RERA Act 2017
Here we will discuss about RERA which is also considered as a Revolution in Real Estate Industry in coming Period of time. The Real Estate (Regulation and Development) Act, 2016 (RERA) had finally gave India’s real estate sector its first regulator from Monday, May 1, 2016.
Real Estate Regulatory Act
What is Rera ?
Who will get Benefits and what will be Effects of RERA?
Most of the People know it with the name of a regulatory act as its Full Form is Real Estate Regulatory Act.Central Government has done the provision for it that it should be implemented in every state of the country. For this a committee will be organised internally in every state who sort out after every complains and disputes between builders and buyers.
This will be divided into two parts;
Some rules which will be implemented universally in every state and other is operations which will help Buyers .First of all we will discuss about those universal rules;
1)we will talk about builder buyer agreement which is signed when we buy a a property i.e called BBA. This BBA format was designed and the language used in that letter was according to builders. They used that letter for any kind of dispute or we can say they use it for their protection against any mess.But now after RERA there will be a Universal BBA for every Buyer where builder put their project details.
2)While delay in Project Completion builder has to pay compensation to buyers. But it was not done in a proper manner as some builders were paying some were not. If the promoter defaults on delivery within the agreed deadline, they will be required to return the entire money invested by the buyers along with the pre-agreed interest rate mentioned in the contract based on the model contract given by RERA. If the buyer chooses not to take the money back, the builder will have to pay monthly interest on each delay month to the buyer till they get delivery.
3) For selling no area was defined, like for ex- 900/sqft size carpet area someone was selling it for 1200/sqft or 1300/sqft and so on,they were doing according to their will. But now after RERA there will be a specific carpet area to be sold and will be defined where balcony and wall area will not be included.
4) Previously whoever was try to be a builder, this was one of the major reason for all the disputes in real estate. As some people with motive to make money become builder and defame Real Estate market. But still around 90% Builders are working on their commitment. And left 10% are responsible are all the mess happened in Real Estate market. The genuine builders are not able to do their work properly due to this.
So Builders who will make more than 5 Flats will come under RERA. RERA will check its 5 years credibility in this market ,only after verification they can register in RERA.
5) Previously buyers were given any quality of product and they have to accept that. But under RERA buyers will get 5 years warranty in product quality.
6) For selling of products there are numbers of brokers in the market, who used to give any mis-commitment to sell a property. Now in RERA they have to understand their responsibility and register themselves in RERA. Builders on the other hand also have to identify their brokers before handling a project.
After analysing all this it is said that there will be lot of improvements will be done after implementation of RERA. Those builders who will thoroughly understands Rules of RERA will not going to do any mistake.
Now we have to see how will it work as there are many regulatory bills already there . Are they working?
Will RERA Work?
Now will talk about its operations part;
The major issue was there was no place where buyer can complain about any issue of property. RERA through its technology will give a platform for this. Previously if a buyer has to complain there was only consumer forum where they can complain which is entirely a different body which works in its own portfolio has already huge complain list registered due to which it takes a long time to respond and resolve a issue.
But RERA is committed to resolve a issue in fix period of time within 60 days. And buyers can complain easily online. All the projects all over India will be updated in RERA website with its documentation and approval. That means only those builders will work who have all valid documents for a project. Every builder has to update their project status on RERA website in every 3 monts. So after this implementation buyers will not need to run after builders office to know about project status and there will be less chances of delay in projects completion.
The promoter of a real estate development firm has to maintain a separate escrow account for each of their projects. A minimum 70 per cent of the money from investors and buyers will have to be deposited. This money can only be used for the construction of the project and the cost borne towards the land.They also have to furnish details of revenue collected from allottees, how the funds were utilised, the timeline for construction, completion, and delivery that will need to be certified by an Engineer/Architect/practicing Chartered Accountant.
So the conclusion is that Under RERA there will be no misleading to buyers and RERA will prevent real estate form people who defame it for their sake of money and own benefit.
RERA Act Benefits
“RERA protects buyers in the real estate projects. They are the king now.”
- As per Real Estate Regulation Act, real estate developers and agents need to register with State Real Estate Regulatory Authority by 30 July. They would then come under the purview of RERA act. When you buy a property consider checking this aspect so that you are protected from now on.
- As per RERA, Real Estate Developer need to deposit 70% of the funds collected from buyers in separate bank account created for the projects. They need to use these funds only for the construction of the projects to see timely completion of the projects.Any deviation in this would attract penalty including imprisonment.
- As per RERA guidelines, developer should sell the projects only based on carpet area where buyer can use. In case of defaulter they would be imprisoned for 3 years.
- Real Estate Developer should provide all project details on Real Estate Regulator website and provide regular updates on construction progress.
- In case of delay in the possession from developer side, they need to pay 2% interest above SBI Lending rate to the buyer.