What Is R.E.R.A?
For a long time, builders and developers benefited from an uncontrolled real estate market. Homebuyers are responsible for covering all costs, including delayed possession and significant losses due to project cancellation.
Even worse, after ten or more years of residence, residents may have to leave the community as a result of the builder's error in failing to obtain official approval for the project in question.
How R.E.R.A. Helps Their Customer
And even after all of this, if a property buyer files a case for any of these malpractices, it used to take years to receive a verdict. But now that the Real Estate Regulatory Act, of 2016 has gone into effect, this industry is more accountable and fair.
The goal of this is to make real estate transactions between buyers and sellers more equal and fair. It is expected that the Real Estate (Regulation and Development) Act will guarantee that developers will not cheat customers or mislead them.
After the act of 2016 now builders can not build or cut any type of society without getting their R.E.R.A. Account and ID.
- Thus, we will see how RERA will help us in many ways. But first, let's examine all the problems and unfair conduct that real estate brokers and builders engage in.
- Project completion delay.
- Use false data to confuse purchasers.
- Transfer money to another project or use it for something else.
- Provide exclusive pre-booking prices.
- Maintaining The agreement's date of possession clause is unfilled.
- Modifying the project's progress without permission.
The Full Form of R.E.R.A.
R.E.R.A. stands for Real Estate Regulatory Authority, which came into existence in 2016.
Some R.E.R.A. Rules Investors Should Know
1. Project registration with RERA: To improve transparency in project marketing and execution, RERA requires all commercial and residential real estate projects with land larger than 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) before project launch. The builders or developers must make public all the information, including approved plans, layouts, the project's location with a clear land demarcation, carpet area, parking number, and area, etc.
Therefore, RERA will help in the prevention of malpractices by requiring builders to obtain all necessary approvals before they can market or sell any real estate. Therefore, you can verify all project details online before to signing a contract by visiting the relevant state's RERA website and selecting the registration page.
2. Standardization of Sale Agreements: In the past, the format of the sale agreement punished home buyers for any default, while promoter defaults of a comparable nature were not punished. However, in order to guarantee equity and shield purchasers from a range of fines and costs, a common model sale agreement must now be signed by promoters and homebuyers in accordance with RERA regulations. The specifics of the project, such as the building and apartment construction, specifications, internal and external development works, the date of the apartment, plot, or building's handover of possession, etc., must all be included in the sale agreement.
3. Area Covered by Carpet: Three methods are commonly used to calculate a property's area: carpet area, built-up area, and super built-up area in the case of floor house and flat house. As a result, there may be a large discrepancy between what a buyer spends and what he receives when purchasing a property. However, as of right moment, developers must show the size of their flats based on the carpet area, or the space enclosed by four walls. This covers areas that can be used, such as the restrooms and kitchen.
4. Giving homebuyers misleading information: You have the right to request a refund of funds if you paid in advance for a project based on misleading information provided to you in an advertisement or prospectus. Additionally, the builder will be required to pay a penalty that might equal up to 5% of the property's cost if you decide to move forward with the project.
5. Defect liability period of five years: Under RERA, the developer will cover the cost of repairing any structural flaws or poor craftsmanship for a period of five years. Therefore, you can hold the developer or builder accountable for any sub-quality concerns and demand that they be fixed or compensated for if a defect in the quality employed in the construction of the home is discovered.
6. RERA Authorities' Role: The implementation and enforcement of RERA laws are the responsibility of individual RERA authorities in each state of India. In its capacity as a regulatory body, the RERA authority upholds legal compliance, settles disagreements, and imposes sanctions for non-compliance.
7. Security: According to the RERA Act, a minimum of 70% of the funds belonging to investors and buyers must be placed into a designated account. The builders will then receive the remaining 70%, which will be used exclusively for land-related and construction-related costs. Before the sale contract is signed, developers and builders are not permitted to demand more than 10% as an advance payment on the property.
8. Grievance Redressal: The buyer, the promoter, or the agent may register a complaint with RERA if they have any grievances regarding the project. They can also file a complaint with the Appellate Tribunal if they disagree with RERA's ruling.
9. RERA's advantages for homebuyers: For Indian homebuyers, RERA offers many benefits. By guaranteeing that developers reveal accurate and trustworthy information about their projects, it increases transparency. Timelines, financial documents, and comprehensive project plans are all accessible to homebuyers. Additionally, RERA adds safeguards against protracted waiting times for homeowners by addressing project completion delays.
10. Enhanced Investor Confidence: As a result of growing investor and buyer confidence in the real estate market, more money is being invested in RERA-compliant projects. They can now invest with confidence after reviewing the RERA project specifics.
Some Salient Features Of R.E.R.A.
- Every Indian state should establish a Real Estate Regulatory Authority to oversee, decide, and arbitrate any disputes about real estate projects in that state.
- Development of a quick-resolution dispute resolution process. An appeal tribunal and specialized adjudicating personnel will be used for this.
- For the RERA to have jurisdiction over real estate projects, all projects must be registered with the organization. If regulations are not followed, the authority has the right to refuse a project's registration.
- A promoter needs a signed agreement of two-thirds of the allottees in addition to the written approval of RERA if they want to assign or transfer a lot of their rights and obligations in a real estate project to a third party.
- Both the promoter and the buyer will be required to pay the same amount of interest in the event of a default.
- The promoter shall reimburse the buyer for any losses incurred by the latter as a result of third parties claiming ownership of property (faulty land titles) that is being built or has already been built. As of now, no legal restriction exists regarding the amount of compensation.
How To File a Complaint To R.E.R.A. Authority against Builder
We are hopeful that the new law will safeguard our interests after RERA goes into effect. The most crucial query, though, is how to submit a case or a complaint under the new RERA regulations.
Therefore, certain forms and processes that must be followed have been described by each state concerning this. Alternatively, the application may be submitted online in the supported format. The following information must be provided by the complainant to file a complaint:
- Specifics about the respondent and the applicant.
- The project's registration number and address.
- A succinct summary of the evidence and the basis for the assertion.
The form needs to be completed before sending it to the adjudicating official or the Real Estate Regulatory Authority.
Conclusion:
Regarding developers who copy ideas, RERA is a major improvement. Neither regulations nor laws had been put in place up until this point. The primary reasons behind the creation of the RERA ACT, 2016, were delays in project delivery, subpar building materials, and periodic modifications to approved plans.
But this industry still has a lot of gaps in it, even with RERA. As an illustration, it is possible that you signed a paper in error authorizing changes to the project or agreement. For all parties, RERA is only a process designed to ensure justice. You should therefore constantly use caution and enter into contracts only after doing your research.