New home buyers in India find it hard to keep up with the developers, real estate agents and all the rules and regulations involved in the process. One policy that has tried to make this process less tedious is the Real Estate Regulatory Authority, 2016 (RERA). This came into force from May 2017 onwards and has brought merit to the sector. The Real estate sector before 2017 was considered an unregulated one especially in the metro cities around India, and with a constant flow of black money.
On the 19th of August 2019, at the National real estate development council convention. The housing and urban affairs secretary Durga Shanker stated that the government may soon consider amendments in the real estate law under RERA. Mishra stated, “Based on the inputs (received at the conference), we have felt that there is a need to bring about many changes in the RERA Act.” He added, “We will soon make relevant amendments in the law, to make it more effective.”
Here is a checklist to understand if RERA is applicable to the property you have purchased?
- The area of the plot under construction is 500 sq mts or more.
- The number of apartments under construction are more than 8.
- The Act does not apply to projects that are under repairs, renovation or redevelopment.
- The Act is only valid on development of property and not rentals.
- The Act covers all commercial projects like shops, offices, work spaces and buildings as well as residential properties.
Let’s take a look at the benefits the Act offers to buyers, the developers and the real estate sector.
Right To Information About The Property Through The Online Portal
As an online portal, RERA is a great way to work around every issue regarding your under-construction home. You can request for full layouts, plans, the date of completion and even the competition in your area. The Maharashtra Real Estate Regulatory Authority- MahaRERA website is one of the best RERA state platforms. It exhibits the most number of residential projects registered under it across the country. As per the norms in the Act, all real estate registered projects both commercial and residential must submit all of the registered project details on the RERA website.
Standardized Definition Of Carpet Area
Prices correspond with the carpet area of the property that is being purchased. The RERA act has defined a standardized definition of carpet area. This helps to eliminate any form of manipulation or inflation of property values through wrongful measuring of carpet area. These measurements were devised by each individual builder and acted against the interest of real estate investors. The RERA act thus protects the innocent buyers from any form of misguidance by the developer.
The Implications On Builders And Developers
As per the RERA guidelines, under-construction projects is funded firstly by money obtained from downpayments from home buyers and lenders i.e. banks and NBFCs. The RERA Act has given home buyers the ability to question the developers. If any builder is unable to provide satisfactory information regarding the under-construction project, he can get penalized under the act.
Section 7 states that projects, free from litigation, may form their own society and with the approval of 51 per cent or more of its members, can divest the developer from the project.
Section 8 further states that if the builder is pulled out of the project, the first opportunity of completing the project will be accorded to the society formed by the flat purchasers.
These sections of the RERA Act, help ensure that projects are not delayed and that the builders do not misuse funds, as they can be held responsible for any defect or fault in the construction of the project, in turn protecting the interest of the home buyer.
Keep a track of RERA Approved Real estate Agents
RERA-approved Real estate agents do make the sacred passage of home buying easier and more peaceful. They are aware of the projects that have been approved by the Real estate regulatory authority. They already have an understanding of the shortcomings of the developers and provide a clear picture of issues that the buyer could face and ways to tackle the issues.
All these factors make the Act a clear benefit for any new home buyer. It provides information to any home buyer and also makes it easier to settle on down payments, home loans and future home expenses.
All these factors have been giving homebuyers an assurance about their housing investments. Homebuyers are now heading towards a safer position in the property arena, where their investments now have accountability, which in turn makes it a favourable time to invest.
An additional resource that has come into play to help you own your dream house is down payment assistance.
Let HomeCapital help you commence your home-buying journey.