliver the property on time. There will be less or zero possibilities of developers defaulting on the project.
RERA won’t allow real estate developers in Mumbai to divert funds from one project to another. However, property experts are of view that in Mumbai, the new housing law will increase property rates to some extent because the new act may edge out small builders and squeeze supply. But home buyers will continue benefitting because the law will hold builders and developers accountable for commitments they make to buyers. It is believed that RERA will ensure the timely completion of projects and buyers won’t have to deal with unscrupulous builders anymore.
Buyers always have to wait a lot before they get possession of their flat or commercial space. But with RERA, this concern will be taken care of. There will be an addressal me-chanism through consumer forum or RERA court with the help of which buyers can report developers who are involved in wrongdoings.
Even the Reserve Bank of India has given a nod to domestic lenders for investing in in-struments like REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Invest-ment Funds) which will help boost the sentiments of investors in markets.
So RERA will surely help customers become more confident about property investment. It will play a vital role in regulation of malpractices related to delays and frauds in the real estate industry. Even GST (Goods and Services Tax) has been introduced to standardise and bring tax neutrality.