The Real Estate Regulatory Authority (RERA) Bill was passed in March 2016 with the main objective of modulating the Real Estate segment of the nation and increasing transparency in transactions for both property developers and home buyers. As the real estate sector has grown multifold in the recent years, the Government of India observed a need to introduce this bill, with the primary purpose of increasing consumer protection and safeguarding this ever-growing industry from fraudulent activities.
How does RERA work?
To successfully develop and sell a property, all certified real estate developers are required to register with the Real Estate Regulatory Authority (RERA) of their respective state. Any property being developed in more than 500 square meters of land or housing more than eight apartments is required to be registered under RERA. This appeal to register the property either gets accepted or rejected in a period of 30 days. Once the property gets successfully registered with RERA, the developer is provided with the following details:
- A unique registration number
- A Login ID with password
The developer is required to login into the RERA website with the above-mentioned details and fill in information about the property. Once this process is completed, the certified developer is licensed to sell their property to potential home buyers by quoting their unique registration number during every transaction.
Why was RERA introduced?
The RERA bill was primarily introduced to benefit the consumers and to make sure that all the money which goes into the colossal sector of real estate is accounted for.
Reforms introduced by RERA:
- State level authorities: The RERA bill ensures that each state of India has a RERA body to regulate the transactions and maintain financial transparency for residential and commercial properties.
- Pricing based on carpet area: The pricing of properties by the real estate developers is required to be based on the carpet area and not the built-up area. So consumers will essentially be paying only for the area which they will be using and not the built-up area of the walls and the common lobbies of the property.
- Focuses on timely completion: The bill ensures that the on-going projects are completed on time by making it compulsory for developers to have a dedicated bank account for each development. These bank accounts are obliged to reflect 70% of the proceedings of the respective project to avoid the developers from using the funds dedicated for one project on other upcoming projects. This, in turn, ensures timely completion and handovers. Invest in properties from recognised developers, like Casagrand, who are “On time Every time”.
Additionally, if the project anyway gets delayed in spite of the above-mentioned reforms, the developer is liable to pay the EMI which the consumer is paying to the bank, for the respective project.
- Clarity between both parties: The RERA bill focuses on increased transparency between the developers and the buyers. This is obtained by making it mandatory for the buyers to share important information with potential buyers, once it has been passed through the State Real Estate Regulatory Authorities. Few of the details to be shared include project plan and layout, time of completion and the project approvals to name a few.
- All power goes to the consumer: The buyer can approach the developer within one year of the project handover for maintenance services and in the case of any defects in the project. This pushes the developers to ensure the property is of high-quality and does not have any deficiency.
Furthermore, the developers do not have the authority to make any changes to the plan or pricing of the project without prior consent from the buyers in a written document. This again provides an added benefit to the buyers as they receive the property which they have signed up for and there is no room for any fraudulent activity.
Buying a property is a milestone for every potential buyer. With such magnificent reforms, the RERA bill is guaranteed to instill clarity, confirm fair-play, assure timely handovers and eliminate fraud in the burgeoning sector of real estate. Apart from the numerous taxes and duties payable while buying a home, you also need to focus on your home safety and security and ensure you get the best home insurance plans for your property. Make sure you buy your property from esteemed builders like Casagrand for hassle-free transactions and on-time project completion.