What is RERA and How it will Help Home Buyers
Jun 03, 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. Under RERA Act every state and Union Territory will have its own regulatory authority who will frame regulations and rules as per the Act.
Below are the 12 key points from Real Estate Regulation Act:
The Act has been formulated by Govt. Of India, however, there is a flexibility given to States to modify/add their own rules.
As of now, only 6 states have formulated the RERA act which includes Odisha, Bihar, Andhra Pradesh, Madhya Pradesh, Gujrat and Uttar Pradesh. Other states will become the part of this Act soon.
RERA protects the buyers from the real estate projects by maintaining the transparency amongst buyer and real estate developers.
Under RERA act all real estate projects must be registered with the State Real Regulatory Authority by 30th July 2017 and then only they would come under the scope of RERA act.
Real estate developers must deposit 70 percent of the funds collected from the buyers in a separate bank account for the projects and this fund can be only used for the construction purpose of the project to provide timely completion.
All projects must obtain all approvals before the launch of the project. Till now developers were cheating buyers by saying all approvals are in “Closure” stage. Now if the developers pass such false statements, then they may end paying the penalty including imprisonment.
If any structural change needs to be done by the developers after the start of the project, then they have to take consent from at least 2/3rd of the buyer's consent.
Any delay in the project delivery would also attract a penalty, including imprisonment of 3 years.
All project details and construction updates must be regularly furnished on the Real estate Regulator website.
Even after the possession till 5 years promoter/developer has to rectify the defects without asking for any extra charge from the buyer.
If there is any delay in the possession dates then the developer has to pay an interest of 2 percent above the lending rate from the financial institutions to the buyer.
Till now developer was selling the project on the basis of the super built area however as per the RERA guidelines projects can be sold only on carpet area which buyer can use. In case of any discrepancy, defaulter would be entitled to the imprisonment of 3 years.Real estate experts feel that RERA Act would bring more transparency between buyers, developers and agents.Real estate sector contributes 9 percent growth towards India’s GDP and this would definitely shoot the investments in the real estate industry.
Below are the 12 key points from Real Estate Regulation Act:
The Act has been formulated by Govt. Of India, however, there is a flexibility given to States to modify/add their own rules.
As of now, only 6 states have formulated the RERA act which includes Odisha, Bihar, Andhra Pradesh, Madhya Pradesh, Gujrat and Uttar Pradesh. Other states will become the part of this Act soon.
RERA protects the buyers from the real estate projects by maintaining the transparency amongst buyer and real estate developers.
Under RERA act all real estate projects must be registered with the State Real Regulatory Authority by 30th July 2017 and then only they would come under the scope of RERA act.
Real estate developers must deposit 70 percent of the funds collected from the buyers in a separate bank account for the projects and this fund can be only used for the construction purpose of the project to provide timely completion.
All projects must obtain all approvals before the launch of the project. Till now developers were cheating buyers by saying all approvals are in “Closure” stage. Now if the developers pass such false statements, then they may end paying the penalty including imprisonment.
If any structural change needs to be done by the developers after the start of the project, then they have to take consent from at least 2/3rd of the buyer's consent.
Any delay in the project delivery would also attract a penalty, including imprisonment of 3 years.
All project details and construction updates must be regularly furnished on the Real estate Regulator website.
Even after the possession till 5 years promoter/developer has to rectify the defects without asking for any extra charge from the buyer.
If there is any delay in the possession dates then the developer has to pay an interest of 2 percent above the lending rate from the financial institutions to the buyer.
Till now developer was selling the project on the basis of the super built area however as per the RERA guidelines projects can be sold only on carpet area which buyer can use. In case of any discrepancy, defaulter would be entitled to the imprisonment of 3 years.Real estate experts feel that RERA Act would bring more transparency between buyers, developers and agents.Real estate sector contributes 9 percent growth towards India’s GDP and this would definitely shoot the investments in the real estate industry.
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