RERA that stands for Real Estate Regulation Authority announced the RERA act to be implemented by 1 May 2017.
The RERA Act doles out norms and regulations for the real estate market that must be followed by both Real Estate Developers and Buyers for both commercial as well as residential projects.
Looking to bring in Transparency and Accountability to the real estate and a widespread standardization of rules, it calls for timely delivery of construction projects and foolproof protection to buyers.
It is aimed at relieving the plight caused to home buyers by the malpractices of unfair builders, by providing them certain rights that safeguard them from being cheated on by developers.
It must not be forgotten a positive environment forms for the developers as well with the consumers gaining confidence on the developers due to this act.
The RERA Act also states that each state of this country must set up its own Real Estate Authority and Appellate Tribunal to address the grievances of aggrieved buyers in the case of any wrongdoing by the developers.
With strict penalties in place for developers in case of violation, the RERA act has brought a certain responsibility in the Indian Real estate Market which has been exhibited in the rise of business volumes that were seen since its introduction.
Following documents should be enclosed in hardcopy with the application:
PAN Card of the builder
ITR of last 3 years and the balance sheet of the builder
The builder must clarify about the apartment (carpet area, number of floors, parking space)
Declaration by the builder of having legal title of the land with proof
Details of the land (rights, title, mortgage)
If the builder is not the owner of the land, the consent letter of the actual owner with documents will be required
Details of the project (location, sanctioned plan, layout plan)
Ownership documents (proforma of allotment letter, agreement of sale)
Information of the persons involved (Architects, Engineers and others)
Carpet Area Standardized:
Due to lack of uniformity in the calculation of carpet area, this act has firstly defined the formula for calculation of carpet area to be adopted by all builders and developers. This is a major factor for buyers as the cost of a property is calculated based on this.
Cost of Property = Carpet Area x Rate per Sq. ft.
Earlier it was seen that a lot of developers would portray the carpet area falsely in order to hike the price of the flat which is not possible now.
On Defaulting, the rate of interest to be paid the same for both parties:
In the case of defaulting on payments & possession by the buyer and the seller, the rate of interest shall be the same for both. The developers who used to charge more interest to buyers on defaulting payments would now be charged with the same rate of interest in case of defaulting on possession date by them.
Reduces Risk of Builder Insolvency/ Bankruptcy:
Especially in the case of big developers who are involved in multiple projects at the same time, it is now mandatory to deposit 70% of the amount realized in construction costs in a separate bank account which can be used for that project only and can be withdrawn only on completion after being certified by concerned authorities.
Rights of Buyer in case of False promises:
When the commitments given by a builder are not met, then the buyer is eligible for a full refund of the advance amount or any amount that was paid along with interest. Also, they will be allowed to claim compensation for their grievances.
An advance amount or any applicable fees that are collected towards a property must not be more than 10% of the cost of the house and must be collected only after an agreement of sale has been executed between the buyer and the seller.
Rights of Buyer in case of defects found after possession:
After a buyer has possessed property in case any defects have been found within 5 years of their possession, the builder is liable to bear all the expenses for repair of it and do so within 30 days
Rights of Buyer in case of Delay in possession:
In case of delay in completion or possession, the buyer can either withdraw from the project in which case he is entitled to a full refund or continue with the project till completion and collect the interest for the period of delay by the developer.
Rights of Buyer in case of Defect in Title:
Once a buyer has possessed the property and in case defects in the title have been discovered the buyer is eligible to claim compensation with no time limit on the discovery.
Right to Information:
Gone are the times when the buyer would have limited info on the house, with this reform coming in the Buyer is entitled to know all information on the project right from title deeds to the time of completion.
If the buyer, the promoter, or the agent has any complaints with respect to the project, they can file a complaint with RERA. If they aren’t pleased with RERA’s decision, a complaint can also be filed with the Appellate Tribunal.
EXEMPTION FROM RERA
Certain projects are exempt from the RERA Act regulations and those are mentioned below:
• For a project, whose Proposed area of land to be developed is more than 500 square meters or the number of apartments is exceeding 8.
• A project that received a certificate of completion before the introduction of RERA.
• For scenarios where existing projects are being renovated, repaired or redeveloped not new projects.
Homes247.in Experts View:
As per latest Indian Real Estate trends, The RERA act which has already been encouraging speedy, transparent and smooth developments in Real estate for the past 2 years, has been the biggest boon to the Home buyers in India.
Coming from times when Home Buyers were fooled by developers and cheated of their wealth to now, where all factors involved in the home buying process are brought under the RERA act, the RERA act ensures honest business.
We at Homes247.in are of the opinion that when the government and authorities have implemented such an important initiative to cleanse the real estate market, buyers must take full advantage of this as there has never been a better time to invest in Indian Real estate than now.