What is RERA? Real Estate Regulation and Development Act 2016 RERA was implemented on 1st May 2017 Commercial, Residential and Plotted developments come under RERA. Projects on at least 500 square meters of area or with 8 flats will have to be registered with the regulatory authority.
Why this law was needed?
- Real Estate contributes about 9% of GDP and is second largest employer.
- Real Estate sector was unorganized and underdeveloped
- No regulator to control real estate market, as SEBI is there for to control of share market.
- To protection to the interest of consumer, to promote fair play in real estate transactions and to ensure timely execution of projects.
- To boost domestic and foreign investment in the sector.
9 Key Benefits for Home Buyers:
- Builders have to obtain all necessary approvals as well as certificate of registration from the authority before advertising or marketing projects. All property clearance are mandatory before beginning of a project.
- Now you can check and verify all related documents of the projects on RERA website. (Like Authenticated copy of all approvals, commencement certificate, sanction plan, layout plan, specification, plan of development work, proposed facilities, proforma allotment letter, agreement for sale and conveyance deed to be given)
- Selling on carpet area and not on super built up or built-up area. “Carpet area” means the net usable floor area of an apartment, excluding the area covered by the external walls, areas under service shafts, exclusive balcony or veranda area and exclusive open terrace area, but includes the area covered by the internal portion walls of the apartment.
- Real estate agents dealing in this project also need to registered with RERA.
- 70% for the fund paid by buyers will be kept in escrow account and will be used for the same project only.
- RERA prescribed sale agreement between builder and buyer.
- Builders cannot change plans of the project without taking permission from 2/3 buyers.
- Timely delivery of flats. If it is delayed than interest payable to buyer provision is given in RERA.“Interest” means the rate of interest payable by the promoter or the buyer, as the case may be. The rate of interest chargeable from the buyer by the promoter, in case of default, shall be equal to the rate of interest which the promoter shall be liable to pay the buyer in case of default. The interest payable by the promoter to the buyer shall be from the date the promoter received the amount and interest payable by the buyer to the promoter shall be form the date the buyers’ defaults in payments to the promoter till the date it is paid.
- Builders or Promotors need to provide service for 5 years after possession the property. It will increase in the quality of construction due to defect liability period of 5 years. RERA protects the interest of Builder, Promoter and Real Estate Agents