The Real Estate Regulation and Development Act (RERA) was implemented in India in 2016 by the government to motivate and advance the real estate sector. It is initiated to safeguard the interests of property investors and modulate the activity of the buyer and the seller under one regulatory central and standardized legislation. RERA was established to deal with project waiting periods, negligence, and inconsistency in standards and to enhance transparency and responsibility from builders and homebuyers.
What are RERA benefits for home buyers?
Initially, the real estate industry was highly unorganized and lacked discipline and order. The government intervened and formulated policies that would work in favor of both the parties- the builder and the buyer.
Encourages transparency in dealings:
The RERA Act ensures complete transparency in the information provided by the builder to the home buyer. The builder is responsible for notifying the buyer about each and every detail of the project. The builder should have all the necessary information printed on its marketing collateral, and the website should be updated from time to time on the development happening in the project. Clear and precise information about the plan layout, execution, and the stage-wise completion of the project should be communicated to the buyer.
No additional charge for excess area:
The implementation of RERA made sure that buyers didn’t have to pay for built-up and super-built-up areas. The builder can only charge for the carpet area of the home purchased, i.e., the area between the walls. Builders cannot charge buyers for the super built-up area, i.e., the area covered by external walls that comprise the elevator, the staircase, the hallway, the balcony, and other common spaces. Moreover, developers must inform the buyers of any discrepancies in the project layout or other structures.
No more project delays:
Under RERA, flat possession for buyers is of significant importance. A lot of real estate players have delayed the possession of projects in the past and have caused a lot of inconvenience to home buyers. But, with the implementation of RERA, it is not permitted now. Real estate builders are obliged to complete projects within the promised time frame. Builders who fail to comply with the rule are required to pay a hefty fine and could also end up in a possible jail term of 3 years for project delays.
Hand over of property in prim and proper form-
RERA also regulates property conditions to protect buyers from poorly constructed properties. The government now strongly stresses the quality of construction. Under RERA, the project should not highlight any structural defect for a minimum period of 5 years after giving possession of the property to the buyer. If the buyer finds any defect, it will be the responsibility of the builder to fix the defects without charging any additional amount. Furthermore, the flaw needs to be fixed within a period of 30 days from intimation.
Benefits of RERA to developers
Penalty on payment defaulters:
The RERA act penalizes the buyer for delayed installments, maintaining regularity from both ends. If the buyer causes incessant payment delays despite prior notice, RERA has made stringent rules to deal with such buyers. This empowers the developer to cancel the booking and refund the amount after debiting the booking amount and interest.
RERA protects not only the rights and interests of the buyers but also those of developers.
Making real estate an organized sector-
With the introduction of RERA, a lot of positive changes have come to real estate. It has become transparent, and it promotes better business for the builders and developers in the long run. It is easy to do business with fair practices, and each concern now has a governing body.
More demand for housing-
With the RERA Act being followed meticulously, there has been a stir in the real estate sector. It encourages the consumption of unsold housing units in all parts of the country. Buyers are confident of their rights in purchasing the property. Re-established honesty and organization of the real estate market encourage genuine developers to identify and cater to their target audience and generate sales.
Commonly asked questions
An RERA certificate is a document that states that the builder has registered the property under the RERA Act and will comply with all the rules and regulations mentioned in it.
Purchasing a flat that is not registered with RERA can lead to several risks for the buyer. Without RERA registration, regulatory supervision does not exist, which could lead to disputation, hindrance, or even fraud. Therefore, it is advisable to purchase a property that is RERA-registered.
RERA registration of the project ensures consumer protection. It promotes transparency, answerability, and reporting to the buyers at all steps. RERA is important in real estate as it establishes a foundation for fair practices, counteracting fraudulent activities, and giving closure for raised grievances.
It has become mandatory for developers to register their projects under RERA, thus making comprehensive details regarding layouts, approvals, licenses, timelines, and other important information always accessible to the buyer. With RERA’s inclusion, buyers have more trust in real estate players.
