Here is how RERA will Impact Home Buyers
Jun 20, 2017 Real Estate News
The Real Estate (Regulation and Development) Act, 2016 (RERA) have finally become a first regulatory body in the Indian real estate sector and has already come into effect from 1st May 2017. This is certainly a good news for all home buyers as it would help to protect home buyers and maintain transparency between buyers, real estate developers and agents.
Lack of transparency, financial mismanagement, apathy towards consumer’s rights and a blatantly flourishing parallel economy were some of the key problems in real estate. Hence it is a milestone for the Indian Real estate market. RERA act will help to promote transparency and efficiency in the sector, which was unclear due to some unsystematic players in the market.
Below are a few benefits of the RERA act to the home buyers:
1) Increased Transparency
Under this Act developers/builders have to disclose all the details related to the property like project layout with a plan, a number of units to the actual carpet area, the number of towers in the building and number of floors in each building, etc. And all the ongoing and upcoming projects must be registered under RERA.
As per the present scenario, a buyer was charged for the super built up area and the carpet area was 30-35 percent lesser than that of the super built-up area of the project. Under this act, buyer will have to pay for the carpet area only. Hence buyer is well informed about the space being offered and any major alteration or addition requires consent of two-third buyers
2) Liability:
Under RERA if the delivery of the project gets delayed, then the developer will have to return the money taken from the buyer with an interest or pay the same interest as per the EMI paid by the buyers.
Even after the possession till five years promoter/developer has to rectify the defects without asking for any extra charge from the buyer.
The amount to be paid by the buyer has been reduced from 20 percent to 10 percent and must be paid only after registering the agreement for sale with the builder.
3) Security
As per RERA guidelines, developers need to transfer 70 percent of the project money received from the buyer to a separate account and will be used for the particular project only. Hence it will reduce the buyer’s risk and will make sure that the developer is not using the same money in numerous projects. And the money withdrawals should be in the proportion with the project completion and under the certification by Project engineer, architect and chartered accountant.
4) Discipline:
Developers must register their projects with RERA before the marketing of the project
All project details must be updated quarterly on RERA website.
Project accounts must be annually audited by CA’s.
Brokers/agent also must be registered under RERA.
5) Compliance
In case of delay in project delivery, the developer will pay interest to the home buyers.
In case three payment defaults developer can terminate the agreement giving 15 days notice.
Complaint at the initial stage will be handled by the RERA authority and the disputes will be settled in 120 days.
All ongoing and upcoming projects need to get registered under RERA by 30th July 2017. During this period there will be less activity in the real estate market as most of the developers will be busy complying with new regulations. The implementation of RERA will definitely improve the transparency and timely delivery of the projects.
Lack of transparency, financial mismanagement, apathy towards consumer’s rights and a blatantly flourishing parallel economy were some of the key problems in real estate. Hence it is a milestone for the Indian Real estate market. RERA act will help to promote transparency and efficiency in the sector, which was unclear due to some unsystematic players in the market.
Below are a few benefits of the RERA act to the home buyers:
1) Increased Transparency
Under this Act developers/builders have to disclose all the details related to the property like project layout with a plan, a number of units to the actual carpet area, the number of towers in the building and number of floors in each building, etc. And all the ongoing and upcoming projects must be registered under RERA.
As per the present scenario, a buyer was charged for the super built up area and the carpet area was 30-35 percent lesser than that of the super built-up area of the project. Under this act, buyer will have to pay for the carpet area only. Hence buyer is well informed about the space being offered and any major alteration or addition requires consent of two-third buyers
2) Liability:
Under RERA if the delivery of the project gets delayed, then the developer will have to return the money taken from the buyer with an interest or pay the same interest as per the EMI paid by the buyers.
Even after the possession till five years promoter/developer has to rectify the defects without asking for any extra charge from the buyer.
The amount to be paid by the buyer has been reduced from 20 percent to 10 percent and must be paid only after registering the agreement for sale with the builder.
3) Security
As per RERA guidelines, developers need to transfer 70 percent of the project money received from the buyer to a separate account and will be used for the particular project only. Hence it will reduce the buyer’s risk and will make sure that the developer is not using the same money in numerous projects. And the money withdrawals should be in the proportion with the project completion and under the certification by Project engineer, architect and chartered accountant.
4) Discipline:
Developers must register their projects with RERA before the marketing of the project
All project details must be updated quarterly on RERA website.
Project accounts must be annually audited by CA’s.
Brokers/agent also must be registered under RERA.
5) Compliance
In case of delay in project delivery, the developer will pay interest to the home buyers.
In case three payment defaults developer can terminate the agreement giving 15 days notice.
Complaint at the initial stage will be handled by the RERA authority and the disputes will be settled in 120 days.
All ongoing and upcoming projects need to get registered under RERA by 30th July 2017. During this period there will be less activity in the real estate market as most of the developers will be busy complying with new regulations. The implementation of RERA will definitely improve the transparency and timely delivery of the projects.
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