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What RERA (Real Estate Regulation and Development Act) Actually is?
May 18, 2017 Real Estate News
After almost eight years of being proposed RERA was passed as an act this year, bringing a huge relief to the buyers and the developers as well. Undoubtedly, RERA is one of the biggest reforms in the real estate sector.
We discuss what exactly RERA holds for the benefit of buyers
1. Compulsory registration of the of all the real estate projects with the plot size of more than 500 sq. meter with the regulator. The developers will have to share the project plans, the status of the development, status of the approvals, name and address of the real estate agents, contractors, architects etc.
2. All the information regarding the development of the project will have to be shared with the regulator to update on the website.
3. A clear number of sold and unsold property will have to be shared with the regulator.
4. Only 10 percent of the property value can take as an advance from the builder while signing the builder- buyer agreement.
5. Also, the Act makes it mandatory for the developers to open an escrow account for each project and 70 percent of the revenue collected from the buyer will have to be deposited in it.
6. The developer can only sell the property based on the carpet area. This will help buyers to understand how much are they paying for per sq. ft.
7. If the project is stalled in between for any reason, the developer will have to pay back the entire amount to the buyer.
8. If there is any delay in the project, the developer is obligated to pay the monthly interest as a penalty to the buyer.
9. The Act also aims to provide faster resolution to the property disputes providing relief to the owners
.
10. If there is any delay in payment from the buyer, then the developer is free to slap interest charges on the buyer and in extreme cases end the agreement.
Buyers have been exploited by the developers for years and this Act hopes to keep the balance between the builder and the buyer and restore the trust. This Act will kick out the unreliable developers from the market and only the ones with reputation and those who can keep the promise of delivering the property on time will remain. This act will also bring more genuine buyers. Since there has been a slow down in the real estate market in recent times, this act is expected to revive the market as more buyer will now be interested in investing in real estate.
We discuss what exactly RERA holds for the benefit of buyers
1. Compulsory registration of the of all the real estate projects with the plot size of more than 500 sq. meter with the regulator. The developers will have to share the project plans, the status of the development, status of the approvals, name and address of the real estate agents, contractors, architects etc.
2. All the information regarding the development of the project will have to be shared with the regulator to update on the website.
3. A clear number of sold and unsold property will have to be shared with the regulator.
4. Only 10 percent of the property value can take as an advance from the builder while signing the builder- buyer agreement.
5. Also, the Act makes it mandatory for the developers to open an escrow account for each project and 70 percent of the revenue collected from the buyer will have to be deposited in it.
6. The developer can only sell the property based on the carpet area. This will help buyers to understand how much are they paying for per sq. ft.
7. If the project is stalled in between for any reason, the developer will have to pay back the entire amount to the buyer.
8. If there is any delay in the project, the developer is obligated to pay the monthly interest as a penalty to the buyer.
9. The Act also aims to provide faster resolution to the property disputes providing relief to the owners
.
10. If there is any delay in payment from the buyer, then the developer is free to slap interest charges on the buyer and in extreme cases end the agreement.
Buyers have been exploited by the developers for years and this Act hopes to keep the balance between the builder and the buyer and restore the trust. This Act will kick out the unreliable developers from the market and only the ones with reputation and those who can keep the promise of delivering the property on time will remain. This act will also bring more genuine buyers. Since there has been a slow down in the real estate market in recent times, this act is expected to revive the market as more buyer will now be interested in investing in real estate.
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