The Real Estate Regulatory Authority or RERA came into existence as per the Real Estate (Regulation and Development) Act, 2016 which aims to protect home buyers while also helping boost investments in the real estate sector. It consists of 10 chapters covering 92 sections.
RERA has a range of benefits for all the stakeholders involved including the real estate agent, the promoter, and the buyer. These include:
- Standardization of carpet area: Previously, the method of calculating the price of the project by the builder wasn’t defined. However, with RERA, we now have a standard formula that is used to calculate carpet area thereby preventing promoters from providing inflated carpet areas to increase prices.
- Reducing the risk of insolvency of the builder: Most promoters and developers have multiple projects that they are handling at once. Earlier, developers were allowed to move funds raised from one project to that of another but this isn’t possible with RERA since 70% of the funds raised need to be deposited in a separate bank account. These funds can be withdrawn only after certification by an engineer, an architect, and a chartered accountant.
- Advance payment: According to the rules, a builder can take a maximum of 10% of the cost of the project from the buyer in advance. This saves the buyer from the stress of having to source funds quickly and having to pay a huge amount.
- Rights to the buyer in case of any defects: If there are any structural problems or defects in quality within 5 years of possession, the builder will have to rectify them for free within 30 days.
- Interest to be paid in case of default: Previously, if the delay in possession was caused by the promoter, the interest paid to the buyer was much lower than if the delay was caused by the buyer. RERA reformed this such that both parties have to pay the same amount of interest.
- Buyer’s rights in case of false promises: In case of a mismatch in terms of what has been delivered and what was promised by the builder, the buyer is entitled to a full refund of the advance amount. In some cases, the builder may have to provide interest on the amount too.
- If defect in title: At the time of possession, if the buyer discovers a defect in the title of the property, he is entitled to claim compensation from the promoter. This compensation amount has no limit.
- Right to information: The buyer has the right to know any and all information pertaining to the project including completion status, plans related to the layout, and execution process.
- Grievance Redressal: If the promoter, agent, or buyer has any complaints with respect to the project, they are free to file a complaint with RERA. In case they aren’t satisfied with RERA’s decision, the complaint can be raised with the Appellate Tribunal.