What is RERA and Why is it Important?
Rera For many homeless people, a dream house is a milestone achievement. We all want to live in our own homes. We also set aside a portion of our lifetime earnings to purchase our new house. However, before purchasing real estate, we have a lot of questions. Are we putting our money in the proper place? Is the builder genuine or a fraud? Is the builder-buyer agreement valid or have we been scammed? The government has implemented RERA for house buyers to address this issue. Let me explain in more detail. What is RERA and why does it matter?
Almost every developer in India had its own set of rules and regulations prior to the Act. They attempted to force their terms and conditions on consumers of real estate. They just have a restricted authority. Despite the fact that purchasers are paying for the property, it will eventually become their home. However, the architects did not grant them complete authority. That is why it was created, in order to defend the rights of buyers.
What is the Real Estate Regulatory Authority (RERA)?
The Indian government passed The Real Estate Regulatory Authority (RERA) Act in 2016. The Act's primary goal is to safeguard property buyers from being cheated. Its primary goal is to protect consumers against unfair building and development standards. RERA has established several criteria for the construction and development of real estate. It will now bring buyers and developers close together.
Because real estate is one of India's most profitable industries. The industry needs a stress-free, customer-friendly Act. The RERA solves the dilemma of consumers and gives them many rights. In addition, various regulations for builders and developers were implemented.
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Importance of RERA in Real Estate
RERA is necessary for the Indian real estate sector to gain trust. Because it is one of India's most important industries. It also requires openness and authority in order to maintain track of its functioning approach. In reality, it currently serves as a pristine buying ground. As well as reducing the risk that buyers experienced prior to the act's implementation.
The act clarifies the relationship between property buyers and developers. It is the process of establishing trust between suppliers and purchasers. It has even created a state agency to oversee real estate and business transactions. RERA is now assisting house purchasers in receiving their real estate projects on schedule. This is a huge comfort for Indian homebuyers.
Benefits of RERA in India
Uniform Floor Area
Prior to the adoption of the real estate act. Builders used to market homes based on the amount of floor area. This suggests they didn't have a standard for measuring the property. And they used to sell houses based on the size of their floor.
However, the government has since established a standard floor area measuring. And all housing developers must adhere to the authority's floor area requirements.
Penalties for Project Failure
Before 2016, there were times when customers were unable to make payments. And they somehow become defaulters. In such a situation, buyers were required to pay the developers a hefty rate of interest.
If, on the other hand, it was the builders' fault and they were unable to finish the work on time. Then they charged purchasers a cheap interest rate. And it was clearly discriminatory conduct on the part of real estate developers. However, the RERA Act has put an end to all of these ridiculous efforts.
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No Risk of Builder’s Bankruptcy
You may have seen that builders have become defaulters in the past. Alternatively, a large number of developers abandoned the project. And buyers had to deal with a slew of issues. Builders have been known to divert funds from one project to another. For house purchasers, all of these tactics were a major cause of anxiety.
However, these methods would no longer be adopted by builders. They must now hold 70% of the sanctioned funds in a separate bank account. They are unable to use the funds for another venture. This signifies that a certain fund has been set aside for a specific impending project.
He will only be able to withdraw such funds once the project is completed. Which will be verified by a practicing civil engineer, architect, and chartered accountant. The cash collected can only be utilized for the purpose for which they were gathered. This ensures that customers' funds will not be utilized for another project.
No Extensive Amount of Advance Payment
Before the final agreement of sales, builders can no longer charge more than 10% as an advance or application fee.
Five Year Period
After the property is handed over to the buyers. If a customer discovers an architectural or quality fault during the first five years of ownership. He has the right to contact the builder to have the damage repaired at no expense to them. If the developer refuses, the buyer has the right to compensate.
Buyer’s Right in Case of Delay
If the developer does not finish the project by the deadline. The customer has the option to drop out of the project and receive a full refund.
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Right to Information
Buyers have a protected right to know about the project, including its design, layout, and completion date.
A positive policy shift is a significant boost to a rising economy. Consumers would gain from investing in a wealthy nation like India, which is a rising market for maximizing returns, with RERA likely to revolutionize the real estate industry.