The real estate industry is a vast ocean with home buyers trying to find the perfect anchorage from time immemorial. It has always been ruled...
The real estate industry is a vast ocean with home buyers trying to find the perfect anchorage from time immemorial. It has always been ruled by gigantic corporate waves and the end buyers were always left to face the storm. But, not anymore, since the inception of RERA (Real Estate Regulatory Authority) which is the by-product of the RERA Act or The Real Estate (Regulation and Development) Act, 2016, it has brought the much-needed relief to property buyers across the country.
What is RERA?
RERA is the regulatory body formed to monitor the real estate industry especially for guarding the interests of home buyers. The RERA Act was passed by the Rajya Sabha on 10th March 2016 and by the Lok Sabha on 15th March 2016. The Act came into force partially on 1st May 2016 and the remaining provisions came into force on 1st May 2017. The Indian government formulated the RERA Act in real estate to safeguard the property buyers by making the industry more transparent to bring in more investments from the private sector.
The need for RERA?
The RERA Act in real estate is being referred to as the new silver linings, especially for home buyers. Earlier, the real estate industry was heavily in favor of the builders and without the presence of a regulatory body, there were no standard norms and most of the builders had their own set of rules and regulations which was mostly in their favor.
Advantages of RERA?
Standardization of Carpet Area – One of the most prominent aspects of RERA is to bring in the standard method of calculating the carpet area which was done earlier as per the builder’s comfort. Now, all the builders calculate in accordance with the laws laid down by the government which brings into play standard property rates across the country.
The interest rate on the Default payment – RERA has ensured that now the builders will also pay interest in case of delayed possession. Earlier, the buyers had to pay interest in case of late payments and the interests paid by builders were comparatively lower or almost negligible, which has clearly changed now as RERA has clearly specified that the interests will be the same for both parties.
Builder’s insolvency or Bankruptcy – Due to a large number of projects in construction simultaneously, builders used to withdraw or drop off a project in case of fund shortages earlier. However, according to RERA, a builder will now have to deposit a minimum of 70 percent of the amount realized for the project to a separate bank account ensuring the investments of buyers.
Buyer’s Right in case of false promises – If the buyer is not satisfied or finds any false claims made by the builder which is missing in the final product, he or she is entitled to a full refund of the amount paid as advance along with interests and the claimed compensation if any.
Advance Payment – This is one of the most important features of the RERA Act which restricts a builder from taking more than 10 percent of the property rate in advance. Only after entering into the Agreement of Sale, the builder can ask for any additional charges.
Buyer’s Right in case of the defect after possession – In case the buyer finds any defect in quality, service, provision or workmanship up to 5 years from the date of possession, the builder is liable to rectify those complaints within 30 days at no extra cost.
The last two years have witnessed a massive change in the overall working of the real estate industry which has seen a surge in the real estate market. The prime objective of RERA has come off nicely in the initial stages and it seems that the future of the real estate industry is moving in the right direction.
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