What is Real Estate Regulatory Authority (RERA)?

Would you like if the developer of your apartment doesn’t complete the project on time? Would you like if your queries regarding your property is not properly addressed?

Since long the home purchasers griped that land exchanges were disproportionate and intensely for the designers. Thus, something was to be done to answer their grievances. Therefore, the Parliament of India passed the Real Estate Regulation and Development Act in 2016. This act tries to safeguard the home-purchasers while boosting their interest in the land business.

The Act sets up a Real Estate Regulatory Authority (RERA) in each state for directing and supervising the Real Estate bodies. Furthermore, it acts as a mediating body for solving problems when clash of ideas takes place.

The Rajya Sabha passed the bill on 10 March 2016 and the Lok Sabha on 15 March 2016. The Real Estate Regulation and Development Act 2016 can be sub-divided into 10 Chapters, which are further classified into 92 Sections. It came into force with its 92 sections on 1 May 2017.

It is trusted that RERA will make it easier to buy property by providing straightforwardness, provided that the states don’t destabilise and weaken the arrangements and the soul of the focal demonstration.

The Real Estate Act makes it required for each state and association region, to shape its own controller and casing the principles that will oversee the working of the controller.

Aims of RERA

The main aims/targets of Real Estate Regulatory Authority (RERA) are as follows:

To secure the interest of the buyers and guarantee their obligation

To improve the reliability of the real estate area which helps in enhancing the confidence of the investors

To maintain straightforwardness, thus minimising the chances of deceit

To improve the progression of appropriate and correct data between the home purchasers and the dealers

To make the buyers and investors more responsible at their ends

To carry out Pan-India normalization and achieve polished methodology

Benefits of RERA

After getting acquainted with the major objectives of Real Estate Regulatory Authority (RERA), let us understand how is it going to benefit us.

The new concept of calculating carpet area: What if the builder of your building calculates the carpet area as 2000 sq. ft, while some other builder calculates it as something else? This was the situation before RERA came into existence. However, at present RERA has set up a standard formula which every builder is compelled to follow. Almost every builder or developer (and the like) charge based on the carpet area.

Quite reasonable deposition of Earnest money: The developer can take maximum 10 % of the total price of the apartment from the buyer in advance before they enter into the agreement. For instance, if the property you are buying is of Rs. 20,00,000 then you will have to pay maximum Rs. 2,00,000 at the beginning.

Right of the buyer to remain or step out from project: Suppose you are buying an apartment and have paid the earnest money too. The project was to be completed by 20.09.2021, nevertheless, it doesn’t get completed within the stipulated time. Now, in this situation you can do two things. Firstly, you can remain and wait till the completion of the project. Secondly, you can step out of the project. In the second case the builder is bound to return your money with interest.

The right to information: The buyer has the right to know any kind of information on the project he is a part of. For instance, if you are buying a 2BHK flat in a building, you have the right to know the design of the building, the materials used, the progress of work, etc.

Less risk for the buyer: Earlier the developers/builders could invest the money collected for one project in any other project too. However, RERA doesn’t allow this anymore. The manufacturer has to store 70% of the sum acknowledged in for a particular project in a different bank account. He can pull out from such record just based on fulfilment of task, which will be affirmed by a structural designer, planner and a contracted bookkeeper by and by. This confirms that the money collected for a certain project is also rightly invested in that very project. So, the risk of the buyer is reduced because when there is right investment in the right place, positive result is bound to come.

Application of RERA

After going through some of the benefits of Real Estate Regulatory Authority, let us also gain knowledge on the applicability of the same. It is only applicable when you are buying a property. It will cease to work if you are renting any apartment or renovating any property. Nevertheless, it is applicable for developing any kind of structure, like, shops, residential buildings, other office buildings, etc. It is only relevant for the buildings or property that exceeds more than 500 sq. ft. and the total number of apartments does not exceed 8 in number.

Real Estate Regulatory Authority versus The Insolvency and Bankruptcy Code, 2016 (IBC)

It is needless to say that RERA has given a tough competition to the IBC laws which have unnecessarily caused delays in addressing the grievances of the Real Estate customers. The problems of the people were neither properly understood nor solved in time. Under such circumstances, RERA has proved to be quite successful in handling the problems of the customers.

Summarizing

So, this article has tried to provide some basic information about Real Estate Regulatory Authority (RERA). It is hoped that after reading this article you will have some basic idea about what RERA actually is.

Nevertheless, if you still have any confusion or query regarding RERA, please feel comfortable to drop a mail at info@roodland.com. Roodland has a dedicated team ready to answer all your questions and assist you in every manner.

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