RERA is the abbreviation for real estate regulation act, which is a revolutionary and much appreciable initiative by the government. Enacted in 2016, RERA aims to ease the burden on the buyer. It would not be wrong to say that RERA is an act made to protect the buyer in real estate domain while being completely buyer-centric.
It also promises to impose significant penalties on errant builders. Though the real estate regulation act was passed last year in May 2016 by the Union Ministry of Housing and Urban poverty alleviation it took almost a year to formulate rules and illustrate the functionality of the act.
So, if you are planning to buy a house, is there anything else that you need to know? Is there a must-read list that you need to check out? Or have you been missing out on some of the important information? If you are planning to buy a house after May 1, 2017, keep your eyes open to the new RERA Act, as it might help you stay vigilant about your rights.
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What is RERA? Here is what you need to know about the act
RERA is an act for the real estate sector that has been implemented on May 1, 2017. According to this act, each state and union territory is supposed to have its own set of regulations along with a regular who will be governed by this set of regulations. The central government has already cleared the guidelines for the act for different union territories including the national capital, Delhi. Under this act, it becomes mandatory for the builders to deposit 70 percent of the collected amount in an escrow amount. This has been done to make sure that the money collected from one project or property is not redirected to another property. There is also a strict mechanism if the builder does not adhere to the rules and regulations.
The implementation of RERA has led to many benefits for the buyers. The escrow amount coming to the rescue that basically ensures that the buyer’s money is not being used by the builder for investment to some other project. Also, remember when buyers used to get a 900- 1000 sq.ft plot when they paid for a 1300 sq.ft plot, as the rest was covered up by balconies and common spaces? RERA aims to abolish this practice as a buyer now has to pay only for the area within the walls that is also known as the carpet area.
These are a must to know if you are planning to buy a house after May 1st of 2017 so that you are not at the risk of being cheated or involved in any fraud practiced by the errant builders.
Under RERA, it is mandatory for all developers to register themselves along with their ongoing projects with the regulatory authority. They must also upload the project details on the RERA website. The buyer should make sure that the developer is registered on the RERA website before buying the house.
The buyer must enquire about the financial stability of the developer and must go with known names who have shown experience in real estate. Every advertisement must carry a RERA number. The buyer needs to make sure that the developer does not promote a project without getting it registered on the RERA website.
It is also necessary to ask the developer about the proper declaration of the time period by which the project will be completed along with an affidavit that mentions the rate of interest and date of possession in it. Also, valid documents of the land and construction of the property is a must.
The buyer must know and must be able to differentiate between the super built-up area and the carpet area, which is basically the area within the walls. Since RERA allows the buyer to only pay for the carpet area, knowledge of this would make sure that the buyer is not cheated. The super built area includes the lobby, balcony, staircase area etc. This makes up for a sound purchase.
The buyer also needs to see any valid licenses or approvals that may be required for the construction of the property concerning the buyer’s project.
Knowing the total cost of the property is also essential as brokers or channel partners may hide essential costs of parking, club house, preferential location etc. Also, there is a facilitation of different payment options for the buyer. These include special down payment plans, flexi payment plans, construction linked plans and possession linked plans. The buyer must look forward to these and select what suits the best to their needs.
The implementation of RERA has improved the buying experience of buyers with numerous guidelines at their rescue along with boosting investments in the real estate sector. It thus becomes important for the buyer to read these guidelines carefully and look for scrupulous builders in the buying process. Thus, RERA accomplishes the task of both bringing transparency and accountability to the real estate sector.