International Research Journal on Advanced Engineering e ISSN: 2584-2854

Volume: 02
and Management Issue: 08 August 2024
https://goldncloudpublications.com Page No: 2491-2494
https://doi.org/10.47392/IRJAEM.2024.0359

Impact of RERA on Real Estate

Manan patel1, Ankit Kumar s. patel2, Jayraj v Solanki 3, Paresh Kumar H. Patel4
1,2
PG Student, Department of Civil Engineering, Ganpat University, Kherva, Gujarat, India
3,4
Assistant professor, Department of Civil Engineering, Ganpat University, Kherva, Gujarat, India
Emails: [email protected], [email protected], [email protected],
[email protected]

Abstract
In 2016, the Real Estate (Regulation and Development) Act (RERA) was enacted in India with the aim of
stimulating growth in the housing sector. RERA serves as the regulatory authority overseeing the real estate
domain in the country. It mandates that developers, buyers, and sellers adhere to its prescribed rules and
regulations. RERA holds legal authority to supervise the construction of estates, buildings, and flats, as well
as to regulate minimum selling prices of apartment houses. To assess the impact of RERA on the real estate
sector, a questionnaire was devised in collaboration with real estate experts. The data gathered through this
survey was analyzed using frequency index analysis & Relative index method to discern both positive and
negative impacts of the RERA act on India's real estate sector. Following analysis, the top 5 factors were
identified, revealing that RERA projects provide a sense of security, benefiting homebuyers, builders, and
contractors alike. Additionally, it was found that approximately 70 % of individuals working within the real
estate sector possess a comprehensive understanding of the RERA act. Notably, instances of fraudulent
transactions have witnessed a decline post the implementation of RERA. Developers now recognize the
necessity of obtaining written consent from homebuyers should they intend to make any alterations to the
project plan. Moreover, RERA mandates that developers adhere to project timelines following registration,
thereby ensuring timely project completion. This comprehensive framework established by RERA fosters
transparency and accountability within the real estate sector, ultimately enhancing consumer trust and
investor confidence.
Keywords: RERA, Real estate regulation, Security for homebuyers, Fraud reduction, Timely project

1. Introduction
The Real Estate Regulation and Development Act transactions more transparent, fair, and safe for
(RERA) of 2016 brought big changes to how real buyers. In 2017, Maharashtra became the first state to
estate works in India. Before RERA, there were a lot implement RERA, setting an example for other states
of problems. People didn't always get what they were to follow. RERA introduced new rules that
promised when buying a home. Sometimes, projects developers had to follow. They had to register their
got delayed, or builders didn't follow through on their Projects and provide clear details about them. This
commitments. This made people lose trust in the real helped buyers make informed decisions. RERA also
estate market. RERA was created to fix these set deadlines for project completion and required
problems. It was made to make real estate developers to keep buyer funds safe in special

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 International Research Journal on Advanced Engineering e ISSN: 2584-2854
Volume: 02
and Management Issue: 08 August 2024
https://goldncloudpublications.com Page No: 2491-2494
https://doi.org/10.47392/IRJAEM.2024.0359

accounts. We will look at how RERA has changed  Quality Assurance

the real estate market in India. We'll see how it has  Consumer Protection
affected different people involved, like buyers and  Prevention of Unethical Practices
developers, and how it has influenced the way the  Stimulating Real Estate Investments
market works. By understanding the impact of  Boosting Developer Credibility
RERA, we can learn how regulations can make real 1.3 Limitations of RERA
estate better for everyone. As we explore the effects  Limited Coverage
of RERA, we'll see how it has improved things like
 Uneven Implementation
project timelines, prices, and trust among buyers.
 Lengthy Dispute Resolution
We'll also see where there are still challenges and
 Loopholes in Enforcement
how RERA can be improved in the future. Overall,
RERA has made a big difference in India's real estate  Limited Redressal Mechanisms
sector. It shows that when there are good rules in  Dependency on Regulatory Authorities:
place, everyone benefits. By studying the impact of  Impact on Housing Supply.
RERA, we can learn important lessons for making  Exemption for Ongoing Projects.
real estate fairer and more reliable in the future. 1.4 Objectives
1.1 History of RERA Act To evaluate the awareness levels of individuals in
The Real Estate (Regulation and Development) Act, the real estate sector regarding the rules and
commonly known as RERA, has its roots in concerns regulations stipulated under the RERA Act. To
that emerged in the early 2000s regarding the analyze the perceived benefits of the RERA Act for
regulation of the Indian real estate sector. Designed builders, contractors, and homebuyers. To identify
to address a range of challenges including unethical any gaps in understanding or implementation of the
practices, project delays, and disputes between RERA Act among industry stakeholders. To provide
buyers and developers, RERA was conceived as a insights into how increased awareness and
comprehensive legislative framework. The compliance with the RERA Act can positively
Government of India took the initiative to draft the impact the real estate industry. [2-5]
Real Estate (Regulation and Development) Bill, 2. Literature Review
which underwent parliamentary scrutiny and was Existing literature on the RERA Act and its
ultimately passed into law on March 25, 2016. implications for the real estate sector will be
Following its enactment, states across India began reviewed to provide a comprehensive understanding
establishing their respective regulatory authorities, of its provisions, challenges, and benefits. This
with Maharashtra being among the first to do so in review will help contextualize the study within the
2017. Since its implementation, RERA has broader landscape of real estate regulation and
undergone amendments aimed at enhancing its development. [6]
effectiveness and bolstering consumer protection 3. Data Collection
measures. These continuous updates reflect ongoing There are various approaches to gathering data, with
efforts to refine and strengthen the regulatory one of the primary methods being surveys
framework governing the real estate sector in India. conducted via questionnaires. In this research, data
(Kadam et al., 2019) [1] on the impact of the Real Estate (Regulation and
1.2 Advantages of RERA: Development) Act (RERA) in India on developers,
 Enhanced Transparency engineers, and contractors was initially collected
 Accountability and Financial Discipline through questionnaires. These questionnaires were
 Timely Project Completion crafted with the assistance of experts in the real
estate field, encompassing key aspects related to the

IRJAEM 2491
 International Research Journal on Advanced Engineering e ISSN: 2584-2854
Volume: 02
and Management Issue: 08 August 2024
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https://doi.org/10.47392/IRJAEM.2024.0359

regulations stipulated by RERA in India. Using help with spss software

The survey questionnaire is implemented using Designed to address a range of challenges including
two distinct methods: unethical practices, project delays, and disputes
 Distributing physical copies of the between buyers and developers, RERA was
questionnaire. conceived as a comprehensive. Figure 1 shows the
 Utilizing Google Forms for questionnaire Top 10 most liked questionnaire chart by frequency
distribution. index analysis. Figure 2 shows the Top 10 most liked
3.1 Sample Size Calculation questionnaire chart by frequency index analysis.
The population of this study includes all the Figure 3 shows the relative importance analysis chart.
stakeholders associated with the construction Figure 4 shows the Top 10 most liked questionnaire
contractor firms. In order to obtain the desired by relative importance method.
outcome, sample size calculations were made in order
to determine a limited number for the samples that
were to be gathered. [7] Chart Title
This method established by was used to determine the
sample size for an infinite population,
6.7
RERA has increased… 10
10
RERA has led to a… 13.3
13.3
RERA has influenced… 16.7
Were, 16.7
n = Number of Samples RERA has influenced… 16.7
z = Confidence Level (90%) 20
RERA has made… 20
p= Sample proportion ex: (For Infinite Universe – 23.3
RERA has effectively… 23.3
50% - 0.50)
23.3
q = 1 – p (0.50) RERA has simplified… 23.3
e = 0.12 (12% acceptance Error) 26.7
RERA has encouraged… 26.7
4. Data Analysis 30.0
RERA has encouraged… 33.3
4.1 Frequency Index Analysis 36.7
RERA has reduced the… 40
Frequency index analysis method is used to analyse
40
the collected data, in this method a formula is used to RERA has increased… 40
rank the impact of factors based on frequency of 43.3
RERA has contributed… 46.7
occurrence as identified by the respondents. 53.3
Overall, RERA has had…
After the analysis data our findings are below in the 60
RERA has positively… 60
table. 66.7
The data analysis is conducted based on the following RERA has significantly… 70
76.7
equation: 0 20 40
F.I. (%) = ∑ [a × (n / N)] × (100/ 5) 60 80
Were,
F.I. = Frequency Index 0-100
a = Weight of Likert scale
n = no. of response on a scale Figure 1 Top 10 Most Liked Questionnaire
N = no. of respondents (ex: 72) Chart by Frequency Index Analysis

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Volume: 02
and Management Issue: 08 August 2024
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https://doi.org/10.47392/IRJAEM.2024.0359

Chart Title RII percentage %

80
44.0
70 RERA has enhanced the… 56.0
57.3
60 67.3
RERA has made it easier… 74.7
50 78.7
78.7
40 RERA has led to a… 80.0
80.7
30 81.3
RERA has influenced the… 81.3
20 82.0
82.7
RERA has effectively… 82.7
10 83.3
84.0
0 RERA has simplified the… 84.0
84.0
84.7
RERA has improved the… 86.7
88.0
88.0
RERA has positively… 89.3
90.7
RERA has effectively… 91.3
93.3
93.3
RERA has significantly… 94.7
95.3
95.3
0.0
50.0
100.0

RII percentage %

Figure 2 Top 10 Most Liked Questionnaire Figure 3 Relative Importance Index Analysis
Chart by Frequency Index Analysis Chart

5. Relative Importance Index

Chart Title
The Relative Importance Index (RII) Is A Method
Used to Assess and Rank the Importance of Various 96
Indicators Based On Respondents' Ratings Using a 94
Likert Scale. In This Scale:
92
1. Indicates "Strongly Disagree"
90
2. Indicates "Disagree"
88
3. Indicates "Neutral"
86
4. Indicates "Agree"
84
5 Indicates "Strongly Agree"
To Compute The RII for an Indicator:
Calculate The Average Weight W Assigned to The
Indicator Across All Respondents.
Divide This Average by The Highest Possible
Weight On the Likert Scale, Which Is 5.
N =Total Number in The Sample
RELATIVE IMPORTANCE INDEX = ΣW / (A*N)

𝑾 𝟓𝒏𝟓 +𝟒𝒏𝟒 + 𝟑𝒏𝟑 +𝟐𝒏𝟐 +𝟏𝒏𝟏 Figure 4 Top 10 Most Liked Questionnaire by
∑ = Relative Importance Method
𝑨𝑵 𝟓𝑵

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 International Research Journal on Advanced Engineering e ISSN: 2584-2854
Volume: 02
and Management Issue: 08 August 2024
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https://doi.org/10.47392/IRJAEM.2024.0359

6. Results and Discussion References

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importance method, the top 5 questions in a Likert Sagavekar AA, Parulekar GD, Patil SS, et al.
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