Real estate is one of the most risky as well as sensitive business that involves property. A minor change in a country can bring turmoil in the complete estate world. And with the implementation of RERA the real estate world has gone under a serious impact. RERA is referred to as the Real Estate Regulatory Act which was enacted effectively from 26th March 2016. The impact is positive or negative let’s have a closer look on this affair to get to know about its outcomes as well as the impact of its implementation.
RERA is an act which is forcing the stockholders in the real estate market to give the right of transparency to the buyers. It is also making the real estate business more of a process driven case. This act was made applicable keeping the interests of the buyers in mind. According to the government this act will bring more accountability and a lot transparency between the seller and buyer in the real estate markets. Now looking towards its impact on the business, they are as follow:
- Giving some power in the hands of the buyer the act says that, it is the builder who will be 100% responsible for any defect that a building sustains till 5 years from the day the keys are handed over. But there is still a quest going on where the builders are asking for specific defects that will be included under the RERA act. Moreover, if we are looking at the positive side of this act then it is also forcing the builders to use good materials and make long lasting buildings.
- The act has given leverage to the builders that if at all they want they can transfer the burden of project completion to the contractor or the third party. This will make the damage clause more effective for the builders. It will also cement time to the non-completion of the project.
- Previously what used to happen was the risk that contractors had. They had a tendency to encumbrance a few major factors that included sanctioning of the project, the litigation of the land, and other things connected to it. But now according to RERA this scenario will not be there in picture as all the sanctioning will be done before the project will start. So it will reduce this risk of time loss and money loss in sanctioning the project.
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- One of the most important things to note is that there are many developers in the real estate who have stopped or postponed their projects. They are waiting for the best time when they could restart it. They are wanting to understand the full impact of the act and want to know that will be profitable for them in any way or not. They are only focusing on the on-going projects.
The small size companies and the start-ups are facing a lot of problems in raising funds due to this act. But nevertheless there will be answers that will be delivered once the act gets clear in front of the businessmen.
So, it is really hard to tell that will RERA pose problems or will turn out to be a boon for the real estate people.