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How RERA is revolutionising the real estate scenario

The arrival of the Real Estate Regulatory Act (RERA) in March 2016 was meant to herald a homebuyer-friendly regime which will address their grievances and promote transparency, efficiency, financial discipline and accountability in the sector.

How RERA is revolutionising the real estate scenario
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Anuj Puri, Chairman — Anarock Property Consultants gives us an overview of 14 important guidelines incorporated in the RERA umbrella to prevent unscrupulous players from raining on consumers’ home-buying plans: 

Enforcing timely delivery of projects

In case of project delays, buyers have the right to — (i) Seek withdrawal of booking (the developer is liable to refund the entire amount along with interest) (ii) Go ahead with the project (with the condition that developer will pay interest for every month of delay until the property is ready for possession). The maximum time for refunding the buyer’s investment is within 45 days of it becoming due. 

Facility to check RERA registration number

All builders have to mandatorily register their projects under RERA with the respective state regulatory authority and obtain a registration number for every project. Without RERA registration, developers are not allowed to sell the project. The project details, construction progress, commencement/occupation and other certificates, sales details, etc. must be updated on the single-point information window i.e. RERA portal, at regular intervals. 

Financial safety via an escrow account

Homebuyers’ investments can be considered safe, as RERA obliges developers to deposit at least 70% of the buyers’ money received for a particular project into an escrow account. This prevents the developers from ‘rolling’ these funds into other projects.  

Ability to verify the builder’s track record

Buyers can now opt for properties only from reputed developers who are complying with RERA norms and have financial stability, which can be verified by buyers. 

Transparency in advertisement and marketing collaterals

Developers can now promote a project only after registering it with RERA. The unique RERA registration number must be published with every advertisement/brochure, or promotion. 

Clarity on carpet area

The conventional practice of charging homebuyers on basis of the super built-up area is gone. Under RERA, the quoted price has to be mandatorily based on the carpet area of the property. 

Strict norms on building changes

Around 2/3rd of the buyers’ consent in a particular project is necessary in case the developer intends to modify the building or layout plans/specifications/liabilities in the project. 

Facility to check payment plans

Homebuyers can do due diligence before opting for a particular payment plan. 

Booking amount cannot exceed 10%

Developers can only take 10% of the total property cost as a booking amount while the sale agreement is drafted at later stages. 

Brokers must be registered under RERA, too

Brokers are also liable for all deliverables committed by the developers they represent.

At long last, a reliable redressal mechanism

RERA provides a strong redressal mechanism to consumers by imposing a penalty on developers/brokers for any breach of obligation.  

Structural defects must be addressed

In case of issues within the building or apartment, such as inefficient plumbing, visible cracks, etc. in the initial five years after possession, developers are liable to rectify the defect in less than 30 days or else give compensation to the buyer. 

Availability of land title documents

Buyers can scrutinize documents related to a project’s land title ownership on the RERA website. 

Goodbye to soft/pre-launches

RERA has put a complete halt to soft launches, pre-launches. Speculators have now been pushed out and the market has turned extremely buyer-friendly.

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