RERA gives more power to the startups

The Real Estate (Regulation & Development) Act, 2016 (RERA) which became effective from May 1, 2017 is introduced to boost consumer confidence in real estate sector. This move would come on the back of making developers and builders’ community along with brokers and agents more accountable for marketing and delivering a project in time as promised. The objective is to bring in more transparency into the system which in turn would boost the trust quotient between buyer and seller.

Until now the brokers’ community, who played a pivotal role in closing a deal, was never administered. But with the introduction of RERA, they come under the ambit of this regulatory body directly. The real estate sector which is largely a seller’s market will now see more professionalism.

This is how RERA is helping real estate sector and the related startups.

Accountability

No more false promises. The developers have to stick to the committed timeline while selling their properties. Likewise, brokers will have to register themselves with the state-level RERA authority and obtain license. Moreover, to maintain such license, they have to undergo certain courses. The unorganised sector will now have some shape, size and colour.

Transparency and Trust

Online facilities are being provided to the developers and brokers for registration. Even consumers can file their complaints online. Tracking of complaint redressals can be done online and through SMS. A builder has to file all documents related to his project. This would bring in more transparency and add consumer trust into the system. It’s mandatory for the developers to submit information update of their ongoing projects along with photographs, once in three months – this gets uploaded on the authority’s webpage.

Central Advisory Council

RERA has made the property brokers and agents a part of the Central Advisory Council. This will help the government to remain updated with the concerns of the real estate sector. By making brokers and agents the stakeholders of the council, it gives them an opportunity to build rapport with the developers and builders. Also they can voice their concern with ease.

Customer Centricity

RERA has given more power to the customer. It has made developers and brokers liable for any sales they do, if found guilty, strict action will be taken on them. With strict norms in place like – sales based on carpet area only, pre-sales restrictions, restrictions on sale of open car parking etc will help the customers. All marketing collaterals should be RERA compliant and the developers shouldn’t bluff the customers. Developers are also liable to carry on repair works of structural defects for five years.

RERA however has some challenges as well. Builders find it difficult to bring their under-construction projects under the ambit of RERA. Moreover, these stringent rules will affect small-time builders a lot and they finally have to take the corporatisation route to remain in the market. With sole right in the hands of regulatory, the unscrupulous builders and brokers will be eliminated out of the system. Real Estate sector will undergo some changes with consolidation in the market place.

Do you think RERA could actually impact the startup ecosystem? Do share your views.