Before the establishment of the RERA Act, buyers faced many problems. One of the biggest problems was the unfulfillment of the developer’s commitment. They lose their hard-earned money. The RERA Act was implemented due to rising complaints of fraud against the developers and to maintain transparency between the buyer and the developer.
What is RERA Act?
RERA stands for Real Estate Regulation Authority. The act is introduced by the Indian government to protect the homebuyers from any kind of fraud. The act launched in phases; the act came into force on 1st May 2016 with 61 out of 92 sections, and the remaining provisions came into force on 1st May 2017. The RERA act implemented with the aim of addressing the issues that are hurting for growth of the real estate sector which includes-delays in project delivery, construction quality, pricing and project approvals etc.
How does RERA protect home buyers?
1. Mandatory Project Registration: For developers, it is necessary to register their projects with the Real Estate Regulatory Authority (RERA), providing important project information like completion date, current status, detailed layout plans, address of the project, construction schedules, financial projections and documents of land ownership.
2. Escrow account security: Before the enforcement of RERA, developers often used buyers' money to fund other projects or in other costs. Due to this, projects often get delayed or are not completed at all. But now, because of RERA, developers need to deposit 70% of buyer’s payments into a dedicated escrow account. This ensures funds are only utilised for the completion of the project like land cost or construction costs.
3. Delivery Assurance: Developers need to strictly follow committed possession timeline.
4. Efficient dispute resolution: RERA restructures complaint resolution, providing a faster and more cost-effective alternative to traditional courts. Conflicts are handled quickly, ensuring fast resolution of buyer’s concerns.
Important features of the RERA Certificate
1. Timely completion of the project: If a project is delayed, developers need to compensate buyers with interest for the delay. This provision of the RERA Act for developers holds them accountable for the development work and to avoid unnecessary delay.
2. Protection against Misleading Advertisements: Developers now make sure that the promotional content accurately shows the project details. False or misleading claims can attract heavy penalties.
3. Fair pricing regulation: Developers can’t change the price of a RERA registered property after an agreement is signed by the buyer. This rule saves the buyer from unexpected hikes in cost.
4. Third-party transfers: If a developer wants to transfer the majority of the property rights to another party (third party), in this case, written approval from two-thirds of the allottees or buyers are required.
5. Legal safeguards for buyers: If a developer violates the guidelines of the RERA Act, buyers can take legal action, and if the developer fails to comply with the order, official authorities may impose imprisonment or penalties.
Buy a home strategically with RERA.
1. Verify RERA Registration: Check the project’s RERA number through the state portal.
2. Monitor Progress: Stay informed about quarterly updates of construction to ensure timely completion.
3. Review Document: Verify the authenticity of legal documents, necessary permits and construction plans.
4. Security of Payments: Limit the advance payments to 10% before signing the agreement. Confirms that the 70% of your payments go to an escrow account.
5. Layout Plans: Remember to carefully examine the carpet area specifications and promised facilities, as the developer cannot modify the approved layout plan without the approval from two-thirds of buyers.
Benefits of RERA for homebuyers.
1. Regulation of construction quality: While buying any house or property, as a buyer you always worry about the construction quality of the property, but the RERA Act provides relief to the buyers. As per the RERA Act, if any structural defect occurs in the property within five years of possession, it will be fixed by the developer. The tenure of five years counts from the date of possession. The act also states that defects will have to be fixed within 30 days of notice, and not a penny will be borne by the buyer.
2. Buyers have to pay only for carpet area: RERA states that the value of the property will be determined or calculated on the basis of carpet area, instead of built-up area. Previously, many developers calculated prices on the basis of built-up area, which includes the area of walls and pillars. In short, previously, buyers had to pay for the space they were not using. But the RERA Act makes sure that you don’t have to pay for the space you are not using.
3. Penalty for project delays: As per the guidelines of the RERA Act, if a builder delays the project, you can ask for your refund and withdraw from the project. Also, if you don’t want a refund, you will be entitled to interest every month, starting from the due date.
4. No more false promises by builders: Under RERA, builders are now required to show their RERA Registration number with their advertisements. They can’t advertise anything that will not be delivered to the buyers, and if a builder wants to make any kind of change to the original plan, they will have to take the buyer’s approval first.
5. Quick grievance redressal: If a buyer has a complaint against a builder, agent, contractor, or builder, He/she can file it with the respective authority for quick redressal. RERA says that builders or developers need to resolve these complaints within 120 days of filling. Also, the act states that non-compliance with the regulations can lead to a penalty of up to 10% of the project cost.
6. No project to be sold until all the clearances are obtained: As per the guidelines for the RERA Act, all the builders, or developers, and agent are now required to register themselves with RERA. It is now compulsion for them to get all the important clearances before they can promote the project for selling.
7. Penalty on not giving possession on delivery date: According to the RERA Act, every developer is required to provide a delivery date for the handover of the possession of the unit to the buyer /allottee. In case the builder or developer is not able to finish the project by the promised date, they need to pay the penalties.
8. Protection against Fraud: A project that is RERA certified ensures that the builder follows all the legal and ethical practices. So, it reduces the chances of misleading advertisements, property scams, and project delays, offering buyers a trustworthy investment.
9. Increased Credibility for developers: For developers, obtaining a RERA certificate improves their credibility and market reputation. As a result, it builds trust among buyers and investors. As RERA gives them a safety net that their investment is safe. So, they trust the developer easily.
How to check whether the project is RERA-registered or not?
Before purchase, verify whether the project is RERA registered or not. This ensures transparency and protects you from fraud. However, if you are wondering how to check the RERA registration and approval of a project.
Here we are giving you a step-by-step process, through which you can easily check the project’s registration details.
Step 1: Visit the state’s RERA website.
Step 2: Once you open a website portal, you can use the search bar to find the project.
For example, you can search using:
· By RERA Registration number
· By the project’s name
· Builder’s name
Step 3: After searching, the website will show the project information, including
· Project’s registration number
· Project name and details of the developer
· Current project status (ongoing, pending approval, completed)
· Sanctioned plans and approvals
· Construction timelines (start and expected completion dates)
If the project name appears in the search results, it means it is registered with RERA. If the project is not appearing in search results, then it may be unregistered.
How to file a Complaint on the RERA’s portal
Step 1: Go to the official website of the RERA.
Step 2: Go to the complaints tab on the portal of the official website of RERA (https://rera.rajasthan.gov.in/Home), and after that, you have to select the option of whether to complain with the RERA authority or under an adjudicating officer
Step 3: The form can be filed online, for which various details need to be filled out.
Step 4: Fill the complaint form, address, and contact number are the necessary fields which need to be filled properly.
Step 5: Now, attach the supporting documents. One has to make an online payment or a bank draft of Rs. 1000.
Step 6: Then, after declaring his/her consent, click the submit button.
Step 7: Save the complaint reference number for future use.
RERA brings transparency between the developer and potential home buyers. Due to RERA, now companies take accountability and deliver project on time. The act also reduces the chances of fraud by making it important for developers to register their projects and standardising the calculation of carpet area, and due to this, builders are disclosing all the important details. With that, RERA registration provides a legal framework for solving or considering disputes, ensuring faster grievance redressal. Making the home buying process efficient and reliable.
Happy buying. Happy Investing.