Are you looking to buy a new home or apartment? Before signing on the dotted line, buyers must know their rights and legal responsibilities when purchasing a RERA approved project property. The Real Estate Regulation & Development Act (RERA) the Indian government enacted in 2016 to protect consumers from unfair business practices, providing transparency within real estate transactions and increasing accountability. The below-mentioned section will explain in detail how RERA benefits both gullible buyers and savvy investors in the long run.
What is RERA –The Real Estate (Regulation and Development) act.
The Real Estate (Regulation and Development) Act, 2016 (RERA) is a legislative act that regulates the sale of real estate in India. It seeks to protect the rights of consumers by ensuring transparency and accountability from builders and developers, as well as providing timely redressal for grievances.
Implementing RERA has strengthened:
i) consumer confidence in the Indian real estate market
ii) allowing for better regulation of projects
iii) improved customer service
iv) increased credibility
v) credibility and protection for all buyers
vi) and more transparent pricing structures.
Further, it also seeks to boost investment within the sector by promoting responsible development practices and increasing buyer confidence.
How does RERA benefit Buyers?
1. Increased Transparency:
The Act ensures that developers provide complete and accurate information about the project, such as –
i) details of floors
ii) carpet area
iii) registration of projects, etc., which bolsters transparency in real estate transactions.
2. Timely Possession & Handover:
Developers are now required to adhere to a predetermined timeline for the completion of projects. If they fail to do so, they may be subject to stringent penalties or even imprisonment. This helps protect buyers from delayed possession of their property.
3. Protection Against Frauds:
By making it mandatory for all developers to register their ongoing projects with the Regulatory Authority (RERA), the Act prevents fraudulently produced sale documents and false promises by builders or agents.
4. Right to Information:
Buyers now enjoy the right to information regarding the progress of their projects, which is legally binding on developers. In addition, buyers have access to all relevant documents, such as title deeds and building plans, before they commit themselves to a purchase.
5. Home Loan Availability:
Banks are now more willing to finance RERA-registered projects since they have greater assurance that the project will be completed in line with the prescribed timelines and regulations.
6. Standardized Payment System:
The Act has made it compulsory for developers to create an escrow account for every real estate project, where 70 percent of the collected funds must be used solely for construction purposes. This prevents misuse of monies paid by buyers or investors into these accounts.
7. Protection from Unjustified Price Hikes:
The Act prevents developers from raising prices arbitrarily and without valid justification.
8. Dispute Resolution:
RERA provides an efficient dispute resolution mechanism if any disagreement or claim arises between a buyer and a developer.
9. Consumer Protection:
Buyers now know that their rights are protected by law under the Real Estate Regulatory Act. This includes the right to timely information and compensation in case of any contract breach on the developer’s part.
10. Assured Quality & Safety Standards:
Developers must now construct properties per pre-approved plans, specifications, and safety standards, ensuring buyers get what they pay for. In addition, RERA holds developers liable for defects in construction or materials for up to five years after possession.
All these advantages of the RERA Act make it beneficial for property buyers in India, ensuring greater consumer protection and a more secure real estate market. With the enactment of this Act, buyers can now invest more confidently in the Indian real estate sector.
What are the objectives of RERA?
The objectives of the Real Estate (Regulation and Development) Act, 2016 (RERA) are to:
– Establish a unified regulatory environment for the real estate sector.
– Ensure that all stakeholders in the sector comply with fair practices and transparency.
– Provide better protection to home buyers against unscrupulous developers.
– Encourage healthy competition among developers by bringing transparency into their business activities.
– Build confidence among investors in the real estate sector to promote further investments.
– Facilitate speedy dispute resolution through various mechanisms such as adjudication tribunals and fast-track courts.
– Create a standardized set of rules applicable throughout India while allowing flexibility to States and Union territories to make their own rules.
– Strengthen the enforcement of contracts and legal processes related to real estate transactions.
– Promote healthy and sustainable development that is in line with the needs of society.
By achieving these objectives, RERA will promote growth and development in the sector while ensuring consumer protection. It will also create an atmosphere of trust and confidence for all stakeholders involved in real estate transactions.
RERA has been in force for only a few years, but it has profoundly impacted the Indian real estate landscape. By protecting buyers and setting up clear guidelines for developers, RERA has helped to create a more transparent and buyer-friendly environment in the world of Indian real estate. If you’re considering buying property in India, research your state’s RERA rules and regulations to be as informed as possible before making such an important purchase.