The Real Estate (Regulation and Development) Act, 2016 is an initiative of the Government of India that ensures adequate transparency in the real-estate sector. The Act was passed by the Rajya Sabha on March 10, 2016 and by the Lok Sabha on March 15, 2016.
RERA seeks to protect the interests of home buyers
The Act seeks to protect the interests of consumers while also ensuring real-estate developers complete their projects within the promised deadlines. This article is your definitive guide to RERA Act:
1. Authorities in States
- The RERA Act requires states to set up authorities to regulate and promote the real-estate sector.
- The state authorities established under RERA also aim to promote real-estate and ensure equity in all transactions for complete transparency.
2. Guide to RERA: Types of projects covered
- RERA applies to both commercial projects as well as residential real estate projects.
- The Act also applies to both incomplete as well as ongoing projects.
- New projects to be launched by real-estate developers would also be covered under the provisions of the Act.
- It is important for a buyer to understand the difference between the carpet area and the super built-up area, which is also covered under RERA.
- Super built-up area includes staircase, lobby, etc. while the carpet area is the region covered within, covered by the walls and is the actual space where you’ll live.
3. Power to home buyers
- The Act aims to empower home buyers who are entitled to obtain the layouts, sanctioned plans, and time schedule of the project from the developer.
- The home buyer can also claim refund along with interest in case the developer fails to fulfil the promises made.
- The buyer can ask for the legal documents of the land when the construction starts and also has the right to know the time period in which the project would be completed.
- RERA also keeps a check on the quality of the construction. Buyers are protected from poor quality construction with the provisions of the Act.
Buyers have the right to know the project completion timelines
4. With power comes responsibility
- The home buyer must make all payments to the developer as per the agreement of sales in a timely manner.
- The buyer must also pay all relevant taxes, registration charges, and stamp duty.
- The buyer must take the possession of the property within the prescribed timelines when the statutory authority issues the occupancy certificate to the developer.
5. Choosing a developer
- Buyers must always focus on projects that are put up by reputed developers with a good financial standing and an established track record.
- Developers need to register themselves with the regulatory authority and ensure that the provisions of the Act are followed.
- Project details are uploaded on the RERA website once the developer is registered. Before you buy a home, make sure to check the developer’s registration with RERA.
6. The Agreement of Sales
- The Agreement of Sales is an agreement between the home buyer and the developer in accordance with the provisions of RERA and is binding on both.
- The home buyer can withdraw from the project if the developer or the builder does not hand over the property by the date that has been mentioned in the sales agreement.
- The developer/builder would compensate the buyer for the full amount paid along with the interest for the period in case the buyer chooses to withdraw from the project.
- If the buyer does not withdraw from the project, he is liable to get a compensation monthly from the developer with interest for every month during the delay period. If the builder/developer does not agree to compensate the buyer, the consumer has the right to file a complaint with the regulatory authority.
- In the event of a dispute, there is no need for a consumer to hire a lawyer. He could either appear himself or hire a Chartered Accountant or Company Secretary or a Cost Accountant.
The Agreement of Sales is signed in accordance with the provisions of RERA
Wrapping Up: RERA and Real Estate
RERA is formulated in the interest of buyers and covers all residential as well as commercial projects in every state. The Act aims to make real-estate transactions fair and transparent and ensures that projects are completed in a timely fashion.
Builders and developers need to get the details of their projects published on the website of the regulatory authority.