RERA Impact: Temporary Slow-Down for the Launch of New Residential Projects in Maharashtra

Real estate industry in India is going through a phase of massive upgradation, post government declaration to set RERA (Real Estate Regulatory Authority) Act, which is mandatory for all residential and commercial projects consisting of eight apartments or where the land is over 500 square metres, to register with RERA for launching a project, so that greater transparency can be provided in project-marketing and execution.

The act is about to bring in a new era in the real estate industry of India. Some of the key features are:

Earlier, the total cost of the property was charged on the build-up area or for some instances the super build-up area as well. But from now onwards, the total cost of the property will only be charged upon the carpet area only, of the unit.

Till the time the developers do not register their projects with the regulatory authority, they will not be able to advertise, offer, sell, market or book any plot, house, building, apartment nor can make any investment in projects. All advertisements and promotional initiatives should bear the unique RERA registration number.

The major concerns like price, extension of possession dates, quality of construction etc are going to get resolved by this regulation. Any changes in the above areas were buyer’s concern earlier, but from now onwards these details are going to be handled by the builders.

The builders need to submit approved plans for their every ongoing project. Any alterations in the plan will need an approval from authorized body.

RERA makes it mandatory that the builder can only request 10 percent of the total cost as the booking amount.

With all the clauses RERA has introduced, developers have been cautious before launching any new project, in Maharashtra. As per a recent survey report, the state has gone through fewer launches in the first quarter of the financial year, as compared to the similar period of last year. The real estate industry in Maharashtra, now has reported to be going through an era that is "RERA Affected".

As per the RERA rules, the builder has to go through approval by the regulatory authority, for every new launch. Sources says that, the industry has taken a back seat, since the builders may take some time to get accustomed, with new rules and regulations. However, according to government declarations, there will be no extension for registration of properties post July 31.

According to the current scenario, the problem highlighted by the regulatory authority that the developers has been hesitating in RERA registration, as the entire information is going to be available in public domain, affecting new launches and slowing down the real estate domain of the state.

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