“RERA Is The New Game Changer In New Real Estate Sector”
The Real Estate Regulation Act (RERA) has been introduced to protect the interest of investors in the real estate market and to deal with fraudulent developers bringing a great transparency in the real estate market. RERA has a significant impact on real estate sector and for home buyers.
The Government of India imposed the Real Estate (Regulation and Development) Act 2016 on 26th March 2016 and all its provisions came into effect, from May 1, 2017.
What is RERA ?
Real Estate (Regulation and Development) Act is an Act passed by the Indian Parliament that came into force on May 1, 2017. It’s aim is to protect the homebuyers and boost investment in the real estate market. The Rajya Sabha,Delhi passed the RERA bill on March 10, 2016, followed by the Lok Sabha,Delhi on March 15, 2016 and it came into force from May 1, 2016. 59 of its 92 sections were notified on the date May 1, 2016 and the remaining provisions came into force from date May 1, 2017. Under this Act, the central and state governments, are required to notify their own rules under the Act, six months, on the basis of the model rules framed under the central Act.
Why RERA ?
In the past investors have complained more about the frauds done by the developers and complaints they have dealt with transaction against the purchase of illegal properties. RERA’s aim is to create fair transaction between the seller & buyer of the properties and to bring transparency in the real estate market. With RERA real estate market will be much simpler for the homebuyers to purchase properties with transparency. RERA as the first India real estate regulator will govern and frame the rules for the real estate market.
How RERA impacts the home buyers ?
- RERA act will make sure to register before the launch for all commercial and residential projects which are above 500 sq. metres.
- RERA penalises developers who don’t facilitate timely possession of the property.
- To stop the developers from making investments from booking amounts, they have to now park 70% of their funds in one dedicated bank account through cheques.
- Prices must be developed and quoted by the developers based on carpet area and not the super-built up area.
- Developers have to sell the projects that meet all the clearances and are free from legal disputes.
- Home buyer can call the developer anytime within one year after taking possession for after- sales services, damage repairs or compensation for any inadequacies.
- Home buyer can claim compensation for structural defects in the construction of the property for 5 years from the date of possession
- Any developer found violating the order of appellate tribunal of RERA could face a jail term of up to three years and a fine.
- As per RERA, builders-buyers disputes can be solved within 120 days under the regulatory bodies and appellate tribunals.
- The developers must also keep a clean record and the right credentials to continue their business practices.
- No false or misleading advertisement before the launch of the project.
Advantages Of RERA
Timely Delivery Of Flats :
Builders often make false and misleading promises about the completion of the project but they do not deliver. RERA enforces strict regulations on builders to ensure home buyers that construction should be completed on time and the flats should be delivered on time of the possession. If the builder fails to do so, he/she has to refund the amount with interest to the home buyer.
Providing Accurate Project Details :
During the time of construction builders promises about providing different amenities and features that would be included in the project. As per plan the features does not goes everything or nor the amenities are provided with it. As per RERA no changes can’t be made to a plan. If builder is found guilty, he/she will penalized 10% of the project’s costs or face jail up to three years.
Specify The Carpet Area :
Builders sell flats according the built in area or super built up area, which includes a common passage area, stairs and other spaces 20%-25% more than actual flat area. Because all home buyers are not aware of this, it is mandatory to tell the actual carpet area of the passage or the room with the right amount.
All Clearance Need To Be Made Before The Project :
Builders often attract home buyers with offers and discounts on the purchase of property. The buyer accepts the offer and does not bother about the clearance. Due to delay in getting the possession and clearance, the home buyer does not get the flat on time. RERA ensures to provide all clearances to be made before selling the flats.
Each Individual Project Should Have A Separate Bank Account :
Builders earn and raise funds through offers from home buyers and purchase other different land or property to invest in it. RERA makes it compulsory for the builder to have a separate bank account which should be maintained for each project. Record of each transaction has to be kept and diversion of another project should not be done with the homebuyers.
After Sales Service :
As per RERA, if the home buyer has any issues regarding the deficiency of the house or the building, the home buyer can contact the builder for after sales service. For any circumstances, the buyer should approach the builder within a year of purchase to rectify such defects without further charges.
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