The real estate industry is on a transitional period, and much of that transition is proving to be a boon for prospective home buyers. One big reason for this transition is the release of the reformed Real Estate Regulatory Authority (RERA) Bill. The RERA Bill has introduced a number changes to the way real estate businesses are handled between buyer and seller. This can speed up the process of buying your home. From this year and the years to follow, investing in residential real estate will prove to be your best bet, but to take full advantage of the many RERA reforms, you need to understand it better. Here’s a quick look at how the RERA Bill will change the real estate market in India.

Reason for the RERA Bill

The rea estate industry is one of the biggest money churners in the country. Owing to the large sums of money that are transacted over every purchased or rented living space, and the introduction of a digital economy, the Government wished to impose a new law that made such transactions more transparent and less fraudulent.

Developers are now expected to notify their local RERA bodies every time they start a new project (exceeding a surface area of 500 square metres). Each project will be registered under RERA and be given a unique ID and password through which the developer must conduct other legal operations pertaining to the construction of the project. A registration number is generated for that project, which must be quoted to every prospective buyer.

Here are some of the ways the RERA Bill will change real estate market.

Projects will be completed faster

Completion and handover of projects is a promise every developer makes to prospective buyers, yet due to unforeseen circumstances, the project may be delayed. This delay can prove to be a hindrance to buyers who wish to settle in to their new home quickly. The RERA Bill has enforced a rule stating that projects must stick to their completion deadlines, while also ensuring timely handover by making developers set up individual bank accounts for each project. Developers are asked to deposit 70% of the funds they receive on a particular project, thus preventing them from using said funds for other projects. The penalty for delay in completion is payment of pre-EMI charges to the bank from the developer- a charge that was previously burdened on the home buyer.

Realtors have an important role

There are still many home buyers who depend on the services of realtors for choosing the right home. The RERA Bill shows promising signs for such home buyers as it is now mandatory for realtors to be registered with their local RERA bodies before they broker deals between a developer and a buyer. The registration is fairly similar to that of a developer registering on RERA. The trust factor is increased immensely between all three parties, as the home in question will also be registered under RERA.

Better quality constructions

Developers will have a bigger reason to perfect their projects now that RERA is in effect. The completion has always been stiff in the real estate marketplace, and it is now going to get tougher with more developers coming in who boast of complete RERA compliance. RERA has given a five-year timeline for developers to fix and repair any deformities that could occur post completion of their projects, which could indirectly prompt developers to rethink their standards of construction and improve the overall quality of their projects.

Residential project prices may change

Real estate is one of the most expensive investments a person can make, so there were concerns in the past among many home buyers over the pricing of residential properties. Post RERA, the tables have turned in favour of the buyer, as developers now have to quote prices based on the carpet area (personal living space) rather than the super built up area (total compound space). This change in pricing may affect the overall cost of the residential property. The RERA Bill along with the PMAY scheme implemented by the government will go a long way in making real estate more affordable.

The RERA Bill has paved the way for a brighter future in real estate. While the reforms may seem particularly new to modern consumers and new –age developers, reputed and long-standing real estate companies like Lancor have been implementing high standards of residential development for decades.