RERA law and projects – A brief write up on RERA law and projects giving all important features of the new law by our legal service expert.
RERA stands for Real Estate Regulation and Development Act but it is popular as RERA because it means Real Estate Regulatory Authority. This is a central act brought by the Parliament in 2016 which became fully enforceable in all states in May 2017.
Since urban development is a central subject and land is a state subject, a balance has been kept by the central government by giving all the states to frame their own rules or pass their own acts. This has been done by many states and slowly RERA as a statutory body has been created in most of the states.
It’s a body of members nominated by the state government to regulate real estate in the state and to looks and enquire into any complaint against the real estate projects, builders, or developers.
They have powers to inquiry into the complaint and adjudicate the dispute and impose a penalty upon the builder if found doing anything in violation of RERA.
RERA applies to all projects above 500 Square meters or where more than 8 units are being constructed. It applies to all real estate projects of construction of housing, apartments, flats, villas, plots, or any other construction. It however does not apply to the projects which are completed before May 2016 or the redevelopment or renovation projects of the real state.
Important Features of Rera Law
i) Every state to create a regulatory body to regulate all real estate projects.
ii) No project to be sold without registration on the RERA website under any circumstances.
iii) All projects whether ongoing or new are required to be registered on the website of states RERA giving all details of the project with date of completion.
iv) All areas to be sold on the basis of carpet area which is defined under the RERA.
iv) Builder to maintain escrow account in which 70% of the money taken from buyers to be kept and all payments through the said account to be made to vendors on the certificate of the CA, engineers, architects only.
v) Builder or real estate developers to take only 10% as booking amount from the intending buyers, rest payments linked to construction progress.
v) Builder or developer to update about his project quarterly on the website or state RERA.
Vi) No change in the project plan by the builder without getting NOC from 60% of the buyers.
vii) The buyer has right to walk out the project on his own and claim the entire money he has paid with bank interest.
viii) If there is a delay of project, the buyer has right to claim his refund with interest and damages.
ix) Online complaint against the builders to the respective RERA website on which action is to be taken within 45 days.
x) Builder to give 5 years guarantee of the construction of the project for all structural defects, workmanship etc.
xi) Cancellation of the project by RERA if any information is found to be incorrect on verification.
xii) Blacklisting of the builder besides penalty based on project cost by the RERA. The builder can be imprisoned for up to three years, or have to pay the fine extended to 10% of the estimated cost of the real estate project, or both, if being non-compliant with the Act.
PROCESS OF BUYING PROPERTY IN RERA PROJECT:
The intending buyer should first verify the RERA registration of the project on the website of the state where the project is located.
He should also verify the entire details of the land, the ownership etc.
The purchaser should also verify the financial status and history of the builder, promoter of the project after taking out the balance sheet from the site of the MCA.
Entire details of the project should also verified by the purchaser from the sanctioning authority, if required.
Advance of only 10% is payable under RERA to the builder by the intending purchaser.
The purchaser or should always verify the updating done by the builder on the website of RERA on quarterly basis and report any variation to the RERA immediately through their website.
E mail ID of the builder as given on the website or RERA at the time of registration of the project should be used by the purchaser for seeking any information from the builder.
The purchaser should also verify all the formats used by the builder which should be in consonance with the format prescribed under the RERA rules of the respective state and if any violation is being done by the builder, it should be reported to the RERA.
Benefits of RERA law and projects
RERA is a very beneficial legislation which has brought transparency, accountability and regulation in the real estate sector. It has empowered the buyers or investor in the real estate which will lead to growth of urbanization and development of real estate of the country.
Most of the activity is online hence any buyer or person located remotely can also take up the matter with the RERA without running around and without depending upon the mercy of the builder.
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