RERA: A Step Towards Building Trust in the Real Estate Industry

Introduction

Trust is one of the key aspects in the real estate industry, which must be withheld between the buyer and the seller. The Real Estate Regulation Act (RERA) ensures trust and accountability in the real estate landscape. Also, it brings transparency, and promotes fair practices. RERA approval means the real estate property is credible and buyers can feel safe to invest their hard earned money in such properties. 

Key Provisions of RERA

• Mandatory Registration: All real estate projects exceeding 500 square meters or eight units must be registered with RERA.
• Project Transparency: Developers must provide detailed project information, including approvals, timelines, and completion status.
• Escrow Account: 70% of funds received from buyers must be deposited in an escrow account, ensuring funds are used for the specific project.
• Timely Project Completion: Developers are obligated to complete projects on time or face penalties.
• Defect Liability: Developers must address structural defects reported within five years of possession, at no extra cost.
• Fair Pricing: Selling based on carpet area, not super built-up area, ensuring clarity in pricing.
• Grievance Redressal: Establishment of a fast-track dispute resolution mechanism for buyers.
• Advertising Regulations: Only registered projects can be advertised, preventing misleading promotions.

Benefits of RERA Implementations

One of the primary objectives of RERA is to protect the interests of homebuyers. Let's examine how RERA achieves this goal:

Transparency in Project Details

RERA mandates developers to provide complete and accurate information about their projects, including layout plans, financial aspects, approvals, and timelines.

Adherence to Timelines

RERA ensures that developers commit to realistic project completion and possession timelines. This provision prevents unnecessary delays and uncertainties.

Escrow Account for Fund Management

RERA requires developers to maintain a separate escrow account for each project. This account safeguards by ensuring that the money collected from homebuyers is utilised only for the project's development.

Grievance Solution Mechanism

RERA establishes state-level regulatory authorities and appellate tribunals to resolve disputes between homebuyers and developers. This mechanism provides a suitable platform for resolving conflicts.

Promoting Transparency and Accountability

RERA act is pivotal in promoting transparency and accountability within the real estate industry.

Project Registration and Regulation

RERA mandates developers to register their projects with the respective state authorities before marketing or selling any units. This registration process ensures that only credible and legitimate projects can operate.

Compliance with Guidelines

RERA guidelines include project specifications, construction quality, financial transparency, and marketing practices. Developers must adhere to these guidelines, ensuring compliance and accountability in all aspects of project development.

Penalties for Non-Compliance

RERA empowers regulatory authorities to impose penalties and sanctions on developers for non-compliance with the prescribed regulations. This strict enforcement is a deterrent to unethical practices.

Promoting Ethical Business Practices

RERA fosters a culture of ethical business practices by encouraging fair dealings, transparency in financial transactions, and responsible marketing practices.

The Final Word

RERA registration process has a standardised framework that must be followed by the real estate developers. A RERA approved property has increased trust from the home buyer. It solidifies builder position on the market as a trustworthy realtor. Top builders like Godrej Properties offer RERA approved properties with proper documentation. By investing in a RERA approved property, buyers can have peace of mind that their investment is in a safe place. 

Frequently asked questions

1. What are the penalties for non-compliance with RERA regulations?

Ans. Non-compliance with RERA regulations can result in penalties, which vary based on the severity of the violation. Penalties may include monetary fines, imprisonment, cancellation of project registration, or a combination of these measures.

2. How does RERA ensure transparency in financial transactions?

Ans. RERA mandates developers to maintain a separate escrow account for each project. This account ensures that the funds collected from homebuyers are utilised only for the specific project's development, promoting transparency in financial transactions.

3. Who does RERA apply to?

Ans. RERA applies to all real estate developers, builders, and agents involved in residential and commercial projects exceeding 500 square meters or eight units. It also covers homebuyers, ensuring protection, transparency, and regulation of real estate transactions across India.

4. What are the penalties for non-compliance with RERA regulations?

Ans. Penalties for non-compliance with RERA regulations can include fines up to 10% of the project cost for developers and imprisonment of up to three years for severe violations. Real estate agents may face fines up to 5% of the property cost for non-compliance.

5. How can homebuyers verify if a project is RERA-compliant?

Ans. Homebuyers can verify RERA compliance by checking the project's registration details on their state's official RERA website, which provides information about approvals, timelines, and developer credentials. It's essential to confirm the project's RERA registration number for authenticity.