RERA

A Comprehensive Guide to RERA

Posted by

Many of us would have a dream of buying our own luxurious home at least at some point of
time during our lives. However, fulfilling our wish is a very tedious task as there exists a
mammoth amount of procedures that has to be followed and executed when it comes to real
estate division.

Allocating the required funds, choosing the suitable area after thorough
surveys, contacting the sellers, the document verification and above all the mere tension of
timely possession of the property is one of the most agonising stages in the whole process of
purchase.

RERA
In addition to this, we, that is, the buyers would, at times, have absolutely no clue as to what
is the exact size of the property and there is no guarantee that we would get all the facilities
that were promised to us at the initial stages. At times, we wonder when the atrocity of taking
people like us for a ride would stop in the real estate sector.
Well, the list of cheating innocent buyers does not even stop here. It goes to the extent of the
sellers accepting black money or even worse they just disappear after getting hold of the
money!

RERA
Agreed that there are numerous consumer protection laws that are in place but none of them
actually prevent such incidents from happening. With the exponential increase of fraud in the
real estate sector by day, it becomes mandatory for stringent laws and acts to be in place.
Hence, after much speculation and anticipation of buyers, RERA (Real Estate Regulatory
Authority) was brought into full force on May 1, 2017.
Many folks may be wondering as to what exactly is this RERA? For them, the answer lies
below:

RERA: What is it? And why is it needed?
Lack in professionalism and organisation in the real sector has taken a huge toll on its overall
growth and rise.
RERA, a body that is formulated by the Government of India, to ensure that there is a clear
level of openness and transparency between the home buyers and real estate
agents/developers. It is an extremely useful act for home buyers who have been cheated by
the real estate agents. Once its rules have been clearly understood, it is a boon for the
common man.

The law aims at establishing clear cut fair practises that would ensure that the buyer’s
interests are protected along with severe penalty in case of cheaters and defaulters.
RERA is a body that has been designed by the central government but its implementation and
execution is specific to each state in the country as it is very obvious that the property
belongs to the state.

Salient Features of RERA:

1) Protect the integrity and interest of genuine buyers.
2) Lay down fair and transparent practises to reduce the occurrence of fraudulent
activities.
3) Smooth flow of information between the buyers and developers/agents.
4) In case of issues, have an efficient and quick defence system in place to handle.
5) Authorize the home buyers and developers with certain responsibilities so that they
can also be accountable and responsible.
6) Lastly, contribute the overall growth of the real estate sector with a well-structured
and organised system in place.

RERA

RERA – Existing in all States?
After continuous follow ups and enquiries by the central government, only one third of
the Indian states are somewhat serious about implementing RERA. These do not include
the Union territories as they by default come under the scanner of the central government.
Despite the fact that the states are given the flexibility to modify the laws, only
Maharashtra, Kerala, Madhya Pradesh, Gujrat, Odisha, Rajasthan, Uttar Pradesh and
Bihar are kind of ready to go ahead with RERA.

RERA Impact on Home Buyers
1. RERA wants all states to have authoritative bodies in place so as to resolve issues
within a time frame of 120 days between the buyer and promoter.
2. As per the RERA, the developers cannot demand more than 10% of the total
project cost from the buyers as advance booking payment prior to registration.
3.Developers need to submit the total costs, the project details, the project layout,
milestones in delivery and sale agreement to the administrative authorities.
4. Developers need to transfer 70% of the buyer’s money into another account. This
is to ensure that the money is not used for the construction of other projects. In
order to use this money, the promoters would need the approval from chartered
accountants and respective engineers.
5. In case the builder fails to meet the deadlines specified in the document, he is
entitled to return the entire amount to the buyer that is in accordance with the
interest rate mentioned in the document at the time of registration. If the buyer
does not wish to take the refund, then the builder needs to pay up for each delayed
month till the time the project is handed over.
6. The buyer needs to pay only for the carpet area which basically implies the
specified area within the walls. He is not accountable for any other built up area.
7. The time period for fixing up structural defects has been extended to 5 years for
the developers.

8. Lastly, be it the promoter, the developer or the agents, all of them need to register
with the administrative body prior to the launch of their respective projects.
RERA Impact on Builders

Many folks might not be aware that the builders are also benefitted by the act as the
builders can penalise the allottees in case they fail to pay the dues on time. Just as the
buyer can approach the governing body at any point of time, the builders are also free
to do the same in case of any emergencies or difficulties.

RERA

All said and done the builders have to register with the government and obtain a
unique registration number, failing which they would not be given the permission to
market their projects.

Other Countries Unlike in India, United States has a string of regulatory bodies in place in order to
protect the interests of the end consumer. Stringent laws are also in place in case the
developers fail to meet the deadlines or even fail to hand over the property to the
customer.

They can even be taken to court for the withdrawal of contract.
In United Kingdom, the setup is slightly different as there is no governing body. The
Financial Services Authority which has now collaborated with the Bank of England
takes care of the real estate sector.

Though the RERA is an act that has been formulated by the central government, the
state authorities should ensure that the laws do not get liquated. If this happens, the
central government should take responsibility and involve themselves. Hope this ray
of hope proves successful for innocent buyers thereby reducing their burden of
running behind their promoters, builders or agents!

Leave a Reply

Your email address will not be published. Required fields are marked *