Real Estate is booming across the globe and the Indian market has always seen a steady flow of Non-Resident Indians investing in property back home in India. The passing of the Real Estate (Regulation And Development) Act, 2016 and the subsequent formation of the Real Estate Regulatory Authority (RERA) has been a blessing in disguise for the NRI investor seeking to buy property in India.
RERA remedies the largely unregulated real estate sector of India and protects the consumer through regimented and documented laws put in place. The Real Estate Act was passed by the Indian Parliament on March 25, 2016 and a regulatory board was established to carry out its functions in the name of Real Estate Regulatory Authority. It is aimed at bringing transparency and accountability to the sector from 1st of May 2017, across India though there are significant hurdles in implementing the law.
The primary benefits come in the form of transparency, accountability, timeliness and regulated system of operation.
Transparency – RERA makes it mandatory for every state and union territory to have online registrations. This makes it very convenient for the out-of-state buyer to scout and buy properties, and as plan layouts and documents are uploaded on the site they can track the developments of the projects from anywhere in the world.
Timeliness – Taking possession of a new property can unduly delayed due to various reasons. However, with RERA in place, the builders and agents will have to register themselves with the regulator and get all projects with more than eight apartments registered before launch. This means all sales will be finalized without any delays and within the time stipulated.
Accountability – Financial disclosures that include 70% of finances kept aside for building purposes in escrow accounts allow the NRI buyer peace of mind that his funds are utilized appropriately. He is able to keep tabs on whether the money is being withdrawn as per the stages of construction, approved by engineers and chartered accountants of builders thereby, preventing the use of money raised for one project for any other project.
Regulated System – RERA has made the entire process of purchasing and documentation very straight-forward. The buyer will pay only for the carpet space and cannot charge for the super built-up area like balconies and common spaces across the floor.
He is also accountable to provide for any structural defect in the building for the first five years at no cost to the buyer. For a NRI who may not be able to travel across periodically to India, this is an enormous relief if he sees his new property only after a couple of years of possession and finds a defect.
Grievance redressal – With long distances between the NRI and India, it gets harder for the buyer to approach the developers regarding legitimate concerns. RERA acts as an official authority to address their grievances and complaints pertaining to their real estate investments and acts as a liaison between the NRI and the developer in a quick, efficient manner.
RERA protects the interests of the NRI consumer by helping develop a strong, reliable relationship between the buyer and seller of real estate property. By making it easy and straightforward RERA is encouraging more real estate investments across India and supporting its booming economy.
Many states are far from ready with the infrastructure and resources to implement it while most builders and real estate agents are still trying to understand the regulations and are in the early stages of preparing themselves to comply with the new Real Estate (Regulation and Development) Act (RERA) 2016. RERA compliant real estate industry, aims to protect and benefit the buyer/investor including Non-Resident Indians.