India's Real Estate Regulatory Authority (RERA)

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  India's Real Estate Regulatory Authority (RERA)


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  • A major change: The RERA tried to infused governance & cleansed black money in the hitherto unregulated real estate sector. 
  • What it is: The Real Estate Regulatory Authority Act aims to protect the interests of homebuyers & boost investment in the real estate sector. It aims to bring transparency & efficiency in sale/purchase of real estate by establishing RERA in each state to regulate real estate sector. 
  • Provisions of the Act: It stipulates that no project can be sold without project plans being approved by the competent authority. Every project has to be registered with the regulatory authority thereby putting end to the practice of selling properties based on false advertisements. This authority also acts as an adjudicating body for speedy dispute resolution. The promoters of the project have to maintain project based separate bank accounts to prevent fund diversion & they have to mandatorily disclose unit size based on carpet area. Either the promoter or the buyer has to pay equal rate of interest in case of default of project thereby reinforcing equity.
  • Implementation at state level: Since RERA came into force, 34 states and UTs have notified rules, 30 states & UTs set up real estate regulatory authorities and 26 appellate tribunals. The web-portal for project information was operationalised by 26 regulatory authorities which ensures full project transparency. 
    1. Maharashtra - While the 2013 bill was pending in the Parliament, the government in Maharashtra enacted its own law in the Assembly in 2012 by taking Presidential assent under Article 254. The state law was not consumer-friendly & central government approved the law for its political gains which could have caused permanent damage to the home buyers of Maharashtra. Later this anomaly was corrected by repealing the state Act under section 92 of RERA by invoking the provision under the same Article 254.
    2. West Bengal - In 2017, West Bengal has enacted its own state law — the West Bengal Housing Industry Regulation Act (WBHIRA) knowing well that there was already a central law on the subject. Despite multiple efforts by the Centre, West Bengal refused to implement RERA, causing irreparable loss to home buyers.
  • Cooperative federalism: Though the Act has been piloted by the Central government, appointment of regulatory authorities & appellate tribunals, notifying the rules are done by state governments. These regulatory authorities are required to manage the day-to-day operations, resolve disputes, and run an active and informative website for project information. What SEBI is to the securities market, RERA is to the real estate sector.
  • Summary: RERA provisions are transformative in nature, has empowered consumers, helping in eliminating unfair trade practices & rectified power asymmetry prevalent in the sector.
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PT's IAS Academy: India's Real Estate Regulatory Authority (RERA)
India's Real Estate Regulatory Authority (RERA)
Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!
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