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Q. Real Estate Regulatory Act: Discuss the importance of recently notified Real Estate Regulatory Act.
Apr 24, 2017 Related to : GS Paper- 2

Ans :


To regulate the real sector in India, the government of India has passed The Real Estate Regulatory Act (RERA). The RERA is a central act, but its implementation will depend on state governments, as real estate is a state subject. In this backdrop the central government has set a three-month deadline starting May 1 for all state governments to appoint a Real Estate Regulatory Authority. RERA, which is set to come into effect from May this year, has a plethora of advantages that shall help the homebuyers in many ways.

Importance of RERA- 

  • It establishes the state authority and vests authority on the Real estate regulator to govern both residential and commercial real estate transactions and with this it shall improve the governance hold on the real estate sector reducing disputes to a great extent. 
  • The act provides provision of depositing around 70% of funds in a dedicated account, which will ensure sufficient funds for the projects to speed up and lead to getting completed on time. 
  • This timely delivery of the project is the biggest factor or cause of concern for the homebuyers and by taking this step if it helps in having a timely delivery, then it shall be a big relief for the homebuyers.
  • RERA shall bring in more clarity in the deals between the developers and the homebuyers leaving out ambiguities. Now the deals and transactions shall be more specific so as the homebuyers do not suffer unnecessarily later on for the lack of clarity.
  • As the deals and transactions shall become more clear, they shall become more transparent benefitting the homebuyers in the way that they shall be more aware of their buy. If more transparency is ensured it will attract more FDI’s.
  • RERA is set to improve the feasibility of financing options availability in the market leading to increased investments and propelling more FDIs and thereby making the system more efficient and home-buyers friendly. Taking into consideration all these factors, the ultimate beneficiary is going to be the homebuyer.


The government has already notified the new law to ensure fair trade practices in the real estate sector in its entirety. The real estate regulatory act is intended to serve various issues related to regulations that real estate industry is facing. The law will address these issues and from buyers point of view it serves its purpose to great extent.

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