(An Article on Real Estate (Regulation &Development )Act, or RERA or RERA Act detailing its Objectives, Key or Salient features and its coming into effect or implementation from May,1st, 2017)
Real Estate(Regulation & Development ) Act, 2016 or as simply called RERA or RERA Act is a reality. Ministry of Housing and Urban Poverty Alleviation, as promised , has gone ahead and notified the balance sections of this important piece of reform legislation on April 19th,2017 making these sections effective from May1st ,2017. It was emphasized by Shri Rajiv Ranjan Mishra, joint secretary, ministry of housing and urban poverty alleviation at a recent two day meet on national review and consultation on the Pradhan MantriAwasYojna (Urban)organized in Delhi, that in all likely hood one will have a fully implemented RERA in place this year
Real Estate Act or RERA as popularly known was passed by the Parliament last year primarily with objective to
Some salient / key features of RERA are
The certain sections of the RERA Act were notified last April effective May 1st,2016 for enabling states to set up administrative mechanism viz to come out with RERA Rules , s set up Regulator &adjudication mechanism. The setting up of regulatory mechanism was necessary before the sections in respect of registration of projects/ registration of agents and consumer rights could be notified .In fact , in terms of RERA Act ,all the states were required to notify Rules including agreement for sale rules by October 2016 and establish the Real Estate Regulatory Authority and the appellate tribunals by April 30, 2017.However, there seems stiff resistance at state level in implementation of RERA .Only few states of Gujarat, Madhya Pradesh, Uttar Pradesh Odisha, and six Union Territories have notified the final rules so far.Maharashtra had finalized its Rules but has to yet to notify, similarly states like Tamilnadu , Rajasthan, Punjab have come out with draft rules but are yet to notify. States like Haryana has to yet come out even with the draft.
Central Government had been repeatedly pushing sates for past one year before notification of other parts of the RERA, however, looking at the slow response of the states , Central Government seems to have lost patience and as promised has now notified other operative sections of the RERA Act pertaining to registration etc with effect from May 1st, 2017. Now ,onus shifts squarely on to the states to notify RERA Rules and set up administrative mechanism on or before May 1st, 2017. It will be interesting to note that all the projects require registration and have to abide by RERA Act, whether RERA in Maharashtra or RERA in Karnataka or RERA in Haryana where Rules have not yet been notifiedor RERA in UP or RERA in Madhya Pradesh or RERA in Odhisha ,where Rules have been notified stand at the same footing and it is the duty of the States to provide administrative mechanism for smooth registration and administration of Act. There are many questions as to whether States will be able to notify Rules and set up Regulator within the time available or if not what would be status of projects in such states etc.
RERA may not be a perfect and it will evolve as it is implemented. It may be skewed toward consumers and developers may feel short changed but with all its shortcomings, it is a reminder to the Real Estate Industry that times are changing and old practices may not sustain. One may argue that Regulations do not change anything, it is self-discipline which does. While it is true , an antidote at times becomes necessary to instill self-discipline.
Central Government has expressed its determination and it is now on Sates to show the intent. Whatever be the case, RERA is a reality and states & developers have to accept the inevitable and other stakeholders may cheer up.
Mr.Venket Rao, Founder & Chief Executive of Intygrat Business Advisory (P) Ltd has over two decades of rich experience in the areas of management, finance, regulatory compliances, secretarial & legal. Over the years, Mr.Rao occupied senior management positions in industry and spent over a decade in Real Estate Industry and is widely popular in real estate circles. He is a Graduate in Arts (English Hons ) from Madras University, Chennai, Associate Company Secretary from ICSI,New Delhi, holds Post Graduate Diploma in International Business from Indian Institute of Foreign Trade (IIFT) and Licentiate of Insurance from Insurance Institute of India, Pune. He has served as Member of the Managing Committee of PHD Chamber of Commerce & Industry and as Director with Delhi Stock Exchange. He was on various committees of PHD Chambers & Delhi Stock Exchange .He has been on various panel discussions on Real Estate & Capital Markets.He is currently member of Capital Markets Committee of PHD Chambers.
The views and opinions expressed in this article are of the author and do not necessarily reflect the official policy or position of any other agency, organization, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author– and, since we are critically-thinking human beings, these views are al-ways subject to change, revision, and rethinking at any time.
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