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RERA Implementation: Real Estate Regulation Act 2016

UPSC / SSC current affairs note · Polity

PolityEconomy

Why in news

The Ministry of Housing and Urban Affairs informed Lok Sabha about the implementation of RERA, including measures to address registration challenges and ensure effective enforcement. The Act aims to protect homebuyers and promote transparency in the real estate sector.

Background

RERA was enacted in 2016 under the Concurrent List (Entries 6, 7, 46) to regulate contractual relationships between homebuyers and promoters, as land is a state subject under Entry 18 of the State List.

Key facts

in5points

  1. RERA mandates registration of any real estate project with the Regulatory Authority before advertising, marketing, booking, or sale.

  2. Violation of registration requirement can lead to a penalty of up to 10% of the estimated project cost.

  3. Promoters must disclose all project details and approvals, and deposit 70% of funds from homebuyers in a separate bank account for land and construction costs.

  4. RERA provides a fast-track dispute resolution mechanism with a 60-day timeline for case disposal.

  5. Under Section 40, interest, penalty, or compensation due from a promoter can be recovered as arrears of land revenue.

  6. Section 41 establishes the Central Advisory Council (CAC) chaired by the Minister of Housing and Urban Affairs to advise on implementation and homebuyer protection.

  7. A committee was formed to recommend measures for effective RERA implementation and registration of eligible projects.

  8. The Ministry regularly engages with state governments to strengthen regulatory authorities' autonomy and staffing.

Prelims pointers

  • RERA: Real Estate (Regulation and Development) Act, 2016
  • Constitutional basis: Concurrent List entries 6, 7, 46
  • Land: State List entry 18
  • Central Advisory Council (CAC) under Section 41
  • Penalty: up to 10% of project cost for non-registration
  • 70% of buyer funds in separate bank account
  • 60-day timeline for dispute resolution
  • Section 40: recovery as land revenue arrears
  • Ministry: Housing and Urban Affairs
  • Enacted: 2016

Mains angles

  • Discuss the effectiveness of RERA in protecting homebuyers and ensuring transparency in the real estate sector.
  • Critically examine the challenges in implementing RERA across states and the role of the Central Advisory Council.
  • Analyze the constitutional basis of RERA and the balance between state and central powers in regulating real estate.