To facilitate and ensure transparency in the real estate sector – the Government of India passed the RERA Act in May 2016. Soon after, this Act was brought up live to address the concerns of house-buyers, brokers, builders and other stakeholders of India’s real estate industry.
Ever since its inception, RERA has been implemented under several reforms, and more are still on the way. That is why understanding the concept of RERA, its rules and regulations as a prospective home buyer are crucial. This will help you to navigate the country’s real estate landscape and mitigate any issues arising out of it.
Let’s take a closer look at RERA, its impact so far and why it is beneficial for homebuyers in India.
Real Estate Regulatory Authority the full form of RERA– Rera stands for transparency in India’s real estate industry. This Act was brought into action to remove internal discrepancies and issues for easier and more transparent transactions between buyers and sellers.
Why is RERA Introduced?
According to RERA Act, RERA committees are set-up all over India to promote transparency, uniformity and regulate the complications in the real-estate sector. It has been all the major cities and union territories such as –
- RERA Karnataka
- RERA West Bengal
- RERA Maharashtra or MahaRERA
- RERA Goa and many more.
With RERA in authority, home builders are required to inform homebuyers about the construction progress, hand over the keys to the property owners within the mentioned date and follow every rule laid down by the RERA authority.
Key Benefits under RERA
Now that you know what RERA is trying to achieve, take a look at how RERA is altering the real estate market for the better –
- RERA aims to minimise project delays and loopholes by making it mandatory for property developers to register under it before implementing the project.
- RERA has further been sub-categorised into small regulatory bodies to oversee the real estate development in states or union territories.
- Rules of RERA will be applicable to both commercial and residential properties.
- The standardisation under RERA strives to protect the interests of developers and buyers alike.
- The implementation of the RERA Act has brought more transparency and accountability in India’s real estate sector.
How can RERA prove beneficial for homebuyers?
RERA brings benefits for first-time property buyers in the following manner –
- With the implementation of rules under RERA, builders need to disclose every single detail of projects registered under RERA.
- As per RERA guidelines, one has to pay for a property solely based on carpet area or the area enclosed by walls. Builders cannot charge a homebuyer for the super built-up area which includes – lobbies, stairs, elevators and balconies.
- The property builders are also required to put 70% of the money collected from home seekers into a bank account – to be used only for construction purposes only.
- The Act also emphasises on the timely construction of projects. Delays in construction and property handovers to buyers will make a developer liable to pay up 2% interest over MCLR for the period of delay.
- After the handover, a property buyer can report construction defects for a period of up to 5 years and get the developers to rectify them.
- The RERA Act prohibits home constructors from availing more than 10% as advance from buyers.
- At the time of possession, if one identifies any discrepancy in the title deed, he/she can immediately claim compensation from the respective developer.
As a homeowner, this is all you need to understand about RERA Act in India. This way, you can make a safe investment and reduce any chances of possible losses.
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As a prospective homebuyer, make sure you have ample knowledge about such government housing schemes and lenders. Choose the most appropriate property as per your requirements and needs. Refer to the most suitable loan terms from a leading lender and easily repay the loan over time while enjoying your new place of residence.