The Real Estate (Regulation & Development) Act 2016 (RERA) that became effective from 1st May, 2017 is likely to revive the real estate sector by bringing in accountability and transparency. The Act is also expected to revive confidence of key stakeholders in the real estate sector.
Following are the important rules marked by RERA:
- Complete information to buyers: The promoter needs to issue an allotment letter to the buyer at the time of booking, including information like sanctioned plans, layout plans and specifications approved by the authorities. The promoter also needs to include details like time schedule of completion, and water, sanitation and electricity provisions.
- Booking amount: The amount to be paid by the buyer has been reduced from 20% to 10%, which should be paid only after registering the agreement for sale with the builder. Termination of the agreement is permitted only if the buyer defaults on payment thrice. Buyer is entitled to a 15-day notice.
- Registration: It is now compulsory for every builder to register projects with the housing regulatory body, including details like plans, approvals and other credentials.
- Advertisement: No promoter is allowed to advertise any project without registering under the real estate project with the Real Estate Regulatory Authority established under this Act. Additionally, each advertisement has to carry the RERA registration number.
- Compensation for delayed delivery: To counter the norm of delayed delivery, the promoter is now liable to return the total amount with interest at such rate as mentioned in the agreement to sale if he fails to give property possession within the agreed time period.
- Construction Quality: RERA provides protection against any structural defects up to 5 years, that might be found after possession. The promoter is bound to rectify found defects within 30 days, free of charge.
7.Discrimination prohibited: No buyer can be rejected on the basis of caste, gender or religion. This will prevent the practice of building homes only for particular groups while rejecting others.
- RERA will make it mandatory for all commercial and residential real estate projects where the land is over 500 sq. mt. or eight apartments will have to register with the regulator before launching a project.
RERA is a government body whose sole purpose is to safeguard the interest of buyers as well as lay a path so that the promoters and the real estate agents get a chance to come up with good services. The present structure of real sector is quite messy as corruption in the government bodies and opaqueness of the information is there. The policies in RERA have been made keeping in mind that due to the lack of activeness in the government work such as approval of a project, many promoters have to seek an unfair way to continue their work so that their massive investment in a project does not get lost.