Real Estate Act has been implemented nationwide to protect the interests of the homebuyers and ensure timely delivery of projects among other things. Real Estate Regulatory Authority makes it mandatory to register real estate projects which cover more than 500 square meters or have more than eight apartments. The Act is effective from 1st May, 2017 while some portions of the act are with effect from 1st May, 2016
What is Rera?
The Objectives of RERA
Protect the interests of the home buyers
Bring in developer or builder accountability & transparency for all transactions
Offer redressal mechanisms for the disputes
Cover all parties
Cover all the parties involved in real estate transactions such as promoters, developers, brokers and agents.
Key Features of RERA
- Each state will have appellate tribunals to address the complaints of the buyers and sellers within 120 days.
- Promoters of the project have to register commercial or residential projects with 500 sq. Meters or minimum of eight apartments under RERA before booking, selling or offering for sale. Registration includes disclosure about the promoter and project.
- Under RERA at least 70% of the money taken from the buyer will be put into a separate account to meet the construction cost. Besides this, the developer cannot ask for more than 10% of the cost as advance payment before signing the registered sale agreement.
- Under RERA, developers will be penalized for delayed possessions of the property and the developer liability for structural defects has been now extended to five years as against the previous two years.
- Home buyer will only pay for the carpet area (i.e. area within the walls) which has been defined under RERA as usable spaces like kitchen and toilets.
- Builders, promoters and agents all need to get registered to be able to sell the projects.
- In order to help buyers make intelligent and informed decisions, RERA requires making public (via websites) all the information regarding the project, profile of promoter, their previous projects, litigations, details of plots, apartments, registered agents and consultants, development plans, financial details among other things.