SLATE. All you wanted to know about: Real Estate Regulatory Authority

Ever wondered why shares, mutual funds and deposits are so tightly regulated, but there seem to be no regulations for the biggest investment decision you’ll ever make — buying a home? With the Rajya Sabha passing the Real Estate (Regulation and Development) Bill last week, your property transactions will now be subject to a regulator — the Real Estate Regulatory Authority (RERA) in your State.

RERAs are intended to perform the same role for your property transactions as the SEBIdoes for security transactions in the capital markets.

Today, real estate buyers have only the brochures or ads in newspapers to go by while making property investment decisions. But with the implementation of this Act and the establishment of State-level RERAs, every developer launching any residential project with area of over 500 square metres or eight apartments, has to register it with RERA and upload all the project details to the RERA site before he initiates any sale.

The details uploaded by the developer must include the number and types of homes for sale, site and layout, payment schedules, schedule of completion and quarterly updates on the status of the project too.

Thus, RERA maintains comprehensive records for every project across the entire chain, from the conceptualisation of the project to its completion. Each State will also have an Appellate Tribunal to adjudicate and deal with real estate disputes. RERA is a gift for the public, who earlier had to approach the Courts for such disputes.

Retail property buyers have often been the ones to bear the brunt when real estate transactions go awry. If there are delays in construction, the promised property gets locked in legal disputes or the developer changes the layout or building plans after purchase, it was up to the buyer to make compromises. It was also not unusual for developers to divert monies received towards one project to more lucrative ones, leaving buyers in the lurch.

This Act requires developers to deposit 70 per cent of the sums received from buyers, in a separate bank account earmarked for each project. In case the builder would like to change the layout or plans after the sale, he will need the approval of two-thirds of the buyers in that project, to make such tweaks.

Both the buyer and the promoter have to pay penal interest at similar rates, for missed payment obligations or delayed completion. Imposition of heavy penalties and cancellation of developer registration are also provided for in the Act, where a developer violates rules. In case developers renege on any of their commitments, buyers can complain to the RERAs for redress.

RERA offers a single window for you to check out the complete credentials of any new real estate project that you propose to buy, thus reducing doubts and uncertainty relating to the purchase, as all the builders, promoters and agents are to be registered with RERA. Standardised terms and the speedy dispute resolution mechanism should result in a process where the buyer can hope to get his apartments with least delay and minimal confusion.

RERAs will go a long away in revitalizing consumer confidence in the over-supplied and over-priced real estate market. Better late than never.

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