The real estate business involves the participation of a lot of people. Every year a large number of real estate brokers and agents are being held for working against the interest of the client. So to prevent people from being cheated or swindled and to protect their rights, and interest in investment activities, the Government of India came up with the Real Estate Development Act, RERA which was passed in the Parliament in the year 2016. The main motive of the act is to protect the rights and interest of the parties in the real estate business and to offer them a proper platform to seek redressal.
Things that you should know about RERA:
- The bill was actually passed in the Parliament during the reign of Congress government in the year 2013. However, the act was cleared and came into effect only in the year 2017, almost four years later.
- The Government of India has made it mandatory for the builders who are developing properties in more than 500 square meters to register under the RERA act, 2016
- Violators of the law will be penalized up to 10% of the project cost and can be sentenced to imprisonment up to a maximum period of 3 years.
- As per the law, real estate tribunals have to be set up in every state. However so far only 13 states out of the 32states and the union territories have notified the rules, while others are still under the governance of the Housing Ministry.
- This act also focuses on increasing the scope and availability of more housing units, which is expected to stabilize housing prices.
- Though the act talks about the relief measures in general, its primary focus is on the buyers. Though in most of the cases the buyer’s interest is affected a buyer may not always be the victim.
The Situation in US and UK:
As far as the United States is concerned there no centralized regulatory body. However, there are series of bodies that regulate the different ownership and usage aspects to protect the rights of the end-users. The US department of housing and urban development (HUD) has a set of rules and regulations that parties to the real estate business have to follow, along with the procedures pertaining to sale and purchase of real estate properties.
In UK there is not any regulatory body to govern real estate business. However, the UK government has taken steps to protect the rights of the investors and end-users. The Financial Services Authority (FSA), which is now a part of the Bank of England and The Property Misdescriptions Act, 1991 are the ones that take care of the rules and regulations in real estate business in the UK.