The Real Estate (Regulation and Development) Act has been a gamechanger in the real estate sector. RERA, as it is known popularly, was passed to protect the homebuyers from fraudulent developers and bring about transparency in the real estate sector.
As intended, RERA rules have had a significant impact on both the property sector and homebuyers. Here is how.
What is RERA?
Real Estate (Regulation and Development) Act is an Act passed by the Indian Parliament that came into force on May 1, 2017. It aims to protect investors and boost the real estate sector.
The Act mandates both states to draft and notify their own rules based on the model rules drafted by the central government.
How has RERA impacted the real estate sector?
- Earlier, the Indian real estate was unregulated and transactions heavily favoured the developers. To counter this, the parliament introduced RERA, the first regulator of real estate in India.
- With the advent of RERA, real estate transactions between the developers and homebuyers have become fairer. It has brought about more straightforwardness and accountability and has thus, made purchasing properties easier than before.
- All builders are required to register their projects with RERA and deliver what was promised in terms of the floor plan, quality, and other property aspects. Thus, builders also ask for vendors’ warranty, which forces them to use high-quality building materials.
Additional Read: Benefits of RERA for Homebuyers
How will RERA impact homebuyers?
- RERA penalises developers who don’t facilitate timely possession of the property. Defaulting developers are charged 2% interest rate over and above SBI home loan interest rate. They may also face imprisonment for as long as 3 years.
- Thanks to RERA, builders now charge on the basis of carpet area and not on the super built-up area, which saves you a significant amount.
- You can claim compensation for structural defects in the construction of the property for 5 years from the date of possession. As per Clause 14 (3) of RERA Act, developers are held liable for such defects and should thus, address the claim within 30 days free of charge.
- As centre and states will have separate appellate tribunals and regulatory bodies, your disputes will be addressed faster, i.e. within 120 days of filing it.
- Curtsey RERA, developers now sell projects that meet all the clearances and are free from legal disputes.
Additional Read: Tips for First Time Homebuyers
Invest with developers who have RERA registration to enjoy the benefits of RERA and protect yourself against the risks posed by investing in a real estate property.
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