What is the Real Estate Regulatory Authority?
What is Real Estate Regulatory Authority & Registration Procedure?: Real Estate Regulatory Authority is the full form of R.E.R.A. Implemented in the year 2017 on 1st May, for managing the real estate sector of India with a strict hand.
It is implemented across the country to save the investing environment for interested investors. The real estate industry of India is the victim of malpractices, which hurt the investor’s health.
Real Estate Regulatory Authority will play a role in the industry a bit like the SEBI stock market. R.E.R.A. aims to cause accountability and transparency in the Real Estate sector.
Silent Features of the Real Estate Regulatory Authority:
There are certain features of the Real Estate Regulatory Authority act, which makes the R.E.R.A rules totally consumer-friendly. And appropriate for managing any transaction related to real estate.
• There is more security to the investment
• Better assurance of timely possession
• More strict action against any fraud or false promises
• All record is digital to reduce the loss of any data
• Quick remedies for any dispute
R.E.R.A. has a provision to penalize both the developer and the customer. Real Estate Regulatory Authority Act 2017 not just barely empowered the customer. But also shaped the whole regulation of the activities of the builders regarding real estate property.
Now lets us have a look at what are the key provisions of the R.E.R.A. Act.
Key Provisions of the RERA Act:
• In India every state possesses to acknowledge regulatory bodies within the type of appellate tribunals. To resolve the conflict between the customer and the builders. It should resolve within 120 days.
• Because of RERA it’s become mandatory for all commercial or residential land projects. Where the land is over five hundred square meters or eight apartments will have to register with the regulator before launching the project.
• It seeks to impose strict regulations on the promoter. To ensure that the construction of the project is completed on time.
• Carpet areas must be clearly defined within the bill to include usable spaces like kitchens and washrooms. Imparting clarity which wasn’t the case earlier.
• A developer’s liability to repair structural defects has increased to 5 years from the earlier 2 years.
• The buyers have to pay only for carpet areas (areas which are within the wall). The promoters or builders cannot charge for the super built-up areas.
How RERA Benefits the Home Buyers
Points of concern for the house buyers before RERA:
• Property builders advertised and sold properties supported by ambiguous super built-up areas. Many homebuyers ended up spending more but actually deriving lesser benefits and useful spaces.
• Homebuyers had to pay a booking charge to block their investments in an apartment and later pay the whole purchase consideration in one go or in installments without knowing that how and where they were utilizing their funds.
• Those who buy a home did not have the point of contact to ascertain the progress of the project.
• They have no mechanism to know the credibility of the project and had merely relied on the brand of the property developers or promises made by the property developers.
How RERA has Taken Care of the Above Issues:
• A property possesses to be sold supported carpet area only. To avoid confusion and tweaking at the end of property developers, RERA has specifically defined “carpet area” to mean net usable floor area of an apartment which includes the area covered by the inside walls and excludes.
the area which is roofed by the external walls, areas under service shafts, exclusive balconies, verandahs, or open terrace areas. This might give assurance to homebuyers that they are going to pay for the actual space that they are getting.
• Property developers will have to park 70 percent of the whole consideration received during construction in a separate bank account. The aforementioned amount is often withdrawn only for the aim of the cost of land and the price of construction within the precise project.
The amount is often withdrawn in proportion to the share of the completion of the project. Further, the withdrawal is often made only after obtaining a requisite certificate from an architect, an engineer, and a charted accountant in practice. This might give assurance to homebuyers that their money is being invested within the project and not used for other purposes. Thereby, guaranteeing the quality of development.
• It has mandatory for all property developers to require care of an online site and provide details of the registration granted by the RERA quarterly update on the number and type of apartments or plots booked, approval granted, the status of the project, etc.
this might confirm that the homebuyers are updated on each and every aspect of the construction development. And isn’t any more duped by the developer.
Further, RERA has protected the interest of homebuyers in the subsequent ways:
• Property developers are liable for compensating the homebuyers for any kind of loss or damage caused because of incorrect or falsehood made within the prospectus or notice of advertisement or in regard to the model apartments.
• Structural alterations to the sanctioned plan to be made only after obtaining the written consent of a minimum of 2/3rd of the Customers.
• Any failure on the part of the property developer handy over the possession of the property in accordance with the agreement for the sale would empower the allottees, at there’ll to withdraw from the project and demand a refund of the number of the amount paid, in construction with the prescribed interest.
• In case of Any loss because of the defective title would wish to be compensated by the developer.
• Real estate agents also are going to be required to register under RERA and non-compliance with the provision of RERA will attract to penalty or/and imprisonment up to a maximum of three years.
Let’s see due to RERA what changes had made in the real estate industry!
Registration:
Before RERA
Difference between old rules and new rules of RERA Before 2016 many projects started its transaction without a valid registration. Neither the authority nor the law was serious regarding the registration and the security of the buyer’s rights.
After RERA:
RERA act has made the registration of each project mandatory. Without registration, the builders cannot take any advance, make advertising for selling, or get into any agreement.
Advertisement:
Before RERA:
Before the actual came into existence, anytime the advertisement was published, and people were shown an empty plot and design on paper. The builders give the promise to buyers that the project is going to be constructed on this plot, but later it was seen that no project is constructed over there after a few years.
After RERA:
RERA rules clearly banned any kind of false promises. If the rooftop swimming pool is promised so it has to be delivered over there if they had a promise of 8ft/3 ft balcony so they cannot reduce it to 6ft/2 ft. Even if they had not mentioned in the agreement of these things it any others, but had mentioned in the advertisement then they are liable to that.
Transferring right:
Before RERA:
Before the implementation of the RERA Act, even if one builder transferred the project to another builder, the buyers often did not get information. If the buyers face any issues, the previous owner refuses to respond to it, stating the reason that the previous owner does not have any more responsibility towards there project. This harassed more the home buyers.
After RERA:
The Real Estate Regulatory Authority Act made it mandatory for any projects which are being transferred to any other person, it requires getting notified to the allocates, investors, buyers, and the authority. The name and the ownership will be changed on the documents. Everything must be done under prescribed until the whole procedure is completed. The previous owner shall not be released from the responsibility.
Timely possession:
Before RERA:
Before the act took the matter into its grip, there was no assurance that when the property is going to be delivered to the buyers. Often it delays of 10 to 15 years, which is really a stressful matter for the common man. Many times the project was not started on the promised delivery day. The builders and sellers also get unresponsive to those problems.
After RERA:
The RERA act imposed certain rules regarding the delay in possession. If the possession is delayed due to an unreasonable period the buyers get certain options like, alternate shelter till the project is completed, money back policy along with the interest or an alternate residence of the same standard that has been promised by the builders. In the residence, if the extra cost is required then the builders will bear it.
Quality material:
Before RERA:
When the sale deed of the property or a plot is prepared, it is necessary to write the quality of each essential material that is going to be used in the construction of the project. Often it was seen that the material was used of lower quality than has been promised, which resulted in earlier decay and caused damage to the products.
After RERA:
When the RERA act was implemented. It becomes compulsory to use the promised products and if any issues appear. Materials of similar quality are to be used. If unfortunately, the builder has used worse quality products so the builder itself is liable to pay compensation on that ground. If anyone has suffered a loss due to the usage of such material even, later on, the victim can claim compensation from the builders.
Thus, the Real Estate Regulatory Authority act. It had brought a drastic change not only in regulating the real estate laws but also brought the buyer and seller under tight observation.
Note: “This document had been written to provide an update in simple/ lucid language. The Author shall not be responsible for any decision made based on the content of this document. Care has been taken to produce authentic and reliable information. However, users are expected to obtain professional advice before implementing it.
Read Our Second Blog Amendments within the Companies Act, 2013 and MCA relaxations Because of COVID-19
Note: “This document had been written to provide an update in simple/ lucid language. The Author shall not be responsible for any decision made based on the content of this document. Care has been taken to produce authentic and reliable information, however the users are expected to obtain professional advice before implementing.