RERA stands acronym for Real Estate Regulatory Authority came into existence as per the Real Estate (Regulation and Development) Act 2016. Every state and Union Territory must have its own regulator under RERA in tandem with the Centre’s regulations. According to the Ministry of Housing and Urban Affairs, 34 States/UTs have notified rules under RERA as of 09 January 2021.
RERA has several benefits for the homebuyers, the promoters, and the real estate agents. The key features of the acts are as under.
- All real estate projects must be registered with RERA so that the authority will have jurisdiction over the projects. The registration of a particular project can be rejected by the authority if guidelines have not been adhered to.
- There will be a single model sale agreement between all builders and homebuyers, ensuring greater uniformity
- A builder/developer cannot advertise, sell, build, invest, or book a plot without registering with the regulator. All the advertisement for investments after RERA registration should bear a unique project-wise registration number provided by RERA.
- Registration of the sale deed of a project unit cannot be done in the office of the sub-registrar without obtaining Occupancy Certificates or Completion Certificates.
- Under RERA, the carpet area is the net usable floor area of an apartment and includes the area covered by the internal partition walls of the apartment. As per RERA, the carpet area excludes the area covered by the external walls, along with areas under service shafts. This includes the balcony or verandah area and open terrace area. The promoter shall use a standard formula for the calculation of carpet area. This way, promoters cannot provide inflated carpet areas to increase prices.
- Builder cannot take more than 10% of the cost of the project from the buyer as advance or application fees. This saves the buyer from having to source funds fast and having to pay a large amount.
- The builder/developers have to deposit 70% of the funds raised need to be deposited in a separate bank account. These funds can be withdrawn only after certification by an engineer, a chartered accountant, and an architect. This rule stops the builders and developers from diverting the funds raised from the investors of a particular project to multiple projects being developed at the same time, thereby reducing the risk of insolvency of the builder.
- If there is any structural defects or problems in quality are noticed by the buyer within 5 years of possession, the builder has to rectify these damages within 30 days of receiving the intimation at no cost to the buyer.
- The builder/developer has to pay the interest to the buyer if the promoter delays possession of the property at the same rate the developer collects interest from the buyer for delayed payments as per the agreement. In other words, both parties have to pay the same amount of interest for the delay.
- If there is a mismatch in terms of what was promised by the builder and what has been delivered, the buyer is entitled to a full refund of the amount with interest for the amount paid by him.
- In case the buyer finds defects in the title deed of the property at the time of taking possession of the property, the buyer can claim compensation from the builder/developer, without any limit for the compensation amount.
- The buyer has the right to know all the details such as the layout plan, execution, and completion status of the project on which he has invested.
- In addition to RERA permission in writing, written consent from the two-thirds majority of the buyers is required if the developer wants to transfer or assign their rights and liabilities in a real estate project to a third party. The same rule applies to alterations or additions to the building plan.
- RERA compliance projects cannot offer discounts for early bird bookings and pre-launch offers.
- If the buyer, the promoter, or the agent has any complaints concerning the project, they can file a complaint with RERA. If they aren’t pleased with RERA’s decision, a complaint can also be filed with the Appellate Tribunal. No civil court will have any jurisdiction concerning any matter that comes under RERA or the Appellate Tribunal’s jurisdiction. As such, no court can grant an injunction about any action taken by RERA or the Tribunal.
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