Real Estate Regulatory Authority (RERA) bill passed on 2013 by Indian National Congress. It got approved in March 2016 for 13 states and union territories.
Here are the list of states and union territories where RERA act have been notified.
- Andhra Pradesh
- Uttar Pradesh
- Andaman & Nicobar Islands
- Dadra & Nager Haveli
- Daman & Diu
Tamilnadu and few other states have also framed their draft rules of RERA
There is a great need for homes in India. Most of the people face great loss in real estate due to fake promises made by few real estate builders. It is the one of the greatest revenue for the Indian government. Government fails to observe these,as a result many people has become victims. Hence,to eradicate this problem government has passed RERA to protect homebuyers.
Some of the problems faced by people are:
- Delay in giving the house to the buyers due to some reasons like delayed funding etc.
- Selling of same flat/house to multiple buyers rather selling to a buyer.
- Contracts made in favor of builders alone.
Benefits of buyers from RERA :
- The buyers will pay only for the carpet area (area within the walls), not for the built up area.
- For years buyers have to pay 20% of the total amount for booking. With RERA buyers can pay only 10% of the amount.Moreover,the money is paid only after the agreement for sale is made. Builders have to maintain a separate bank account for each project.
- The builder should rectify the structural defects if any for 5 years (earlier it was 2 years) after the possession is handed. The defect should corrected within 30 days of the complaint. We, at Cityrene builders, use GFRG to prevent the damages like cracks, water seepage in the building.
- Buyer has the rights to know the project plan in detail and also to know each stage of completion.
- Developers have to deposit 70% of the money in a separate bank account to meet the cost requirement of the project. Also, the buyers will give cost for the project at each stage of construction instead of getting total money of the project.
- RERA is mandatory for all commercial and residential projects, which are more than 500 sq.m. or 8 apartments must be registered before starting the project.
- Developers can sell the project only after the clearances.Therefore, it makes easy for the home buyers to buy the property with trust.
- Website owned by the builders is registered to ensure correct information about details of the development plans, financial details, plan details, registered agents and consultants etc.
- Builders have to pay a penalty of 10% or even imprisonment in-case of not honouring the commitment made by them.
- Builders have to register each project with the local housing regulatory body. The builders or the developers have to submit building plans, approvals.During the process of construction if there is any change in the plan, should be informed and approval before making the changes.
- Builders should get project completion certificate for each project before the buyers possess the property to ensure that the building has not violated any rules and norms or diverted from the approved plan and layout, which were approved before starting the construction. If the authority finds any deviation in construction, they may reject the certificate application and ask the developer to make the changes or complete the remaining work, before reapplying for the completion certificate.
How builders can be benefited by RERA:
- Builders can impose penalty to the buyers as a result of not paying the money on time.
- Builders can approach the authority in-case of any issues with the buyers.
Establishment of RERA act will enhance the real estate market in India; will bring the buyers confident back on the builders. In addition, this act will also reduce the fake real estate buyers. While buying a property buyers can get to know about the approvals and certifications of RERA and can confidently approach the builder. If anything goes wrong in the future buyers can approach the authority.
Check our other blogs here.