The Real Estate Regulatory Authority (RERA) Act was launched in May 2017 to safeguard the interests of both property owners and the investors. It is a regulatory body which effectively addresses the issues related to properties like delivery delays, pricing, title, grievances, quality of construction and etc. It creates a mechanism to provide fair, efficient, quick and transparent resolutions. This act has established a mechanism for speedy dispute redressals along with protecting the interests of the buyers.
Every state and union territory has to maintain a separate cabinet for the real estate sectors where the realty builders will register and update their projects. This is a compulsory action to be taken for all residential and commercial real estate projects whether they are new or on-going. The land coverage of over 500 sq.m or eight apartments is the minimum criteria set by the regulatory authorities.
As a buyer, how will RERA protect you?
RERA is a central law, but the responsibility of implementation and maintaining is with the state governments. The state-specific Regulatory Authority (RA) will create regulations and rules as per the RERA Act for their respective locations. Below is a list of several provisions in the act to protect the rights of the buyers.
Project Transparency – Authenticity and clarity in project execution and marketing are regulated by the RERA act. It is mandatory for all commercial and residential realty project developers to register with RERA in order to launch a project. This also includes the promoter to submit all legal affidavits with a written declaration. All information about the project along with the estimated timelines or phases is mentioned in them. The buyer should always go for projects which a unique registration number from RERA.
Project updates to the Authority – The project builders would have to upload details on a quarterly basis related to number and types of units sold out, any government approvals or pending checklist along with a schedule of completion. This also includes the submission of sales agreement done between both the parties. Any variation from the committed delivery date (date of possession), would penalize the developer. As a buyer, you can check online everything about the project on the RERA website.
Protect Buyers Money – The builders will now be required to create and maintain a separate “escrow account” in which they will have to transfer and deposit 70% of the amount received from the investor in a scheduled bank. This protects the buyer’s investment to be efficiently utilized and spent on the specific project. Any withdrawal from this account could only be done after the approvals from engineer, architect, chartered accountant and the extent of completion of the project.
Protect Buyer rights – The act makes it a legal offence if any builder is non-compliant to the regulations of the RERA act. For any unlawful activity, the builder can even lose the registration of the project. For any delays in the delivery, compensation needs to be given to the buyers as decided by the Regulatory Authority. The act also states both imprisonment and penalty in cases of counterfeit.