Owing a house is a dream of every common man, but to invest such big amount is difficult for each and every one. A Real Estate price rises day by day but level of income doesn’t rise at the same pace as that of the real estate prices. As there were no standard norms, every builder has his own norm & practices. He structured the builder-buyer agreement in a way that it would be in the favor of the builder. The rights of the common man, who put his lifelong savings in buying a house, were very limited that Government introduced RERA Act so that there is no exploitation done to the property buyers by the unfair traders.
Real Estate Regulations Act denoted as RERA came into existence in year 2016 specifically to protect the interests of property buyers. RERA specifies the rules and regulations about the building/construction and development of real estate. Real Estate Authority & Appellate Tribunal for each state has been formed under RERA Act, 2016 to maintain the transparency in transactions, to file a complaint against any misdeed or dishonest behavior of the developers by the property buyer. RERA safeguards the rights of the property buyer.
Benefits of RERA:
- RERA has been divided in small and sub regulatory bodies as it will be possible to look after every construction, real estate sites in very single state within the boundary of India.
- Standardized Carpet Area: Earlier there was no standardized format for calculation of carpet area, builders use to finalize it by applying their own methods. This led to rise in property prices. Now RERA has set the standard format for Carpet Area calculation, and builders would not manipulate the property buyers on same.
- Property Information: This is main benefit of RERA, buyer and investor get right to information while buying the property, about the property’s execution plan, property layout, its completion stages etc.
- No Delays: Before starting any project, it is mandatory for the builders/developers to register under the RERA Act to avoid the delay in projects, for on time possession to the property buyer.
- RERA is applicable for both the residential as well as commercial properties.
Benefits for Property Buyers:
- Property buyer has to pay only for the mentioned carpet area and not for other facilities provided by the builder/developer
- Incase of delay in possession the Interest is to paid by builder at rate of 2% for the period of delay
- After getting the possession buyers can file complaint against any defaults in property over time period of 5 years, for rectification. This issue is to be solved within 120 days.
- As per RERA Act builder/developer cannot ask for more than 10% as advance.
- Builder/developer has to inform buyer before any changes. It is mandatory to inform at least one-third of property buyers.
RERA for Builder/Developers:
- It is mandatory for the builders and developers to registered for the projects exceeding area of 500 sq. mt. or more than 8 apartments.
- As per RERA Act, builders/developers have to deposit 70% of the amount received from property buyers in bank account.
- Builders and Developers have to register under the RERA Act under respective state or union territory.
- Builders/Developers have to maintain records of every money spent on the construction; all the transactions are to be accounted
- Single Sale model/Agreement is prepared between builders/developers and property buyers.
Penalties under RERA Act:
- 10% of projects estimated cost incase of failure in registration of RERA, whereas 5% of projects estimated cost incase of any misdeed or dishonest behavior or any misinterpretation.
- In case of non-compliance of RERA penalty is charged on projects estimated cost up to 5% to the builders/developers
- The penalty of 10% of project estimated cost or imprisonment of 1 year (or both) is levied in case of non-compliance with Appellate Tribunal for Builders/Developers
- The penalty of 10% of project estimated cost or imprisonment of 1 year (or both) is levied in case of non-compliance with Appellate Tribunal for Buyers.