Real Estate (Regulation and Development) Act, 2016 (RERA) and its Potential Implications

Abstract

Accountability and transparency are two thrust areas of Real Estate (Regulation and Development) Act, 2016 (RERA), and builders will have to ensure compliance to avoid punishments. The Act provides for penalty as well as imprisonment. Builders need to have trustworthy credentials to start a project and it will be monitored during the registration of the project with the state authority. During registration information about clearances, annual report, balance sheet, cash flow statement and auditor's report need to be provided. The legal title deed and ownership documents are also necessary. To increase transparency, carpet area has to be defined and Timely completion of project is a must, failing which buyers will have to be compensated with an interest rate of State Bank of India's highest marginal cost of lending rate plus two per cent, within 45 days of it becoming due.