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RERA stands for Real Estate Regulatory Act, an Act implemented to regulate the real estate sector in India. The Real Estate (Regulation and Development) Act, 2016 (RERA) is an Act passed by the Indian Parliament. The RERA seeks to protect the interests of home buyers and also boost investments in the real estate sector. The Rajya Sabha passed the RERA bill on March 10, 2016, followed by the Lok Sabha on March 15, 2016 and it came into force from May 1, 2016.
RERA provides transparence and effectiveness of legal framework, when everyone involved in the property market can conduct a business. In this concept RERA aims to develop an online society for investors, developers and buyers, as well as for supporting sectors (banks, law firm and insurance companies) could cooperate with each other and with RERA.
The Real Estate (Regulation and Development) Act, 2016 (RERA), intends to protect the interests of home buyers and enhance transparency in the real estate sector. We examine how it will affect various stakeholders from home buyers and builders, to brokers and the provisions and penalties prescribed under the act.
For long, home buyers have complained that real estate transactions were lopsided and heavily in favour of the developers. RERA and the government’s model code, aim to create a more equitable and fair transaction between the seller and the buyer of properties, especially in the primary market. RERA, it is hoped, will make real estate purchase simpler, by bringing in better accountability and transparency, provided that states do not dilute the provisions and the spirit of the central act.
The RERA will give the Indian real estate industry its first regulator. The Real Estate Act makes it mandatory for each state and union territory, to form its own regulator and frame the rules that will govern the functioning of the regulator.