A dream home is a dream of countless homeless people. We all wish to be our own house. And we save our lifetime income for buying our home sweet home. But before buying property lots questions arise in our mind. Are we investing in the right place? Builder is paper wise correct or fake? The builder-buyer agreement is right or we are cheated? To solve this problem the government has introduced RERA for home buyers. Let me tell you in detail. What is RERA & why RERA is important?
Before this Act almost every builders and developer of India have their own rules and regulations. They tried to impose their terms and conditions on property buyers. They had a very limited right. Although buyers are paying for the property, it will be their house in the future. But developers did not give them full authority. That is why it has introduced, to protect buyers’ rights.
What is the Regulatory Authority act ??
The Real Estate Regulatory Authority (RERA) is an act introduced by the Indian government in 2016. The main concern of Axt is to protect property buyers’ right to being exploited. Its main aim is to provide relief to the buyers from unfair norms of builders and developers.
RERA has made some guidelines regarding constructing and developing the estate. Now it will bring transparency between buyers and developers.
Because the estate is a leading revenue-generating sector in India. The sector needs stress free, buyers’ friendly Act.
The RERA solves the buyers’ problem and provides several rights. And also installed some rules for builders and developers to follow.
Why RERA is important in real estate?
Indian real estate needs RERA because to add confidence in India’s estate sector. Because it is one of the leading sectors of India. And it needs transparency, authority to keep an eye on its working strategy. In fact, it is now working as a spotless ground for buyers. And also minimizing the risk which was faced by buyers before introducing the act.
The act is bringing clarity between property buyers and property developers. It is building trust between sellers and buyers. In fact, it has established a state authority to government real estate and commercial transactions.
Now RERA is helping home buyers a timely delivery of their estate project. That is a great relief for homebuyers across India.
Major benefits of RERA in India.
1. Uniform carpet size
Before installing the real estate act. Builders used to sell property according to their carpet area size. This means they had no standard measurement for the property. And they used to sell property according to their carpet size measurement.
But now the government has given a standard carpet size measurement. And all builders, developers have to follow the carpet size mentioned by the authority.
2. The interest rate on the failure of the project
In earlier days before 2016 when buyers were unable to make payment. And they became a defaulter somehow. In that case, buyers had to pay a high rate of interest to the developers.
But if it was builders’ default, and they were unable to complete the project on time. Then they paid a low rate of interest to buyers. And it was very unfair practice done by estate developers.
But the RERA Act has solved all these nonsense actions.
3. Diminish the builder risk of bankruptcy
Earlier in many cases, you have seen that builders turned defaulter. Or many developers left the project incomplete. And homebuyers had to face many problems. Sometimes builders used the given fund in another upcoming project. All these practices were a great matter of concern for home buyers.
But now builders would not carry on these practices. Now they have to keep 70% of the sanctioned amount in a separate bank account. They can not use the fund for another project. This means a particular fund is separated for a particular upcoming project.
He can withdraw those specific funds only at the time of completion of the project. Which will be certified by a civil engineer, architecture and charted account in practice.
Collected funds can be only used for the purpose it has generated. This will ensure buyers that their money will not be used in another project.
4. No excess advance payment
Now builders can not charge more than 10% amount as advance or application fee before the final agreement of sales.
5. If property get defect within five years
After the possession over the property to buyers. If homebuyers found any structural or quality defect within 5 years of duration. He has the right to contact the builder to maintain the damage at no extra cost.
If in case of developer deny doing so the buyer can claim compensation.
6. Right to buyers in case of delay
If the developer fails to complete the project due date. The buyer has the right to withdraw from the project, and also liable for a full refund.
7. Right to information
Buyers have all the secured right to know information related to the project, design, layout, time of completion.