Real Estate Regulations in India: Navigating RERA and Beyond
The Indian real estate sector has seen tremendous transformation over the past decade—largely due to increased regulation, technological disruption, and a changing buyer mindset. Among these, the Real Estate (Regulation and Development) Act, 2016 (RERA) has been a game-changer in bringing accountability and transparency.
Why RERA Was Needed
Prior to RERA, the Indian real estate market was marred by frequent delays, unregulated developers, and little legal recourse for buyers. RERA was introduced to restore trust by making real estate transactions more buyer-centric.
Key Benefits of RERA
- Transparency: Builders must register projects and disclose timelines, layouts, and legal status before advertising or selling.
- Grievance Redressal: The act mandates the creation of a regulatory authority in each state and appellate tribunals for faster dispute resolution.
- Financial Discipline: Developers are required to keep 70% of buyer funds in an escrow account, ensuring that money is used for project construction only.
Challenges in Implementation
- Delayed Enforcement: As of 2024, some states like West Bengal and parts of the Northeast still have limited RERA functioning.
- Slow Judicial Processes: Though RERA tribunals are faster than courts, they are still under-resourced.
Complementary Policies
- GST Reforms: GST streamlined taxes on construction but still causes confusion over input tax credit (ITC) claims.
- Benami Transactions Act & Demonetization: These measures aimed to reduce black money in real estate transactions, though their impact has been mixed.
- Introduction of REITs: SEBI-approved REITs have democratized investment in commercial real estate and added a layer of accountability through public disclosures.
Voices from the Industry
- Niranjan Hiranandani, MD of Hiranandani Group, says: “RERA has restored buyer confidence, but we need smoother single-window clearances to fully transform the sector.”
- Amit Goyal, CEO of India Sotheby’s International Realty, highlights: “Regulatory reforms have made Indian real estate more attractive to foreign institutional investors.”
While RERA has helped clean up a largely opaque industry, more needs to be done to build a fully transparent, investor- and buyer-friendly ecosystem. Technology, judicial reform, and stronger execution at the state level are the next frontiers.
Comments are closed
