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File: Rera Act Pdf 95091 | Work Sheet 6 Rera
1 newspaper analysis programetm worksheet 6 upsc ptcummains 2020 rera act real estate regulation act rera newspaper analysis programme work sheet part 6 copyright aspire ias all rights are reserved ...

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            Newspaper Analysis ProgrameTM  
                WORKSHEeT -6 (UPSC PTcumMAINS-2020) 
                                                        (RERA ACT) 
             
                                                                                 
                                                                                 
                                                                                 
                                                                                 
                                                                                 
                                                                                 
                                                                             
                                                                                 
                                                                                 
                                                                                 
                                                                                 
             Real Estate Regulation 
                                                                                 
                                            Act (RERA) 
            
            
            
            
            
             NEWSPAPER ANALYSIS PROGRAMME – 
                                                      WORK-SHEET 
                                                               Part - 6 
                                  Copyright © Aspire IAS      All rights are reserved. No part of this document may 
                                  be reproduced, stored in a retrieval system or transmitted in any form or by any     
                                  means, electronic, mechanical, photocopying, recording or otherwise, without         
                                  prior permission of Aspire lAS.                                                      
                                                                                                                       
                                                                                                                                              
                                                              2 
                                                                                                              
           Newspaper Analysis ProgrameTM  
              WORKSHEeT -6 (UPSC PTcumMAINS-2020) 
                                                (RERA ACT) 
         
        The Real Estate (Regulation and Development)                      seeks to empower and protect property 
        Act, 2016 came into force on May 1, 2016. The                     consumers and make transactions fair and 
        Central and state governments are liable to notify                transparent. 
        the Rules under the Act within a statutory period              •  The RERA Act was enacted under Entry 6 
        of six months.                                                    and 7 (dealing with contracts and the 
        Land, Rights over Land, Land Improvements –                       transfer of property) of the Concurrent List 
        Fall under the ‘State List’(Under 7th schedule) of                of the Constitution of India 
        the constitution.                                              •  Enacted in enacted March 2016, RERA 
        Regulating contracts and transfer of property –                   came into effect from May 2017 
        Fall under ‘Concurrent List’ (Under                         
         th
        7  schedule) of the constitution. The above act            Objectives of RERA: 1. Enhance transparency 
        deals with this.                                           and accountability in real estate and housing 
        Aim:                                                       transactions 2. Boost domestic and foreign 
        Bring about transparency in the real estate sector,        investment in the real estate sector 3. Provide 
        thereby encouraging investments by foreign and             uniform regulatory environment to ensure speedy 
        domestic financial institutions and protecting the         adjudication of disputes 4. Promote orderly 
        interests of home buyers                                   growth through efficient project execution and 
        Key Issues (need) in the Real Estate Sector:               standardization; 5. Offer single window system of 
        1).Lengthy approval process for project clearances         clearance for real estate projects 6. Empower and 
        2). Lack of clear land titles                              protect the right of home buyers  
        3). Prevalence of black money                               
        4). Diversion of funds received by the developer           Key Provisions of Real Estate Regulation 
        towards one project to more lucrative ones                 Act: 1. Establishment of state level regulatory 
        5). Construction work has come to a standstill or          authorities-  Real Estate Regulatory Authority 
        the developer has left without completing the              (RERA)- the Act provides for State governments 
        project                                                    to establish more than one regulatory 
        6). Developer changes the layout or building plans         authority Functions: 
        after purchase                                                 •  Register and maintain a database of real 
        7). Legal disputes (It had to be settled in the                   estate projects; publish it on its website for 
        courts)                                                           public viewing, 
        8). Endemic issues – For Ex recessive conditions               •  Protection of interest of promoters, buyers 
        in the past few years.                                            and real estate agents 
        9). Distress caused by two drought years has also              •  development of sustainable and affordable 
        cut demand in the rural and semi-urban segment.                   housing, 
                                                                       •  Render advice to the government and 
        What is RERA?                                                     ensuring compliance with its Regulations 
            •   RERA, 2016 is a central legislation which                 and the Act 
                aims to regulate the real estate sector. It 
                                                                                                                          
                                                                                 3 
                                                                                                                                               
             Newspaper Analysis ProgrameTM  
                  WORKSHEeT -6 (UPSC PTcumMAINS-2020) 
                                                              (RERA ACT) 
          2. Establishment of Real Estate Appellate                                         •    According to ICRA’s research, there has 
          Tribunal- Decisions of RERAs can be appealed in                                        been a marked improvement in project 
          these tribunals.                                                                       completions (ICRA’s sample set: 11 listed 
                                                                                                 real estate developers who have projects 
          3. Mandatory Registration: All projects with plot                                      across India) 
          size of minimum 500 sq.mt or eight apartments                                     •    Project completions increased from 30.02 
          need to be registered with Regulatory Authorities.                                     million sq-ft in FY2015 to 45.51 million 
                                                                                                 sq-ft in FY2017 
          4. Deposits: Developers needs to keep 70% of the                                  •    Project deliveries witnessed a growth of 
          money collected from a buyer in escrow account                                         30.5% from 2016 to 2017 2. Model 
          to meet the construction cost of the project. Note:                                    builder-buyer agreement, disclosure norms 
          An escrow account is a temporary pass through                                          has brought transparency in the real estate 
          account held by a third party during the process of                                    sector 3. The Act has been effective in 
          a transaction between two parties.                                                     boosting confidence in the buyers. This is 
                                                                                                 reflected by the increase in housing sales. 
          5. Liability: A developer’s liability to repair                                        Home sales registered a 33 per cent rise in 
          structural defects- 5 years                                                            the top nine cities in last one year 4. 
                                                                                                 RERA has been highly successful in 
          6. Penal interest in case of default: Both promoter                                    Maharashtra. 
          and buyer are liable to pay equal rate of interest in                             •    Currently, more than 25,000 projects have 
          case of any default from either side                                                   been registered under RERA across India, 
                                                                                                 out of which 62% are in Maharashtra alone 
          7. Cap on Advance Payments: A promoter cannot                                     •    Maharashtra Real Estate Regulatory 
          accept more than 10% of the cost of the plot,                                          Authority (MahaRERA) has disposed off 
          apartment or building as an advance payment or                                         1168 complaints 5. Boost confidence in 
          an application fee from a person without first                                         global investors-  increased investment in 
          entering into an agreement for sale                                                    real estate sector. 
                                                                                       Pertaining Issues: 1. Notification of Rules: 
          8. Clearly defines Carpet Area as net usable floor                                •    Only 20 out of 28 states have notified rules 
          area of flat. Buyers will be charged for the carpet                                    stipulated under RERA 
          area and not super built-up area.                                                 •    West Bengal, Arunachal Pradesh, 
                                                                                                 Manipur, Meghalaya, Mizoram, Nagaland, 
          9. Punishment: Imprisonment of up to three years                                       Sikkim and Tripura are yet to notify rules 
          for developers and up to one year in case of agents                                    2. Establishment of Real Estate Authority: 
          and buyers for violation of orders of Appellate                                   •    Only Maharashtra, Madhya Pradesh and 
          Tribunals and Regulatory Authorities.                                                  Punjab have permanent regulatory 
                                                                                                 authority 
          Critical Evaluation of RERA: Benefits 1.                                          •    13 states have ‘designated’ regulatory 
          Completion/ Delivery of Projects:                                                      authorities- an existing body designated as 
                                                                                                                                                              
                                                            4 
                                                                                                           
           Newspaper Analysis ProgrameTM  
             WORKSHEeT -6 (UPSC PTcumMAINS-2020) 
                                              (RERA ACT) 
               authority until permanent one is                         compliance with the Act and payment 
               established.                                             schedule and liability in case of structural 
        4. Establishment of a Real Estate Appellate                     defects 
        Tribunal:                                                8. Challenge in North East: RERA has been 
           •   Only 15 out of the 35 (states and UTs)            challenged in north-eastern state on certain 
               have appellate tribunal                           constitutional grounds-  land belonging to the 
        5. Potential conflict between IBC and RERA:              community and autonomous councils  
        Fundamental contradiction-                               9. Delays due to government approvals: 
           •   IBC allows companies to file for                  A major concern has been delay due to 
               bankruptcy to provide relief to debtors or        government approvals of real estate projects (like 
               creditors                                         like ownership certificate, land use conversion, 
           •   While, RERA seeks to provide relief to            environmental and pollution NOCs etc)  
               homebuyers and hold developers/ builders           
               for project delays                                Way Forward:  
           •   RERA does not address the issue of                1. Centre and state must collectively resolve any 
               insolvency of a developer                         conflict arising out of RERA implementation  
        KEY TAKEAWAYS                                            2. Potential conflict between RERA and IBC to be 
           •   Recently, the Union Cabinet has cleared an        checked  
               ordinance amending the Insolvency and             3. Government agencies should be made 
               Bankruptcy Code (IBC)                             accountable for the delay in granting approvals  
           •   The amendment is expected to facilitate           4. States should not dilute the RERA provisions. 
               homebuyers when it comes to recovering            Provisions for punishment of violations, should be 
               their dues from bankrupt companies.               kept intact in all state laws  
                                                                 5. A robust IT infrastructure should be established 
        6. Conflict between state and Centre over RERA           for monitoring projects and quick redressal of 
        implementation                                           grievances  
           •   State governments regulated real estate           6. The government has already set up Central 
               before RERA as land and land                      Advisory Council (CAC) for effective 
               improvement are in the State List of              implementation of RERA. The scope of functions 
               Seventh Schedule of the Constitution.             of CAC should be broadened to include advisory 
               RERA has been enacted under Concurrent            to state bodies on issues related to RERA 
               List. This has increased the tussle between       compliance  
               various states and Centre over                    7. Ensure flow of funds in the sector; endowment 
               implementation of RERA                            funds should be made available to developers.  
        7. Dilution of Act by States:                            8. States should fully implement RERA to curb 
           •   Act has been diluted by States to favour          black money, given large part of it originate and 
               developers.                                       flows in the real estate sector  
           •   Major areas of dilution include: Definition       9. For effective implementation, the centre has 
               of ongoing projects, penalties for non-           already intervened and notified June 30, 2018 as 
                                                                                                                      
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...Newspaper analysis programetm worksheet upsc ptcummains rera act real estate regulation programme work sheet part copyright aspire ias all rights are reserved no of this document may be reproduced stored in a retrieval system or transmitted any form by means electronic mechanical photocopying recording otherwise without prior permission las the and development seeks to empower protect property came into force on consumers make transactions fair central state governments liable notify transparent rules under within statutory period was enacted entry six months dealing with contracts land over improvements transfer concurrent list fall th schedule constitution india march regulating effect from above objectives enhance transparency deals accountability housing aim boost domestic foreign bring about sector investment provide thereby encouraging investments uniform regulatory environment ensure speedy financial institutions protecting adjudication disputes promote orderly interests home bu...

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