RERA was enacted in 2016 in India as a measure to protect the rights of home buyers and regulate the real estate sector.
Prior to the implementation of RERA, it was difficult for buyers to access accurate information about properties and developers, leading to confusion and mistrust.
Many buyers found themselves waiting for possession of their homes for years, without any clear timeline for when they would receive possession, in which they invest their hard earned money.
Buyers were often required to pay additional charges for facilities and amenities that were not disclosed to them at the time of booking. To resolve all these issues, RERA Act is introduced.
RERA aimed to address these issues by mandating that developers register their projects with the regulator, disclose all details about the project, and adhere to a set of specified timelines.
What is RERA Act?
The Real Estate (Regulation and Development) Act, 2016 (RERA) is a law in India that regulates the real estate sector and protects the interests of home buyers.
The act was enacted in 2016 with the aim of bringing transparency and accountability to the real estate sector and protecting the rights of home buyers.
It applies to all states in India except Jammu and Kashmir, and it covers both residential and commercial projects. The act requires developers to register their projects with the RERA authority and to disclose details such as the project’s location, cost, and possession date.
It also requires developers to maintain a 70% escrow account to ensure that the funds collected from home buyers are used only for the construction of the project under RERA.
Full Form of RERA
RERA stands for the Real Estate Regulatory Authority. RERA’s established year is considered to be 1 May 2016. At that date, out of 92 sections, only 52 were notified and the other provisions were effective on and from 1 May 2017.
What are the RERA Objectives?
The objectives of RERA are to promote, establish and enforce fair practices in the real estate sector, protect the interests of consumers and provide them with a better understanding of their rights, and eliminate unscrupulous practices by unregistered real estate agents.
The implementation of the RERA has had a major impact on the Real Estate industry in India. It has brought with it major reforms in the way builders and developers operate, making it a much safer process for home buyers.
The act empowers home buyers to seek legal remedies in case of any breach of the terms and conditions by the developer.
RERA Act: What is its purpose?
To protect and maintain the interest of buyers as well as to resolve conflicts between builders and buyers, the Real Estate Regulation and Development Act 2016, or RERA, 2016 is considered as RERA act year. It is a central law that will be implemented by all states in the country.
RERA is a major step in the real estate sector to protect the interest of all stakeholders by ensuring transparency in pricing, terms and conditions.
The purpose of the RERA Act is to make real estate more transparent, forcing developers to adhere to norms set by the regulator and protecting the interest of homebuyers.
The Act will also help in better regulation of the industry, and make it easier for aggrieved consumers to take the appropriate step for redressal of grievances.
RERA Guidelines for Better Investments
- To resolve any disputes between buyers and builders within 120 days, each state has to establish a regulatory body in the form of appellate tribunals.
- A minimum of 70% of the deposit made by buyers needs to be placed in separate accounts by builders or developers.
- For all residential and commercial properties over 500 square feet, RERA registration will be required.
- In addition to imposing strict regulations on the developer, RERA approved means are to ensure that construction is completed on time.
- Unlike earlier bills, the bill defines carpet area to include usable areas such as kitchens and toilets, adding clarity.
- As of now, developers are responsible for repairing structural defects for 5 years instead of two years as they used to be.
During the purchase process, the buyer will only have to pay for carpeted areas (areas within walls). A builder can no longer charge for the super built-up area.
RERA Act terms every Buyer should know
Carpet Area
Carpet area refers to the area of a building or an apartment that is covered by carpet or other flooring material. It is the area within the walls of a building or apartment and does not include the thickness of the walls or any common areas such as lobbies, corridors, and elevators.
Carpet area is an important consideration for home buyers because it determines the actual size of the living space that is available for use.
Built-Up Area
Built-up area refers to the total area of a building or an apartment that is covered by the walls and roof of the structure. It includes the carpet area, as well as the thickness of the walls and any common areas such as lobbies, corridors, and elevators.
Super Built-Up Area
A super built-up area refers to the total area of a building or an apartment, including the built-up area as well as any additional amenities or facilities provided by the developer, such as a swimming pool or a gym.
Salient Features of the RERA Act
The Real Estate (Regulation and Development) Act, 2016 is a significant piece of legislation that aims to protect the interests of home buyers and boost investments in the real estate sector in India.
Some of the key points that a home buyer should know about RERA are:
- RERA applies to all new and ongoing real estate projects in India, except those that are covered under other acts such as the National Building Code or the Cooperative Societies Act.
- RERA requires developers to register their projects with the Real Estate Regulatory Authority (RERA) in the state in which the project is located.
- RERA imposes penalties on developers for not adhering to the regulations specified under the Act, such as failing to complete the project within the specified time period, not obtaining the necessary approvals and licenses, or not depositing 70% of the funds collected from home buyers in an escrow account for the construction of the project.
- RERA provides a mechanism for home buyers to file complaints with the RERA if they have any grievances related to the project.
- RERA requires developers to disclose all necessary information about the project to the home buyers, such as the plan and layout of the project, details of the promoter, approvals and licenses obtained, agreements with contractors and consultants, and details of the bank account in which the funds will be deposited.
RERA Act Benefits for Home Buyers
The Real Estate (Regulation and Development) Act, 2016 (RERA) is important for home buyers because it provides them with a number of protections and safeguards. Some of the key benefits of RERA for home buyers are:
Increased Transparency
RERA requires developers to disclose detailed information about their projects, including the location, cost, and possession date. This helps home buyers to make informed decisions and reduces the risk of being misled by developers.
Protection against Delays
RERA imposes penalties on developers for delays in completing projects. This helps to ensure that home buyers do not have to wait for an indefinite period to get possession of their homes.
Protection against Fraud
RERA requires developers to maintain a 70% escrow account to ensure that the funds collected from home buyers are used only for the construction of the project. This helps to protect home buyers from fraud and misappropriation of funds.
Legal Remedies
RERA empowers home buyers to seek legal remedies in case of any breach of the terms and conditions by the developer. This provides home buyers with a platform to seek justice in case of any wrongdoing by the developer.
Protects against Substandard Construction
RERA requires developers to use quality materials and adhere to specified construction standards. If a developer fails to do so, the buyer can seek compensation for any defects in the property.
Builders will need Clearance before Selling
Developers are required to obtain all necessary approvals and clearances before selling a project. This includes approvals from the local authorities and any other regulatory bodies that are required for the project.
Overall, RERA is an important piece of legislation that helps to protect the rights of home buyers and promotes transparency and accountability in the real estate sector.
How to File a Complaint under RERA
To file a complaint under the Real Estate (Regulation and Development) Act, 2016 RERA, you can follow the steps given below:
Check the Jurisdiction of the Complaint
The first step is to determine the jurisdiction of the complaint. If the project is located in a state that has notified the RERA rules, you can file a complaint with the RERA in that state.
If the state has not notified the RERA rules, you can file a complaint with the appropriate authority specified under the Act.
Obtain a Complaint Form
You can obtain a complaint form from the RERA website or from the RERA office in your state. The complaint form can also be downloaded from the RERA website.
Submit the Complaint Form and Documents
You can submit the complaint form and supporting documents either in person or by post to the RERA office in your state. You can also file the complaint online through the RERA website.
Pay the Prescribed Fee
You will need to pay the prescribed fee for filing the complaint. The fee may vary from state to state.
Keep a Copy of the Complaint and Receipt
It is important to keep a copy of the complaint form and the receipt for the fee paid, as you may need to produce these documents at a later stage.
After you have filed the complaint, the RERA will investigate the matter and take appropriate action as per the regulations specified under the Act.
How to ensure that the Property is RERA Compliant?
RERA Number/Unique RERA number assigned to each project
If you wish to learn more about a project, you will need to note down the RERA registration number. In addition to identifying the project, this number identifies its compliance with RERA.
RERA Website
By using the RERA number, you can check the details of the project on the RERA website.
Size of the Property
In addition to registering the project under RERA before advertising or launching a project whose unit size is 500 square meters or 8 residential units, builders must also advertise or launch a project with a minimum unit size of 500 square meters or 8 residential units.
Escrow Account
In a real estate transaction, a RERA escrow account protects the seller, buyer and lender. Under RERA, 70% of the amount must be deposited into a separate account to be maintained in a scheduled bank to cover the construction cost and land cost of the project alone.
It is mandatory that developers with RERA-registered projects show proof that 70% of the total payment has been deposited into an escrow account.
Conclusion
In conclusion, RERA is an important piece of legislation that has brought much-needed transparency and accountability to the real estate sector in India.
It protects the rights of home buyers and ensures that developers adhere to the regulations specified under the Act. By understanding the provisions of RERA, home buyers can make informed decisions about their real estate purchases and ensure that their interests are protected.
RERA has not only benefited home buyers, but it has also contributed to the overall growth and development of the real estate sector in India.
FAQ
What is the Full Form of RERA?
The full Form of RERARERA stands for the Real Estate Regulatory Authority. RERA’s established year is considered to be 1 May 2016. At that date, out of 92 sections, only 52 were notified and the other provisions were effective on and from 1 May 2017.
Very informative blog
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