The real estate (regulation and development) Act or RERA Act was started on 1 May 2016. The principal motive of the Act was to set up the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to make sure that the sale of plots, residences, or homes in an efficient and transparent manner.
Further, the Act was enacted to guard the interest of real estate consumers and to set up a mechanism for quick redressal to disputes.
As India strengthens its position as a main participant in the international market, industries and companies have witnessed significant growth, which similarly has contributed to the steep rise in the actual property prices. In order to govern the growing real estate rate and to shield the interest of the home buyers, authorities have set up RERA or Real Estate (Regulation and Development) Act in 2016 that controls and monitors the actual estate sector throughout the states.
What is RERA Act?
RERA stands for Real Estate Regulatory Authority and started in 2016. The Real Estate (Regulation and Development) Act, 2016 focuses to shield home customers and raise funding in the real estate sector. The Real Estate Regulatory Authority (RERA) Act is enforced in each state to modify the real estate sector and also enable rapid and efficient dispute rectification.
As per the RERA Act, it will become essential for all residential and industrial real estate projects wherein the land is over 500 square meters to register with the Real Estate Regulatory Authority (RERA) for the launch of any project. This registration enables creating better transparency in the execution of launched initiatives.
Under the Sec 84 of the RERA Act, it states that within six months of the RERA Act being enforced, State Governments shall make guidelines for carrying out the provisions of the Act.
Benefits of the RERA Act:
Here are few ways in which buyers are likely to benefit from the RERA Act:
1. Builders won’t be able to delay the projects:
Under RERA, not being capable of getting ownership of a home from the builder won’t be a hassle anymore. If developers miss the delivery deadline, they must pay house buyers an interest rate 2% higher than State Bank of India’s lending price. Simultaneously, there is also a possibility of imprisonment of up to a few years.
2. Builders won’t be able to charge for the excess area:
Earlier, builders used to charge for the constructed and outstanding area. This means if the client paid for 1,300 sq.ft., they could be able to use the carpet area of around 900 to 1,000 sq. ft. For apartment buyers, carpet area offers a precise measurement of the living space they’re paying for, free from inflated figures based on non-usable areas. RERA rewrites the rules of the game! Instead of the inflated super built-up area, developers must now base property prices and offers solely on the ‘carpet area.’ Additionally, builders will even require the consent of two-thirds of the consumers in a venture earlier than changing the project’s layout or another structure.
3. Grievances will be resolved addressed and solved quickly
Under RERA, regulatory bodies and appellate tribunals will be set up in every state to resolve builder-consumer disputes. Moreover, any individual aggrieved by any direction can assume a resolution from the appellate within 120 days.
4. Builders will be held responsible for any defect in the construction
The first-rate of development has been a subject for plenty of buyers. Under RERA, any structural defect that takes area to the property for as much as 5 years from the date of delivering ownership will be repaired through the developer. It will be the obligation of the promoter to rectify such defects within 30 days without further charge.
5. No more false promotions. What you see is what you will get
Earlier many builders promoted their initiatives with fake commitments and offers. However, under RERA every commercial will have to deliver the RERA registration number, and all of the promotions or classified ads will have to be completely honest without any fake commitments.
Eligibility of RERA
According to the RERA rules, to be eligible to apply, the following documents and statistics should be offered by the builder:
- PAN card
- Balance sheet and final 3 years’ income tax returns
- Details about the carpet area, parking area, and number of floors of the apartment
- Documents to show the legal right at the land
- Information approximately the land, which incorporates title, rights, and mortgage
- Consent letter of the landowner in case the builder does not own it
- Details about the project, which encompass layout, sanctioned plan, and location
- Finally, information of the engineer, architect, and every other concerned professional
How to register projects under RERA
- Authenticated copy of all approvals, commencement certificate, sanctioned plan, format plan, specification, plan of improvement work, proposed facilities, Proforma allotment letter, agreement on the market, and conveyance deed to receive when
- Applying for venture registration with RERA.
- Mandatory registration of recent and current tasks with RERA earlier than launch.
- Registration of agents with RERA.
- Dispute resolution within 6 months at RERA and RERA appellate tribunals.
- Separate registration of various levels of a single project.
- Developers to share information of projects released in last five years with status and cause for the delay with RERA.
- Timely updating of RERA website.
- Maximum 1 yr extension in case of delay because of no fault of the developer.
- Annual audit of undertaking debts through a CA.
- Conveyance deed for common area in favor of RWA.
- Construction and land name insurance.
- Lastly, project completion time period.
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