In India, the right to own property was part of the fundamental rights section. Now, however, real estate in India is together governed by the federal (central government) and the state legislature. With changing times, the real estate laws have also changed and have impacted the real estate industry in different ways.
The fast-paced development of new properties and the ownership of property happened in the last few years, since there are no limitations or rules to how much property a person can own.
However, when cases of fraud such as money laundering, theft, and corruption gradually started occurring, things changed and became a hassle.
But RERA and FEMA were the 2 laws that changed the real estate industry in a significant way. These laws have to some extent changed and improvised a lot of real estate norms. Let’s learn about them in detail.
What is FEMA Act (1999)?
FEMA ( i.e Foreign Exchange Management Act) was introduced in the year 1999 to replace its earlier version FERA (i.e Foreign Exchange Regulation Act). FEMA was intended to fix all the loopholes and shortcomings of FERA. Thus, all economic reforms were evaluated under the FEMA act. This law outlines all the foreign exchange transactions in India.
Under FEMA and FDI (i.e Foreign Direct Investment) Indian residents can own, transfer, or invest in immovable property outside India if it was acquired, held, or owned by the resident while he/she was outside India or inherited from a resident outside India.
Investment in real estate development is allowed by non-residents through Indian companies. However, an investment through an LLP, partnership firm, branch, or any other method is not permitted. Non-residents may not do business directly.
What is RERA(2016)?
RERA, (i.e Real Estate Regulatory Authority) was introduced for maintaining transparency in the real estate industry. Back then, before this act was introduced some builders and contractors used to change the infrastructure, and project plan without the consent of the customer.
Many times there used to be lots of project delays and property fraud. After RERA was introduced, the home buying process was safeguarded. By selecting a RERA registered project, there is an assurance of timely completion of the project, handing over the property key on the given date, and abiding by every rule of RERA to hold accountability. Also, the builder can not charge the homebuyers for both the built-up and super built-up area according to the rules of this act.
As said earlier, both laws have impacted and made the real estate industry more reliable,
Here are some benefits of both the laws-
To ensure timely delivery of completed projects, the government has made it mandatory for all developers to register their projects with the RERA act.
Both residential and commercial properties are subject to RERA laws, which means all types of developments are now governed by this law.
Each builder is required by this act to disclose the details of the property on the RERA website.
You can inform the developer of construction defects up to five years after you receive the keys, and he must fix them.
FEMA act helped to facilitate payments and external trade in India. It gave full freedom to the citizens of India in terms of real estate investment and to date, it has proved to be useful.
It won’t be incorrect to say that, real estate has developed authenticity. With new laws, rules and regulations being introduced, this industry is sure to prosper and reach new heights in coming times