Dr.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY

Real Estate Law Project

RERA ACT THROUGH A

MAGNIFYING GLASS
2023-24

Submitted By: Submitted To:

Abhishek Pratap Singh Dr. Manoj Kumar

190101008 Assistant Professor

Section- B (Law)
 ACKNOWLEDGEMENT

I owe a great many thanks to a great many people who helped me and supported me during
the completion of this project. Words are inadequate in offering my deep sense of gratitude to
my Professor Dr. Manoj Kumar for his precious guidance. With his enthusiasm, inspiration,
and great effort to explain things clearly and in a simple manner, he helped throughout my
analysis of work with lots of encouragement, sound advice and good innovation. I would like
to thank the Library Staff of Dr. Madhu Limaye Library who extended their assistance to me
by helping me out in consulting the relevant books. Finally, I would like to extend my
gratitude to my batchmates and seniors for providing me some unique ideas and insights
which helped me make this project even better. I know that despite my sincerest efforts some
discrepancies might have crept in, I hope and believe that I would be pardoned for the same.

Thanking You,

Abhishek Pratap Singh

 CONTENTS

Contents
ACKNOWLEDGEMENT ......................................................................................................... 2

CONTENTS ............................................................................................................................... 3

INTRODUCTION ..................................................................................................................... 4

ABSTRACT: .......................................................................................................................... 4

INTRODUCTION: ................................................................................................................ 4

PROJECTS COVERED UNDER RERA: ............................................................................. 6

PROVISIONS WHERE ACT IS SILENT: ......................................................................... 10

IMPACT OF RERA: ............................................................................................................ 10

ADVANTAGES OF RERA................................................................................................. 15

DISADVANTAGES OF RERA .......................................................................................... 16

CONCLUSION ........................................................................................................................ 17
 INTRODUCTION

ABSTRACT:
Over the past decades, India has emerged as one of the few world economies with a
combination of healthy economic perspective and successive growth at global platform,
amidst the mood of cynicism and reservations of emerging economies. It is widely accepted
that India is on its road to global growth and emerging as a prospective world leader
registering sustainable development to all. In a bid to ensure sustainable growth and
development of the nation along with the welfare of entire populace the Government has
directed thoughtful focus on each and every driver contributing to the growth of Indian
economy. This perspective is well reflected in various government initiatives, such as,
various economic reforms, legal transformations, implementing structural changes, and
focusing on fundamental growth of various sectors: small, micro, medium and large. Real
Estate Sector, which seems to be one of the major contributors in the inclusive growth of the
nation with the contribution of 8.53% of total GDP and growth rate to the tune of 30% is also
clutching the share of its regulatory attention. The Real Estate sector is of prime importance
for individual as well as of national importance. Significant performance of Real Estate
Industry with the significant rights and liabilities involved in the transactions has fetched the
government attention for proper policy and regulation of real estate sector. This led to a deep-
seated legal transformation in the form of Real Estate (Regulation and Development) Act,
2016. Real estate Regulation and development act 2016 is a Revolutionary act in the history
of construction industry. This act is useful for consumers as well as for builders for making
transparency between them. This research paper aims to study implementation, impact and
related issues about the Real Estate Regulation Act and its key role in contributing to India's
economic growth.

INTRODUCTION:
It is a well-known fact that housing is one of the basic needs of human. Access to adequate
housing can be a precondition for the enjoyment of several human rights, including the rights
to work, health, social security, vote, privacy or education. Safe, secure and adequate
housing is a fundamental need of human being. Realizing the gravity of the problem of the
housing, right to housing has been recognized under international as well as regional human
rights law as it is the basic right of the individual. In the line with the international human
rights law, various States have also carved their legal system so as to encompass right
housing as the fundamental right of the citizens. The Indian judiciary has demonstrated
commendable interest towards right to housing and interpreted this right under the context of
right to life provided under article 21 of the Constitution. 1

The Real Estate sector is of prime importance for individual as well as of national
importance. It is well known that the real estate industry in India is a highly unorganised and
poorly regulated business. Real estate is a sector where the entire life savings are put in the
trust of a developer or an agent and when the product is not delivered, there is untold misery,
harassment and hardship, leave alone the financial loss. While segments of the industry have
been advocating self-regulation in an era of liberalisation, others have been advocating for
strong legislation to regulate the private sector so that gullible consumers are not cheated.2

To regulate the sector and to bring transparency, The Real Estate Regulation Act (RERA)
was introduced on 1 May, 2016 and implemented on 1 May, 2017. 3 Before the introduction
of The Real Estate (Regulation and Development) Act, 2016, Indian real estate customers
had little legal recourse and consumer protection was offered to them under various acts such
as: The Indian Contract Act, 1872; The Consumer Protection Act, 1986. Indian consumers
had to approach various authorities such as, Consumer Courts and Civil courts, to get their
grievances addressed. Before the passage of the act, no single regulatory authority existed
for regulation of real estate sector and buyers were facing problems like timely delivery of
projects, possession not being handed over by the developer, high rate of interest being
charged on late payments, multiple bookings for the same property, mis selling of projects
etc. The developers were facing issues like delay in construction permits, late payments by
homeowners and operations in a non-transparent environment.4

The act is a remarkable change in improving the efficiency of the government in regulating
the Real Estate Sector. The act provides various provisions, which focuses on various issues
of promoters, builders, real estate agents and customers as well. This focus on transparency,
safety, imposes penalties on errant builders and follows the regulatory mechanism in the
field. The prime objectives of this act are:

1
http://researchersworld.com/ijms/vol5/issue4_8/Paper_10.pdf.
2
https://indianexpress.com/article/india/real-estate-regulation-rera-an-act-seeing-dilution-missing-deadlines-
andagitations-4782950/.
3
http://researchersworld.com/ijms/vol5/issue4_8/Paper_10.pdf.
4
http://www.iraj.in/journal/journal_file/journal_pdf/14-504-154295508593-99.pdf.
 - to bring accountability and transparency so as to make real estate transactions simple

as, housing is a key input in economic, social, and civic development;

- to relief buyers from the mistreatment of unfair builders it specifies certain norms,

rules and regulations to be followed by all builders and developers.5

As provided in the Real Estate Regulation and Development Act 2016, the objects and
reasons for which the Act has been framed are:

- ensure accountability towards allottees and protect their interest

- infuse transparency, ensure fair-play and reduce frauds & delays
- introduce professionalism and pan India standardization
- establish symmetry of information between the promoter and allottee
- imposing certain responsibilities on both promoter and allottees
- establish regulatory oversight mechanism to enforce contracts
- establish fast- track dispute resolution mechanism
- promote good governance in the sector which in turn would create investor
confidence6

Scope: The Act applies to under-construction as well as new projects. Residential and
commercial projects are included in its ambit. Real estate agents or brokers too are included
in the purview of the Bill. The scope of the Bill covers all parties to a real estate transaction.

RERA requires all states in India to set up an Appellate Tribunal to address homebuyers’
grievances. The Act requires all builders to register their projects with the Tribunal before
initiation.7

PROJECTS COVERED UNDER RERA:

- Commercial and residential projects including plotted development.
- Projects measuring more than 500 sq mts or 8 units.
- Projects without Completion Certificate, before commencement of the Act.

5
http://researchersworld.com/ijms/vol5/issue4_8/Paper_10.pdf.
6
https://www.icsi.edu/media/webmodules/REAL_ESTATE_REGULATION_AND_DEVELOPMENT_ACT.pd
f.
7

https://www.academia.edu/37100463/Impact_of_Real_Estate_Regulation_and_Development_Act_RERA_on_I
ndias_Real_Estate_Sector.
 - The project is only for the purpose of renovation / repair / re-development which does
not involve re-allotment and marketing, advertising, selling or new allotment of any
apartments, plot or building in the real estate project, will not come under RERA.
- Each phase is to be treated as standalone real estate project requiring fresh
registration.8

The Real Estate Regulation Act makes it mandatory for all commercial and residential real
estate projects. If the land is more than 500 square metres, or eight apartments, to register
with the Real Estate Regulatory Authority (RERA) for launching a project in order to
provide greater transparency in project execution and marketing.

Projects either approved or rejected by RERA have to put application within 30 days and
also have to go for registration within 3 months after commencement. Once the project
registration is completed the log in Id and password is provided to fill up the rest necessary
information about the applicant. If registration gets delayed or failed a penalty is charged
10% on the project cost or 3 years of imprisonment. This Act brings uncounted money to
screeching halt from being aroused into the sector. Now 70% of the money is made
compulsory to deposit in the bank accounts of the dealers through cheques. It is clearly
defined major benefit in the act the consumers have to pay the prices which is based on
carpet area including kitchen and toilet. It ensures the timely completion of the project but in
case if it gets delayed in handover in the given time framework, complaint can be registered
against the dealer and it has to dispose within 60 days.

RERA helps to develop firms and promoters to maintain the escrow account for each of their
projects, it provides clarity to buyers, developers to provide information about their ongoing
projects and requires submitting the approval of the plans for the collected revenues from
allottees. It’s state regulators responsibility to put up all the details on website about
registered projects to access on their ease. RERA also imparts about the quality of
construction in projects to ensure consumer protection from the builder and rectify the matter
within 30 days of time period only when buyer does not want to take the money back from
the builder.9

8
https://housing.com/news/rera-will-impact-real-estate-industry/.
9
http://researchersworld.com/ijms/vol5/issue4_8/Paper_10.pdf.
The most positive aspect of this Act is that it provides a unified legal regime for the purchase
of flats; apartments, etc., and seeks to standardise the practice across the country. Below are
certain key highlights of the Act:

1. Establishment of the regulatory authority: The Act establishes Real Estate

Regulatory Authority in each state and union territory. Its functions include
protection of the interests of the stakeholders, accumulating data at a designated
repository and creating a robust grievance redressal system. To prevent time lags, the
authority has been mandated to dispose applications within a maximum period of 60
days; and the same may be extended only if a reason is recorded for the delay.
Further, the Real Estate Appellate Authority (REAT) shall be the appropriate forum
for appeals.10
2. The promoter of a real estate development firm has to maintain a separate escrow
account for each of their projects. A minimum 70 per cent of the money from
investors and buyers will have to be deposited. This money can only be used for the
construction of the project and the cost borne towards the land.
3. To provide clarity to buyers, developers will have to keep them informed of their
other ongoing projects.
4. RERA requires builders to submit the original approved plans for their ongoing
projects and the alterations that they made later. They also have to furnish details of
revenue collected from allottees how the funds were utilised, the timeline for
construction, completion, and delivery that will need to be certified by an
Engineer/Architect/practicing Chartered Accountant.
5. It will be the responsibility of each state regulator to register real estate projects and
real estate agents operating in their state under RERA. The details of all registered
projects will be put up on a website for public access. Existing projects where the
completion certificate (CC) or occupancy certificate (OC) has not been issued, are
also required to comply with the registration requirements under the Act. While
applying for registration, promoters are required to provide detailed information on
the project e.g. land status, details of the promoter, approvals, schedule of
completion, etc. Only when registration is completed and other approvals
(construction related) are in place, can the project be marketed.

10
https://housing.com/news/rera-will-impact-real-estate-industry/.
 6. RERA talks about the quality of construction in projects. Over the last few years,
buyers have protested about poor of flats. The regulator will ensure protection to
buyers in this matter for five years from the date of possession. If any issue is
highlighted by buyers in front of the regulator in this period including in quality of
construction and the provision of services, the developer will have to rectify the same
in a matter of 30 days.
7. Developers can’t invite, advertise, sell, offer, market or book any plot, apartment,
house, building, investment in projects, without first registering it with the regulatory
authority. Furthermore, after registration, all the advertisement inviting investment
will have to bear the unique RERA registration number. The registration no. will be
provided project-wise.
8. After registering the project, developers will have to furnish details of their financial
statements, legal title deed and supporting documents.
9. If the promoter defaults on delivery within the agreed deadline, they will be required
to return the entire money invested by the buyers along with the pre agreed interest
rate mentioned in the contract based on the model contract given by RERA.
10. If the buyer chooses not to take the money back, the builder will have to pay monthly
interest on each delay month to the buyer till they get delivery.
11. After developers register with the regulator, a page will be created for the builder on
the regulatory authority’s website. The developer will be given login credentials
using which it will upload all the information regarding the registered projects on the
regulator’s website. The number, type of apartments, plots and projects and their
completion status will be updated at a maximum quarterly basis.
12. To add further security to buyers, RERA mandates that developers can’t ask more
than
10 per cent of the property’s cost as an advanced payment booking amount before
actually signing a registered sale agreement.

13. The regulator will have the power to fine and imprison errant builders based on a case
by case basis. To ensure that violation of the Act is not taken lightly stiff monetary
penalty (up to 10% of the project cost) is prescribed and imprisonment can go up to a
period of three years for a project.11

11
https://indianexpress.com/article/what-is/what-is-rera-and-how-will-it-help-homebuyers-4635705/.
PROVISIONS WHERE ACT IS SILENT:

1. Overlap with certain special Acts: Special Acts may have an overriding effect.
However, there is an overlap of rules. This needs further clarification which is
important to safeguard the interests of developers as well as consumers.
2. Compliance related to mixed projects: There is no clarity on the type of project and
their definition – whether the project is a mixed, standalone residential or commercial
or a large-scale township. For instance, a certain portion of a mixed land use project
or a particular tower of a large township project can be treated as a single project.
3. Change of guard during the ongoing projects: A number of times companies sell
stakes or a portion of the project to a private equity fund. As a result, the management
changes. Act is silent on its impact and the eventuality.
4. Structural defect and the ones induced by allottees: There is a no mention of
structural defects introduced by allottee after occupation certificate has been issued.
5. Withdrawal from separate account at the time of refund: In case of termination,
where the promoter is required to refund the instalments received from the allottee, it
is not clear if the promoter will be permitted to withdraw from the separate account
70 per cent of the realisations received from the allottee.12

IMPACT OF RERA:

1. IMPACT OF RERA ON ONGOING PROJECTS

The developers who still has under construction projects may face difficulty due to RERA.
As per the Act, all the ongoing projects have to now register first with the regulatory
authority before moving further in completing the project. They are also prohibited from
advertising or promoting the property before registration. These steps are likely to delay
construction and sale of existing property greatly. RERA also mandates builders to issue
occupation or completion certificate before handing over possession to the buyer. As of
today, there are lakhs of flats in all major cities of India like Mumbai and Bangalore who
have failed to do so. The further step to regularise such properties remains unclear. Another
concern for these developers is whether they will get the certificates on time or not. Lastly,
in cases where developers seek an extension the amount of time granted for project
completion would depend upon the authority.

12
https://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/rerathe_state_affair.pdf.
 2. IMPACT OF RERA ON NEW PROJECTS
Any project with over 8 apartments or size of over 500 sq. mt. is required to be registered
under RERA. The developers have to register each stage of construction independently with
the state Tribunal. Since builders have to register their new projects, big players cannot
prelaunch a project. Pre-launches used to be the major source for raising the capital. It means
the developers now have to borrow capitals at higher rates which will be ultimately bore by
the consumers. Also, there is a cap on the amount of deposit builders can accept from
buyers. Under RERA a builder cannot take more than 10% as initial deposit. Advertising a
project without registering it first is also banned. The Act also addresses two major issues
faced by buyers:

1. Delay in construction, and

2. quality of construction.
In both cases if a builder flouts on the RERA norms, he or she will be liable to compensate
the buyer for the loss. The compensation is decided in the initial agreement signed between
the parties. It also specifies the amount of interest payable by the builder in case of
construction delay.

3. IMPACT OF RERA ON BUILDERS

Under RERA builders are mandated to register critical information regarding the project.
This includes:

• Layout
• Promoter details
• Land title status
• Statutory approval status
• Agreements
• Details of the brokers
• Architects and contractors

Failure to register this information will lead them to penalties. They are bound by a five-year
agreement with the buyer for quality assurance. This means that within five years of selling a
property, if construction quality issues arise, they will have to repair it. Moreover, they have
to ensure formation of Residents’ Welfare Association within three months of the project
completion. RERA clause that buyers can claim a refund in case of delay or dissatisfaction
with property puts developers in a fix. In case many of them claim refund in one go, it will
affect developers badly as liquidity in construction and real estate is very low.

Apart from disclosing critical information mentioned above to buyers, they also have to
state the exact size (carpet area) of the property. They can no longer state super-built up area
(i.e. common area, veranda, etc.) as size of the property. Due to this they can no longer
charge buyer the amount for super built up area. Therefore, these charges will be passed on
to the buyer as increased carpet area price. Also, it is expected that cost for developers will
increase as they can start selling only after getting the approval. There will be consolidation
in the market and thus, only few players may exist. Currently, developers are postponing
their new launches in order to understand the impact of RERA act and focus more on
completing the existing projects. It means there will be fewer launches due to uncertainty.
There were 73% less launches in the second half of 2016 as compared to the same period of
2015.

4. IMPACT OF RERA ON THE BUYERS

RERA has been introduced mainly to protect the interest of property buyers. In order to
increase transparency regarding project completion status, it mandates developers to disclose
the construction status on the Authority website. This has to be done on quarterly basis. In
case of any misdoing by the developer, the buyer can file a complaint with the Authority.
Their complaints are mandated to be resolved within 120 days. Finally, builders cannot
change any aspect of the structure without prior approval from all the buyers. All these
measures, in addition to those mentioned the above section, are expected to boost investor
confidence. The amount of unsold inventory in cities is likely to go down with RERA
implementation.

5. IMPACT OF RERA ON AGENTS AND BROKERS

Traditionally, the Indian real estate agents have been an unorganized segment of this sector.
However, the new legislation makes it mandatory for the brokers to register themselves to
facilitate a transaction. According to an estimate, there are 5,00,000-9,00,000 agents in India
which has unorganized and unregulated affair. Under RERA, brokers will no longer be able
to sell properties unregistered with the Authority. They will also be penalized in case of
wrong information given to buyers regarding the property. However, the fear among industry
players is that many unorganized brokers will find themselves out of work. Agents need to
pay a fee in order to register themselves. Moreover, in case of builders flouting on their
promises, agents will be penalized. Citing issues of lack of faith on builders and lack of
benefits for agents under RERA, many agents will choose to shut shop. 13

6. IMPACT OF RERA ON REAL ESTATE INDUSTRY

Initially, a lot of work is to be done to get the existing and new project registered. Details
such as status of each project executed in last 5 years, promoter details, detailed execution
plans, etc., needs to be prepared.

With the advent of RERA, specialised forums such as the State Real Estate Regulatory
Authority and the Real Estate Appellate Tribunal, will be established for the resolution of
disputes pertaining to home buying and the aggrieved party will have no recourse to other
consumer forums and civil courts, on such matters. While the RERA sets the groundwork for
fast-tracking dispute resolution, the litmus test for its success, will depend on the timely
setting up of these new dispute resolution bodies and how these disputes are resolved
expeditiously with a degree of finality.14

7. MACRO-ECONOMIC IMPACT OF RERA

➢ The Real Estate sector continues to play a key role in contributing to India's
economic growth story and is one of the largest sources of job creation, making it a
strategic sector for nation-building. RERA's aim to promote higher transparency,
accountability and to safeguard homebuyers' interests brought in a new era in the real
estate sector and led to a turnaround in home sales. Despite being in the nascent
stage, it is encouraging to note that we have witnessed a decline in some of the
common complaints such as delay in deliveries, false promotions and incorrect
charges for excess areas etc.15
➢ The RERA move coupled with Goods and Services Tax implementation is seen as a
positive move for the sector. The main issues plaguing real estate in India were
transparency and accountability, which have been tackled now. Such has been the

13

https://www.academia.edu/37100463/Impact_of_Real_Estate_Regulation_and_Development_Act_RERA_on_
Indias_Real_Estate_Sector.
14
https://housing.com/news/rera-will-impact-real-estate-industry/.
15
https://www.businesstoday.in/opinion/columns/two-years-of-rera-review-and-the-outlook-
goingahead/story/343874.html.
 impact of RERA that when the website was launched in Uttar Pradesh state, 15000
complaints were registered in a single day from Noida region alone. 16
➢ According to the World Bank's Ease of Doing Business Index, India has significantly
improved its global ranking for dealing with construction permits from 182nd to 52nd
in a span of four years supported by a steady decline in days required and processes
required for such permits. This can be improved further by closing some of these last
mile gaps in implementing RERA.17
➢ Over the last two years, RERA regulatory authority has strived to develop processes
to make registered developers compliant with the requirements. This is starting to
show early results and buyers and financiers are more confident about their
investment decisions today than they were two years ago. Rising confidence will spur
home demand in the days to come and developers are realising this fast. In fact,
developers are now viewing the RERA registration tag as a branding tool and
proactively registering their projects to attract buyers and flexible financing facilities.
This arrangement is leading to a win-win situation for all the stakeholders.18
➢ “The implementation of the Act, in its entirety, will have a far-reaching impact on the
real estate sector. The Act will be a game changer for the entire sector and will
transform the entire paradigm in which the sector operates and the manner in which
different stakeholders interact with each other. Implementation of the provisions of
the Act will cause some teething troubles in the short term but in the long run, the
sector will stand to gain. The Act will require developers to recalibrate their business
model so that it complies with the various provisions of the Act. Participation from
homebuyers will galvanise the fortunes of the sector and help the cash-strapped
developers. The confidence flowing into the sector, from the provisions of the Act,
will also rub off on institutional funds and banks, thus enabling them to lend to the
sector. The access to funds at competitive rates, which in the present day are pretty
high, could lead to rationalisation of prices within the sector thereby making it a win-
win situation for all the stakeholders. Most importantly, the Act will ensure that only
serious and strong players remain within the sector. Therefore, going forward, a
16

https://www.academia.edu/37100463/Impact_of_Real_Estate_Regulation_and_Development_Act_RERA_on_
Indias_Real_Estate_Sector.
17
https://www.businesstoday.in/opinion/columns/two-years-of-rera-review-and-the-outlook-
goingahead/story/343874.html.
18
https://www.businesstoday.in/opinion/columns/two-years-of-rera-review-and-the-outlook-
goingahead/story/343874.html.
 consolidation among players within the sector cannot be ruled out. The success of the
new rules of the game will however, lie in having the necessary systems and
processes across states so that the act can be implemented in full letter and spirit
without causing much distress among the relevant stakeholders.”19
➢ Too little time has passed since GST’s implementation to accurately determine the
new tax regime's impact on the sector. That said, the combination of both GST and
RERA has created some short-term uncertainty. However, we believe both will help
strengthen the demand environment going forward. GST is likely to provide a
significant boost to economic growth and RERA will increase consumer confidence.
That combination is likely to be very positive for the real estate sector.20

ADVANTAGES OF RERA

3. Timely delivery of flats: Developers often make false promises about the completion
date of the project, but hardly ever deliver. As per the Act, strict regulations will be
enforced on builders to ensure that construction runs on time and flats are delivered
on schedule to the buyer. If the builder is not able to deliver the flats on time, he/she
will have to refund the purchaser with interest.
4. Furnishing of accurate project details: In the construction stage, builders promote
their projects defining the various amenities and features that will be part of the
project. But not everything goes as per plan, with several features missing. As per this
act, there can't be any changes to a plan. And if a builder is found guilty of this,
he/she will be penalized 10% of the project’s costs or face jail time of up to three
years.
5. Specifying carpet area: Generally, builders sell flats on the basis of built-in area,
which includes a common passage area, stairs and other spaces which are 20-30%
more than the actual flat’s area. But not all buyers are aware of the concept of carpet
area. With this bill it will become mandatory to declare the actual carpet area.
6. All clearances are mandatory before beginning a project: Builders often attract
buyers with huge discounts and pre-launch offers. And, the buyer, enticed by the
offers, does not bother about the clearance. But, due to delays in getting clearance,

19
http://www.iraj.in/journal/journal_file/journal_pdf/14-504-154295508593-99.pdf.
20
https://www.mydigitalfc.com/fc-supplements/build/gst-rera-trigger-realty-growth.
 the buyer does not get the flat on time. This act ensures that developers get all the
clearances before selling flats.
7. Each project should have a separate bank account: Developers raise funds
through pre-launch offers and use them to purchase some other land or invest it in
other projects. This act makes it compulsory that a separate bank account be
maintained for each project. Each transaction will have to be recorded, and diversion
to another project will not be entertained.
8. After sales service: If the buyer finds any structural deficiency in the development of
the building, the buyer can contact the builder for after sales service. But the buyer
should approach the builder within a year of purchase to rectify such defects without
further charges.

DISADVANTAGES OF RERA

1. Past real estate projects not included: Only new projects are covered; Projects that
are ongoing, completed or stuck due to clearance or financial issues, don’t come
under this. Hence, many buyers will not be benefitted by it.
2. Delay from government agencies: There can be delays caused by the government,
which sometimes takes a lot of time to clear a project. It is up to government bodies
to follow strict time frames to approve projects, so that developers can launch,
complete and deliver them on time.
3. No compulsory regulation for projects less than 1000 square meter: Registration
with the regulator will not be mandatory for projects less than 1000 square meter. So,
small developers will not be bound to register.
New project launches expected to be delayed: Because a project will not be allowed to
launch without the requisite clearances from the government (which generally takes two to
three years), projects will automatically get delayed.21

21

https://www.academia.edu/37100463/Impact_of_Real_Estate_Regulation_and_Development_Act_RERA_on_
Indias_Real_Estate_Sector.
 CONCLUSION

The past few decades have seen increasing attention given towards constructive urbanization
process in the context of rapid transformative process of country. As the nation strive to
enhance capacity to cope up with developmental needs through the urbanization.

In country like India, a standardized Real Estate Regulation Act is necessary to have
uniform standards throughout the country and to bring transparency in transactions. The
implementation of an act like RERA is a firm step in the right direction to bring awareness in
terms of customers, promoters, builders etc. In future, in the lines of RERA, modernization
of land records, land acquisition and GST can also be put on priority for growth of real estate
sector. It is made compulsory for the various stake holders like builders, promoters, agents
and allottees are to be complied with specification of the projects, project agreements and
regulatory frameworks. It is also to be noted that the real estate entities must ensure that the
properties of allottees are well maintained and that residents are satisfied with the conditions
of the properties. The RERA is significant move in this regard to ensure greater
accountability of the real estate builders and agents towards customers as well as
government.

The RERA is committed towards the successful and effective implementation of the real
estate law of the country and has taken relevant and consistent measures for the progressive
development of the sector in the country. To encourage sustainable development of the
RERA, along with customer friendly environment, various policy measures incorporated
under the RERA would certainly bring remarkable changes in the economic and social
transformation.22

It is not surprising that in its first two years of operation, RERA has witnessed wholehearted
participation from major Indian states. According to the latest data available, out of 36
Indian states and Union Territories, general rules of RERA were notified in 30 states, web
portals were set up in 23 states and permanent regulatory authority was established in 20
states. Though there is a long way to go, it is a remarkable feat to receive acceptance,
especially, since there were several apprehensions during the formation of the act that took
close to 10 years of deliberations.

22
http://researchersworld.com/ijms/vol5/issue4_8/Paper_10.pdf.
RERA's future success will depend on its effective and uniform implementation across India.
A uniformly regulated environment will instil trust and strengthen business conditions.

Also, in our opinion one area of improvement that can help the act to become more relevant
is by enhancing the rights of the RERA regulatory authority. It should be empowered to
exercise its power over all stakeholders including government agencies and authorities
responsible for approvals/certificates etc. In fact, pursuant to RERA objectives, all state
governments should develop a single window for registration and processing of applications
related to this act. This window's performance should be monitored under RERA. Fast-
tracking the decision-making process will further expedite project completion timeline as
envisaged by RERA.

Finally, there appears to be a lack of awareness amongst real estate agents who play a vital
role in the promotion of the sector and spreading awareness among buyers. For example, out
of approximately 1 lakh agents in Maharashtra, only about 20,000 have been registered
under RERA. Hence, it is necessary to educate this group of participants in order to prevent
instances of mis-selling or fraudulent transactions.

To conclude, RERA has brought about a significant amount of standardisation in real estate.
In the coming days, a refined and efficient implementation across the country would promote
a more equitable and fair transaction between the buyer, developer and financier by fostering
high levels of transparency and trust amongst each other.23 The Act is a positive change in
terms increasing accountability of the promoters and developers and establishing efficient
forums for grievance redress. This will consequently lead to lower litigation due to stringent
rules and regulations in the highly corrupt sector.24

23
https://www.businesstoday.in/opinion/columns/two-years-of-rera-review-and-the-outlook-
goingahead/story/343874.html.
24

https://www.academia.edu/37100463/Impact_of_Real_Estate_Regulation_and_Development_Act_RERA_on_
Indias_Real_Estate_Sector.