October 20 To October 26, 2018 u Taxmann’s Corporate Professionals Today u Vol. 43 u (^25383)
The Real Estate (Regulation and Development) Act, 2016 is an Act
of the Parliament of India which seeks to protect home-buyers as well
as help boost investments in the real estate industry. The RERA is
enacted to provide for establishment of the ‘Real Estate Regulation
and Development Authority’ for regulation and promotion of real
estate sector and to ensure sale of plot, apartment or building, as
the case may be, in an efficient and transparent manner. The object
of the RERA is stated to be to protect the interests of consumers
in the real estate sector. Thus, the RERA is brought on Statute
Book to ensure greater accountability towards the consumers and
significantly reduce frauds and delays and also the current high
transaction costs. It attempts to balance the interests of consumers
and promoters, by imposing certain responsibilities on both. It seeks
to establish symmetry of information between the promoter and
purchaser, transparency of contractual conditions and set minimum
standards of accountability and a fast track dispute resolution
mechanism. The RERA, as stated in its ‘Objects and Reasons’, was
enacted for inducting professionalism and standardization in the
sector, thus, paving the way for accelerated growth and investments
in the long run.
Introduction
- The real estate sector in India has witnessed several changes
since the Indian economic growth picked up pace in early
2000’s. Further, migration into urban centers, increase in
disposable incomes and foreign investments drove demand
for all forms of real estate in the country. Another emerging
trend that has been witnessed is that the average age of
home buyers has seen a reduction and use of mortgage for
purchase of property has been on the rise. In commercial real
estate segment, several foreign investors have been acquiring
significant stakes in Indian office complexes including SEZs.
While as the real estate sector continues to grow, the need for
reforms and institutionalisation was being felt for long. This
was propelled by increased litigations and consumer discontent
with the practices prevalent across the industry. The need for
m. abhijnan
Lawyer (Real Estate)
kochhar & Co.
Applicability of RERA Act on Long Term Lease