What is RERA?
Real Estate Regulatory and Development Act is the full form of RERA.
Implemented on 1st May 2017, it aims to regulate the real estate sector of India with a strict hand. RERA Act 2017 has not only empowered the buyers but also shaped the total regulation of the activities of the builders to increase the transparency in real estate sector.
Salient Features Of RERA:
There are certain features of the RERA Act which makes the RERA rules totally consumer friendly and appropriate for managing any transaction relevant to the real estate, they are:
• More security to the investment made by the first time home buyers
• Better assurance of timely possession
• More strict actions against any fraud or false promise
• digitization of all records, to reduce loss of data.
• Quick remedies for any dispute
Difference between Old Rules and New RERA Rules
The Real Estate Development and Regulatory Act has brought several changes in dealing with the real estate projects. Read this article to know how it has changed the scenario of the buying and selling of the real estate properties:
Registration:
Before RERA: Before 2016, many projects started their transaction without a valid registration. Neither the authority, nor the law were much serious regarding the registration and security of the buyer’s rights.
After RERA: RERA Act has made the cumpulsory registration of each project. Registration is required to proceed with the construction, sell any plot or flat, take any advance, make advertisement for selling, or get into any agreement.
Advertisement:
Before RERA: Before the Act came into existence, Advertisements were published anytime, and people were shown a empty plot and designs on the paper. False promises were made that a project will be constructed over there, but often, no project took place even after few years.
After RERA: RERA rules clearly bans any kind of false promise. If a rooftop swimming pool is promised, it has to be delivered, if a 8 ft/3 ft balcony is promised, they can not reduce it to 6ft/2ft. Even if they have not mentioned in the agreement but have mentioned in the advertisement, they are liable to that.
Transferring Right:
Before RERA: Before the implementation of RERA Act, the buyer were often not informed even if the project was transferred from one builder to another. Previous owners refused to respond to the buyer facing any issue, stating the reason that the previous owners does not have any more responsibility towards the project. This highly harassed mostly the home buyers.
After RERA: The Real Estate Development and Regulatory Act made it compulsory that any project which is being transferred to any other person, it requires to get notified to the allottees, investors, buyer, and the authority. The name and the ownership will be changed on the documents. Everything must be done in the prescribed way. Previous owner shall not be released from the responsibility until the total procedure is completed.
Timely Possession:
Before RERA: Before the Act took the matter into its grip, there was no assurance when the property would be delivered to the buyer. Often it made delay of 10-15 years, which is really stressful matter for a common man. Many times, the project was not even started on the promised delivery day. The builders and sellers also used to get unresponsive to that problem.
After RERA: The Real Estate Development and Regulatory Act imposed certain rules regarding the delay in possession. If the possession is delayed for an unreasonable period, the buyer gets certain options like - alternate shelter till the project is completed, money back policy along with interest or alternate residence of same standard that has been promised by the builder. In the alternate residence, if any extra cost is required, the builder shall bear it.
Quality Material:
Before RERA: When the sale deed of a property or a plot is prepared, it is necessary to write the quality of each essential materials those are to be used. Often it was seen that, the material used were of lower quality that has been promised, which resulted in earlier decay and damage to the products. When a person spending his hard earned money in projects, it is really a fraud happening on such person.
After RERA: After Real Estate Development and Regulatory Act came in force, it became compulsory to use the promised product and if any issue appears, materials of similar quality is to be used. The builder will be liable to pay compensation for using worse quality products. The victim can claim for a compensation from the builders if anyone has suffered any loss due to usage of such material even later on.
Carpet Area:
Before RERA: Previously, the builders used to play a trick game. They either used to mention ‘area of xxx sq. ft.’ or 'carpet area of approximately xxx sq ft.'. Later on they used to defend that, there is a difference between total area and the carpet area or they never promised the exact carpet area. Such tricks are not easy to understand for a common person. This way, he often was not getting an area for which he has paid.
After RERA: The Real Estate Development and Regulatory Act made it compulsory to mention the exact carpet area or the reasonable variation of that. For example, now the builder has to mention ‘carpet area of xxx sq. ft, more or less by yy sq.ft’. If the flat is of lesser carpet area, the buyer shall pay only for the area he is under possession.
Essential Documents:
Before RERA: Before this Act came into existence, the buyers hardly used to get any essential documents other than the sale deed in their hand, which always kept them in ambiguity regarding the project.
After RERA: After the Real Estate Development and Regulatory Act got implemented, all the builders are obliged to handover necessary documents related to the details of the project and the area or plot where the person is investing his money. The documents include - brochure, copy of registration, copy of the drawing of the flat and the project where he is investing.
Bankruptcy:
Before RERA: Bankruptcy of the builders terrified the buyers in previous time. The builders often after taking money from the buyer, leaving the project incomplete, used to declare himself bankrupt. That used to safeguard him from any liabilities, and ultimately it is the common people who used to suffer an irreparable loss.
After RERA: As per the Real Estate Development and Regulatory Act, the builder has to open a separate account for the project under consideration. This account must be totally separate from the personal account of the builder or any of his relative/friends. The builder has to deposit 70% of the total raised money in that separate account, which will be used only for the purpose of the project.
Post Possession Liabilities:
Before RERA: Before RERA was implemented, the builders used to go totally non-responsive towards any issue occurring to the project. The law prescribed that any damage occurring within 6 months of possession (legal/physical whichever is earlier), due to the manufacturing fault, shall be taken care of by the builder.
After RERA: The Real Estate Development and Regulatory Act has extended the period till 3 years from the possession.
Therefore, RERA has brought a drastic change not only in regulating the real estate laws, but also brought the buyer and the seller under tight observation.
Documents required for registration under RERA
Following documents should be enclosed in hardcopy with the application:
| Service | Price | GST | Total |
|---|---|---|---|
| RERA Registration | 1000.00 | 180.00 | 1180.00 |
