Real estate as a sector was having a lot of loopholes when it came to rules. Using these loopholes, there was a risk for homebuyers and stakeholders whenever investing in property.
RERA, also known as the Real Estate Regulatory Authority was brought to existence by the Real Estate Act of 2016 to protect the rights of buyers. The major idea was to mitigate risk and promote real estate investments.
Now that we know what RERA act is and why it came into existence, let’s take a look at the key points under it.
4 key points under the RERA Act:
With the RERA act in implementation, the builders have to submit the original plan of construction upfront, and it is not to be changed without the permission of stakeholders.
Before RERA, the builders had a free hand on taking advance payments from buyers. This often puts homebuyers at risk. To eliminate this, RERA states that a builder can only take a 10% advance from the buyers.
A minimum of 70% of the buyers’ and investors’ money must be kept in a separate account and is only to be used for land or construction-related expenses.
After the purchase of a property, the builder is responsible for rectifying any issues with the property for the 5 years post-purchase. These issues have to be resolved within 30 days of the issue being raised.
Before the RERA act came into existence, the builders used the “super built-up” area to sell homes. What this did was showed an increased size of the place and thus they were able to charge more money for the property.
With the RERA act, it was defined that a property is only supposed to be sold in terms of “carpet area” which is the most accurate measure of property.
All the above 4 points have enabled buyers to be more secure and confident in real estate investing.
Now, let’s take a look at how these points are beneficial for homebuyers.
7 ways in which the RERA act is beneficial for buyers:
We will take the above-mentioned points into reference when discussing the benefits of the RERA Act.
1. Standardized carpet area: A fixed standard so that you can get the right and fair price for the property.
2. Rate of interest on default: This means that the interest is paid the same by both parties on defaults.
3. Reduces the Risk of Builder Insolvency: This ensures that the project is well funded and shows you that it is a legitimate property to invest in.
4. Right of the Buyer in case of False promises: This helps you claim a full refund of payment in case the project is not delivered as initially promised by the builder.
5. Fixed Advance Payment: Under the RERA Act, the builder cannot take more than 10% of the cost of the apartment as advance.
6. Right of the buyer in case of Defect after possession: if there are any structural defects, the builder has to fix the issue within 30 days at no extra cost.
7. Rights of the buyer Delay in possession: You can withdraw from the project with a full refund or you can wait for the project to be completed and the builder will pay the compensation for the delay.
We hope this article gave you insights into the RERA act and how it is beneficial for you.
At Esspee Group, all our properties go through a thorough inspection and follow governmental norms to deliver quality.
Do share this article with your friends and family and educate them about the RERA act.