Updated: May 20
The Real Estate (Regulation and Development) Act is known as RERA. The Bill was first proposed in 2013 and eventually passed by Rajya Sabha and the Lok Sabha on March 10 and 15, 2016. The Act was implemented on May 1, 2016. The law aims to protect home-buyers and encourage investment in the real estate sector. We will go through some of the key RERA concepts in this article.
Why is RERA needed?
Especially in India, Real Estate has never been a profession that can be trusted. You cannot decide which builders or brokers to trust when so many options exist. Ask your parents if they spent all or almost all of their life savings on a home purchase. In those days, it was risky for people to engage with builders to build houses. What if the contractor is dishonest? People found it extremely difficult to trust.
Transparency forms the cornerstone of a trusting relationship. No matter if it's a personal or professional relationship. RERA was implemented primarily for this purpose, to improve transparency and regulate real estate. Project delays and any other types of misconduct are something RERA strives to reduce. RERA is a certification of trust.
What benefits does RERA give to home buyers?
RERA benefits home-buyers in many ways some of them are:-
Builders are required under RERA guidelines to post all project information on the RERA's Website and to update it regularly. This guarantees transparency to customers.
According to RERA, you just need to pay for the project's carpeted or walled areas.
RERA is focused on getting a project finished on schedule. The builder may be penalized for any delays.
Any modifications or adjustments must be made with the knowledge or approval of the customers.
As a result of RERA, transparency is the most significant benefit. People are becoming more knowledgeable about real estate. We have witnessed numerous instances where customers have taken action to stop undesirable behavior.
What benefits does RERA give to the Real Estate Industry?
Builders first worked on their own terms and conditions. There is now a Governing Organization that sets the conditions for builders to work. Following the implementation of RERA, builders are required to provide every detail with the appropriate documentation to ensure consumer transparency. These are the RERA documentation that builders must provide.
If a builder intends to develop a project with a footprint larger than 500 sq.m or more than eight flats, they must register with the state's RERA.
To prevent money laundering and transaction fraud, builders are required to deposit 70% of the money they receive from home-buyers into bank accounts.
Builders are required to update all little facts regarding their project, including financial and other details, on the RERA website. Customers can more easily examine each project before investing when they have access to these facts.
Penalties under RERA
You must have seen several disputes based on complaints made by home buyers. RERA is becoming a tool for maintaining order. Builders or promoters may be penalized based on the penalties you specified. Penalties they must endure include:
The Act specifies that failure to comply with its requirements may result in up to three years in prison, a fine of up to 10% of the estimated cost of the real estate project, or both.
A promoter who violates the rule may be subject to a fine of up to 10% of the estimated cost.
Real estate agents must register with RERA in order to practice. The Agent is required to submit an application to the authority for the project's registration. If the agency does not register the projector, they will be penalized Rs 10,000 per day if they are in default.
Any allottee who disobeys the authority's guidelines could be required to pay up to 5% of the property.
In the real estate industry, RERA has established a new standard. The biggest trust barrier between customers and real estate has been eliminated. In the real estate industry, transparency has facilitated significant progress. Real estate has evolved as a result of RERA in numerous ways.