What is RERA (Real Estate Regulatory Authority Act)?

by Godrej Properties Limited

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In order to ensure effective and transparent commercial transactions in the real estate sector, the Indian government passed the Real Estate Regulatory Authority (RERA) Act in March 2016, which is a real estate regulatory act. Developers, buyers, real estate agents, and other real estate sector stakeholders' interests are all protected under the RERA act. RERA's numerous reforms have provided the Indian real estate sector with its first regulator. Understanding RERA's requirements, which are imposed on all states and union territories, can assist you to traverse the otherwise complex real estate business procedures.

Buyers, developers, and the industry at large can all profit from the Real Estate Regulation Authority. The RERA act strives to protect the interests of purchasers and developers like Godrej Properties; consumers and sellers equally because RERA restrictions apply to both residential and commercial buildings. Let's examine them in more detail.

Benefits of RERA for homeowners

  • Builders are required by RERA to post all relevant information about their projects on the organisation's website. Additionally, they must regularly update the content of the website. This further increases the transparency of project deadlines for buyers.
  • According to RERA regulations, consumers pay for the property based on the carpet area or the space contained by walls. Builders are thus prohibited from charging homebuyers for the built-up areas, which include balconies, elevators, stairwells, and lobbies.
  • Builders are required to deposit 70% of the homebuyer's funds into a separate bank account for construction. Customers can therefore be confident that their money is secure and that its use is disclosed.
  • According to RERA, developers are not allowed to charge the buyer an advance or application fee that is more than 10% of the project's cost.
  • RERA monitors the prompt completion of projects. Developers are required to pay homebuyers 2% more interest than SBI's MCLR in the event that a project is delayed.
  • After receiving a handover, homebuyers have up to five years to report any building flaws and request that the developers make the necessary repairs. Developers are required by RERA to settle disputes that have been filed within 120 days.
  • A majority of homebuyers must agree in order for the builder or developer to make changes or additions to the building design.

Benefits of RERA for developers

  • Real estate developers now feel more confident about investing in projects, which results in more investment.
  • The sector-wide organised funding has benefited developers.
  • RERA has made corporate branding possible, and developers have undoubtedly benefited from it.
  • For increased uniformity, all builders and homebuyers will sign a single model sale agreement.

Benefits of RERA for the real estate industry

  • RERA guarantees effective governance and integrity in real estate business transactions.
  • The amount of project delays has significantly decreased because of RERA's requirement that builders and developers register before the commencement of their projects, which has also resulted in robust project execution and efficiency.
  • The Indian real estate market now has greater accountability, uniformity, quality, and standardisation thanks to the RERA Act.
  • Higher investments and PE finance into the real estate sector have been made possible because of the RERA Act.
  • RERA has contributed to preserving a regulated environment ever since it was established.

Penalties under RERA

If developers do not register with RERA, they must pay 10% of the project's anticipated cost. Furthermore, if they provide inaccurate information about the project, they will be charged 5% of the anticipated cost.

Violations of the law can result in fines up to 10% of the project's anticipated cost or up to three years in prison.

In the event of non-compliance with RERA, buyers must also pay a daily penalty of up to 5% of the estimated cost of the project. On the other hand, failure to comply with the Appellate Tribunal carries a penalty of up to a year in prison, 10% of the estimated cost of the project, or both.

What does it mean to have RERA approval?

Simply said, being RERA registered equates to RERA approved. Every builder must abide by certain rules in order to register their project, including those relating to approvals, land titles, insurance, etc.

How can I make sure a property complies with RERA?

Before commencing or marketing a project on a specific property whose area is greater than 500 square metres, builders must first register the property under the RERA Act.

Builders are required to show evidence that they have put 70% of the entire amount into a separate escrow account rather than using it for another investment.

Before promoting a new project, builders must obtain all required approvals. Early bird discounts and pre-launch deals will no longer be available.

How to check RERA registered projects? and How to check the RERA number?

With so many real estate developments, under construction or completed in India, many are confused about how to check RERA registered projects.

Every state has its own portal or website to check the RERA status. For the state of Maharashtra,

  • Visit this website: maharera.mahaonline.gov.in
  • Select "Registered Projects" from the "Registration" menu. Choose "Registered Projects" from the list of searchable project details.
  • Click "Search" and enter the project's name.
  • The project's information will show up in the search results. By selecting "View," you may view numerous project details, such as the project's location, type, current status, and anticipated completion date.

Homebuyers should pick an RERA-registered project like the ones from Godrej Properties to make sure their investment is secure. The Real Estate Regulation Authority makes the real estate market more organised and transparent while defending the interests of investors and homebuyers. The RERA has jurisdiction over about 70% of all real estate projects in the nation.

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