Buying a real estate property is among the biggest financial decisions of an individual’s life. It not only requires a large sum of money but also involves a number of legal formalities. Since the Indian real estate sector has witnessed a huge boom in recent years, the government is taking several steps to make the process easy yet transparent. A large number of rules and regulations have been introduced to minimize the chances of any fraud or discrepancy, the RERA Act 2016 being one of them.
You must’ve heard the term RERA many times before, as it is becoming the new buzzword for the real estate sector. However, a number of real estate investors don’t have a clear idea of what the RERA Act is and how it can help them. Here is a detailed explanation of things like what RERA registration is, what is the meaning of RERA-approved property, and a lot more:
RERA stands for Real Estate Regulatory Authority, which was originally introduced in the year 2016. This regulatory authority handles issues related to the real estate sector on the basis of a standard set of rules and regulations. The RERA Act 2016 was passed by the Indian parliament in 2016 and came into effect in May 2017. Since then, it has been enacted and enforced in a number of states and union territories in India.
The main purpose behind introducing this act is to maintain transparency in real estate transactions. This not only reduces the chances of any kind of fraud but also increases the number of real estate investments all across the country.
There are several provisions that come under the RERA Act 2016, and they are applied to both residential and commercial properties. Some of the important ones are:
All property developers must register their real estate projects with their state’s RERA before initiating any kind of advertisement or sale. At the time of RERA registration, they need to provide detailed information about the project, including land titles, proposed layout, schedule, etc.
In order to obtain RERA approval, the builder needs to disclose all the relevant information on the official RERA website. This information includes a detailed project plan, specifications, carpet area, amenities to be offered, and a lot more.
The RERA Act 2016 states that in the case of a flat purchase, the price will be decided only for the carpet area instead of the super-built-up area.
For each project, a separate escrow account needs to be maintained. In this account, the builder has to deposit at least 70% of the funds received from buyers.
As per the RERA Act 2016, the builder must adhere to the proposed timeline of a project and ensure on- time delivery to buyers. If there are any delays, they are liable to pay penalties.
Every state’s Real Estate Regulatory Authority ensures that real estate agents or brokers register themselves with RERA. They also need to provide accurate information about the project they are handling and their respective commission charges.
After the RERA Act 2016 came into effect, real estate buyers now have a platform where they can file their complaints with any developer or real estate agent. There is a state-specific Real Estate Appellate Tribunal that resolves any such issues.
Here are all the key benefits of the RERA Act 2016:
Everyone wants some kind of assurance when it comes to putting their hard-earned money into a piece of land, a house, or a commercial space. It is always recommended for real estate investors to choose a RERA-approved property. This way, they can not only rest assured about the safety of their money but also raise a complaint in case of an issue.