The Real Estate (Regulation and Development) Act, commonly known as RERA, was passed by the Indian Parliament in 2016 with the objective of regulating the real estate sector, promoting transparency, accountability, and protecting the interests of home buyers. The Maharashtra Real Estate Regulatory Authority (MahaRERA) is the regulatory body established under the RERA Act for the state of Maharashtra.
The importance of RERA and MahaRERA in India and Maharashtra, respectively, in the real estate sector can be summarized as follows:
- Transparency and Accountability: RERA and MahaRERA require developers to register their projects, provide accurate and complete information about the project, and adhere to strict timelines. This promotes transparency in the real estate sector, reduces information asymmetry between developers and home buyers, and holds developers accountable for delivering projects on time.
- Protection of Homebuyers: RERA and MahaRERA mandate that developers must deposit 70% of the funds collected from homebuyers in an escrow account to ensure that the funds are used only for construction and development purposes. This protects homebuyers from unscrupulous developers who may divert funds collected for one project to another project or purpose.
- Grievance Redressal: RERA and MahaRERA have established mechanisms for redressal of grievances and disputes between developers and homebuyers. This includes the provision for setting up of a Real Estate Regulatory Authority in each state and the establishment of an appellate tribunal to hear appeals against the decisions of the regulatory authority.
- Promotion of Timely Completion of Projects: RERA and MahaRERA have mandated that developers must adhere to strict timelines for completion of projects and have also provided penalties for non-compliance. This promotes timely completion of projects, reduces the risk of project delays and cost overruns, and helps developers maintain their credibility with homebuyers.
Overall, the RERA Act and MahaRERA have brought much-needed transparency, accountability, and regulation to the real estate sector in India and Maharashtra, respectively. They have significantly improved the functioning of the sector and provided a level playing field for both developers and homebuyers.
