The intention of designing the RERA Act was solely to bring transparency to the real estate sector. The RERA Act was introduced to abolish problems within the real estate sector. It aims to reduce delays and failures in the project. At the moment, all builders or developers must make the RERA registration before starting any project.
The Real Estate (Regulation and Development) Act is intended to ensure that buyers are not betrayed or taken for a ride by developers.
In the following 14 RERA rules for builders, let us see how it might benefit the buyers.
RERA obliges all commercial and residential real estate projects with more than 500 square meters of land or eight apartments to register with the Real Estate Regulatory Authority (RERA) before starting any project. Developers must publish all the information, such as the sanctioned design, the layouts, the location of the project with a simple demarcation of the property, the carpet area, the number and area of the garage, etc. The developer is required to gain clearance from RERA to curb any malpractices.
Therefore, before entering into the contract, one can check the details of the project online on the RERA website by visiting the RERA website of the State concerned.
The developers are also expected to submit project details, including the number and types of units sold, the government approval, and completion scheduled quarterly. Also, if there is any conflict relating to that property, all records of the proceedings must be uploaded. With RERA one can monitor the progress online.
The developer would be expected to move 70% of the money collected from the customer to the Escrow account. This can ensure that the developer will not use the money on other projects, since they will remove the money from this account after approval from the engineers and chartered accountants they select, and the money can only be used for the project you have invested in.
Standardization of the Purchase Agreement:
Earlier sale agreements used to be in such a configuration that home buyers would be penalized for any default but identical defaults by promoters would not incur any penalty. However, now that RERA requirements are in force, a standard model selling agreement must be reached between promoters and homebuyers to ensure equality and protect buyers from different fines and charges.
The selling agreement shall define the precise details of the project, including the design of buildings and houses, the requirements, the internal development work, and the external development work, the date on which the possession of the apartment, the plot, or the building is to be handed over, etc.
Maximum 10 percent of project expense as advance payment:
The promoter can not consider a total of more than 10% of the cost of the project, the plot, etc. As an advance payment or an application fee from you without first entering into a written agreement for sale with and registering with that person.
Defect Liability Period:
Under RERA, in the event of any structural defect or poor quality, it would be the duty of the developer to correct any defect for a period of five years. So, if any fault is found in the quality used in the construction of the house, you can make the developer/builder responsible for all sub-quality problems and ask for the same repair or compensation.
The area of the property is also measured in three different ways: the carpet area, the built-up area, and the super built-up area. So when it comes to purchasing a house, this can lead to a lot of disconnect between what the home buyer pays and what he actually gets.
However, it is now mandatory for developers to reveal the size of their apartments based on the carpet space ( i.e. the area inside four walls). This involves available rooms, such as kitchens and toilets.
Representation of the Title:
Promoters are expected to disclose a valid title to the property and project. If a fault is found in the title of the land, you can ask for compensation and there is no limit to the amount of that compensation.
If you make an advance payment for a project based on any false information provided to you through a prospectus or advertising, then you have the right to request a refund of your money. And if you want to proceed with the building, the contractor would have to pay a tax, which can be up to 5% of the cost of the house.
If you make an advance payment for a project based on any false information given to you via a prospectus or advertisement, you have the right to request a refund of your money. And if you choose to continue with the construction, the builder will have to pay a tax that could be up to 5% of the cost of the building.
Alteration in the plan sanctioned:
If a contractor wishes to make improvements to your individual flat’s plans and specifications, he can do so only with your permission. And if the contractor wants to make improvements to the entire project’s layout & common areas of the business, he needs the approval of 2/3rd of the total number of buyers.
The Promoter shall not be permitted to pass the majority rights and liabilities in respect of a real estate project to the third party without the prior written consent of two-third parties (purchasers), except the Promoter, and without the prior written consent of the RERA authority.
Now, any real estate agent must register with RERA before selling or advertising any property and must abide by all rules of regulation, such as keeping books and records, not engaging in unfair commercial practices, or making any false oral or written claims
If any customer, promoter, or agent has any complaint about the project, they can file a complaint with RERA. The actual state regulatory agency of the state will seek to settle the conflict within 60 days. If you are not happy with the RERA ruling, a complaint can also be lodged with the Appellate Tribunal within the next 60 days. And after that, if he is not satisfied, the case can be referred to the High Court and the Supreme Court.