RERA: a boon for homebuyers making the home-purchase process safe and tension-free!
1. What is RERA?
The full form of RERA is the Real Estate Regulatory Authority. It aims toward protecting home buyers from unscrupulous builders. With an increased sense of protection, RERA has also boosted the extent of real estate investments. The unorganized real estate segment brought builders under the strict scrutiny of the State Governments. The bill of the Parliament of India Act was passed on the 10th of March 2016 by the Upper House, Rajya Sabha.
Importance of a RERA-approved residential project: RERA helps buyers gain trust in their builders as their money is not as risky on a RERA-approved property.
So, a RERA-approved residential project has these days become hygiene, especially for large-scale gated-community projects.
RERA aims at providing transparency and has a structure on ‘how to deal with any untoward issues’ with the project like project delays, pricing, quality of materials, etc.
This Act is all out to put the builders under strict regulation and scrutiny. Any builder not abiding by the RERA provisions for the state government can face strict action including jail time!
2. Notable benefits of RERA
- Standardized Carpet Area: Before RERA was introduced, the method by which a builder calculated the price of a project wasn’t defined in any way. However, with RERA there is now a standard formula that is used to calculate the carpet area of an apartment. This way, builders cannot provide high carpet areas to increase prices.
- No delay in Projects: Under the RERA Act, each real estate developer/ builder needs to give a delivery date for the handover of the possession of the flats. If the builder is not able to complete the project until the delivery date which was promised, then they will have to face defined penalties.
- Right to information: The developer is entitled to share all the details regarding the project such as plan layout, plan of execution, completion stages, the status of the competition, etc. This ensures the transparency of the project.
- Grievance issues: When and if the buyer/ purchaser, the promoter/ developer, or the agent has any issues with respect to the project, they can file an official complaint with the RERA department. If they aren’t pleased with the RERA’s decision, an official complaint can also be filed with the Appellate Tribunal.
- Advance payment: A builder cannot take more than 10% of the cost of the project from the purchaser as advance or booking fees. This saves the buyer from having to source funds fast and having to pay a large amount all at once.
- Buyer protected over false promises: Buyer has a right to sue the builder if promises are not kept. A buyer can even choose to withdraw from the project and get back entire money back with interest.
- Host of clearances needed by the builder before launch: A builder cannot launch a project unless all clearances are obtained, and every detail is disclosed. Only after a rigorous validation process does the builder get the clearances.
- Diversion of your funds NOT permitted: This prevents unauthorized use of your hard-earned money, and LATE delivery of projects is prevented, Money taken from you needs to be used for the purpose of constructing your home alone! A builder cannot cross-utilize funds as per their whims and fancies, The developer is required to deposit 70% of the funds received from the buyer into a special bank account called an escrow account. Money can be deducted as per stages of building, and duly approved by the builder’s engineer and accountant. This brings in accountability and the safety of your funds!
Real estate investment in Hyderabad has seen a rise after the introduction of the RERA act. Many new properties in Hyderabad are now being built which are all RERA registered.
With the RERA statute, trust, transparency, and investments in the real estate business have only gone up! Plus, a home buyer can opt for a hassle-free home loan, and purchase one’s dream home in a worry-free state of mind.
With RERA, a builder cannot get away with wrongful intentions and actions!
“It is wrong and immoral to seek to escape the consequences of one’s acts.”– Mahatma Gandhi
To know more about “Noteworthy Provisions Of RERA Telangana: A Must-Know For Home Buyers In Hyderabad!” Click here!