The Real Estate business is in high demand! Common people invest a huge lot of money in real estate for getting their dream house. The real estate affairs are regulated under the Real Estate Regulatory Authority (RERA) Act, 2016.
RERA Act 2016
RERA stands for Real Estate Regulatory Authority which came into effect as per the Real Estate (Regulation and Development) Act, 2016. This Act aims to protect the home purchasers and consumers against any form of unfair means or malpractices by the realtors. This also boosts real estate investments. The Act was passed in the Parliament on March 10th, 2016 by the Rajya Sabha and came into effect from May 1st.
Features of Real Estate Regulation and Development (RERA)
- Security: Under the RERA Act, at least 70% of the buyers’ money will be stored in a separate account. The builders can utilise this money for construction purpose only and land-related costs. They cannot ask for more than 10% as advance payment before the sale agreement is closed.
- Transparency: All original documents have to be submitted by the builders for the projects they undertake. Builders cannot make any change to the plan without the buyer’s consent.
- Fair Policy: According to RERA’s instruction, developers and builders have to sell property based on the carpet area and not on the super built-up area. If the project is delayed, a buyer is entitled to be refunded with the entire invested money.
- Quality: The builder has to rectify any issue faced by the buyer within 5 years of purchase and that too, within 30 days of the complaint.
- Authorisation: A regulator can advertise, sell, build, invest, or book a plot after registering with the regulator with a unique registration number provided by RERA.
- RERA Jurisdiction: No civil court will have any jurisdiction related to any matter that comes under RERA or the Appellate Tribunal’s jurisdiction. As such, no court can make any interference with regards to any action taken by RERA or the Tribunal.
Benefits of RERA
RERA has provided many benefits for the buyer, the promoter, and the real estate agent. These include:
- Standardisation of carpet area
- Reducing the risk of insolvency of the builder
- Advance payment up to 10% only
- Special Rights to the buyer in case of any defects or false promises
- Interest to be paid in case of default
- Right to information
- Grievance Redressal and Consumer Complaints
Impact of RERA Act
After the Real Estate (Regulation and Development) Act, 2016 the registration and other formalities have become easier and simpler. Fewer projects are launched because builders cannot start multiple projects at a time. Dishonest builders will fail to sustain under the RERA regulations.
The implementation of RERA will be effective in the long run as it will strengthen the trust bridge between the builders and customers.