With real estate projects fetching enormous profits, many companies entered the market. Some of them were fly-by-night operators indulging in fraudulent practices and fleecing innocent homebuyers.
To resolve this, the Government of India introduced RERA which put the buyer’s interests in the foreground. RERA made the homebuyer the king. Builders will have to ensure compliance to avoid punishment.
RERA protects a Homebuyer in the following ways:
Builders have to compulsorily register with RERA
A developer has to register with the regulatory authority before he starts to sell any plot. After registration, all advertisements inviting investment will have to bear a unique RERA registration number. The registration number will be provided project wise. Projects already ongoing on the date of the commencement of this Act are required to register within three months from May 1 2017.
Limitation on accepting advance payment: To further protect the interests of buyers, RERA mandates that a developer not ask for more than 10% of the property’s cost as advance payment before signing a registered sale agreement.
Restriction on using funds received for a project
The promoter is required to maintain a separate escrow account for each project and deposit 70% of the money received from buyers in that account. This money is to be used only towards the cost of the land and construction of the project.
Track status of projects etc
To foster transparency/accountability and instil confidence amongst homebuyers, builders are required to have trustworthy credentials before commencing any project. They need to register under RERA state authority and submit all information pertaining to clearances obtained from various departments and many other documents.
Many homebuyers suffer because of poor-quality construction material used in houses. RERA addresses this issue by ensuring a quality check and protection to buyers for five years from the date of possession. During this five-year period, if the buyer has an issue with the quality of construction the builder is under an obligation to rectify the same within 30 days.
Builders cannot delay delivery to homebuyers. Projects have to be completed on time failing which builders will have to compensate homebuyers with interest rate (State Bank of India’ highest marginal cost of lending rate plus 2%) within 45 days of it becoming due.
Speedy redressal of grievances: Grievances brought before the regulatory authority have to be resolved within 60 days.
GSS Project Consultants is a RERA registered agent. Our projects are RERA registered (wherever applicable.)