Jun 16, 2023Investments

RERA Compliance: Steps Developers Need to Follow

by Godrej Properties Limited

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The Real Estate (Regulation and Development) Act, 2016 (RERA) has brought about significant reforms in the Indian real estate industry, aiming to protect the interests of homebuyers and promote transparency. For developers, complying with RERA guidelines is essential to operate legally and gain the trust of potential buyers. This article will outline the key steps developers must follow to ensure compliance with RERA and contribute to a more accountable and reliable real estate sector.

Advantages of RERA

RERA implementation offers several advantages for both developers and homebuyers. For developers, RERA compliance instils transparency and accountability, enhances credibility, and fosters trust among buyers. It also streamlines project management processes, promotes timely completion, and reduces legal risks. For homebuyers, RERA provides assurance of quality construction, timely delivery, and transparent transactions, along with access to grievance redressal mechanisms and increased confidence in real estate investments.

Ensuring RERA compliance is not only a legal obligation for developers but also a strategic imperative to build trust, enhance credibility, and foster long-term relationships with homebuyers, thereby contributing to the overall growth and sustainability of the real estate industry.

Step-by-Step Guide to RERA Compliance

Below are the steps to follow for RERA compliance.

Project Registration

Developers must begin by registering their projects with the state's RERA authority. The application process involves providing detailed information about the project, such as its location, layout plans, timeline, and financial aspects. The necessary documents and fees should be submitted as per the prescribed guidelines.

Financial Discipline

RERA emphasises financial transparency and accountability. Developers must maintain a separate escrow account for each project, where the funds collected from homebuyers are deposited. This account should be utilised solely to develop the registered project, ensuring proper financial management.

Adhering to Timeline Commitments

Developers must strictly adhere to the committed timelines for project completion and possession. Any delays must be adequately justified and communicated to homebuyers. RERA encourages developers to maintain realistic timelines, avoiding unnecessary delays and uncertainties.

Disclosure of Project Information

RERA mandates developers to provide comprehensive information about the project to potential buyers. This includes details regarding the layout, amenities, specifications, legal approvals, and any modifications made during the project. Accurate and transparent disclosure helps buyers make informed decisions.

Construction Quality and Standards

Developers should ensure that the project's construction adheres to prescribed quality standards. The use of approved materials, compliance with structural guidelines, and regular quality checks are crucial. RERA authorities conduct inspections to verify compliance and maintain construction quality.

Grievance Resolution

Developers should establish an efficient grievance-solving mechanism to address homebuyers' concerns and disputes promptly. They should provide a platform for resolving complaints and take the necessary actions to resolve issues fairly.

RERA Compliance for Builders: Key Points to Remember

Ensuring RERA compliance is essential for builders to adhere to regulatory standards and protect the interests of homebuyers. Key points to remember include registering projects with RERA authorities, providing accurate project details, and adhering to timelines for project completion and possession.

RERA Checklist Before Purchasing a Property

Before purchasing a property, prospective buyers should follow a comprehensive RERA checklist to ensure compliance and safeguard their investments. This checklist includes verifying the RERA registration status of the project, examining project documents and approvals, understanding project specifications, amenities, and timelines, and evaluating the reputation of the developer.

The Final Word: Embracing RERA Compliance

RERA compliance is a crucial aspect of the real estate industry in India. Developers need to understand and follow the guidelines laid down by RERA to operate legally, build credibility, and gain the trust of homebuyers. Furthermore, by ensuring project registration, financial discipline, adherence to timelines, transparent disclosure, construction quality, and efficient grievance solutions, developers contribute to a more transparent, accountable, and thriving real estate sector in the country. 

 

Frequently Asked Questions

1. What are the consequences of non-compliance with RERA guidelines for developers?

Ans. Non-compliance with RERA guidelines can result in penalties, including monetary fines, imprisonment, or cancellation of project registration. It can also lead to legal disputes and damage the developer's reputation.

2. How can developers ensure adherence to RERA timelines?

Ans. Developers should carefully plan their project timelines, considering realistic factors and potential delays. Regular monitoring, effective project management, and timely communication with homebuyers can help ensure adherence to RERA timelines.

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