How does RERA save you from real estate fraud? 10 benefits of investing in RERA-certified property

Mehta ji had almost lost 10 lac rupees on a property deal that failed to take off. Luckily it was a RERA-certified property and he got all his money back, with interest!

However, not everyone is as lucky as Mehta ji.

Don’t be like others. Be like Mehta Ji.

Invest exclusively in RERA-certified projects and protect your lifelong savings from going down the drain.

So what is a RERA? What do we mean by a RERA-certified property? And what are its benefits?

Let’s go through each of them one at a time!

What is RERA?

• ‘Real Estate Regulations Act’ or RERA was enacted in 2016 to protect homebuyers from fraud and discrepancies in the real estate market. It aims to make developers accountable to homebuyers, bring transparency in transactions, and standardize the rules of the game to offer every stakeholder a level-playing field. The regulation establishes a regulatory authority for dealing with property-related disputes between consumers and developers.

What is RERA Certified real estate?

• Almost all of the real estate ads you see, hear, or watch are RERA certified. Marketers especially mention the RERA number of the property to give it authenticity. Always look for the RERA number of the property before showing interest in it. Do a google search with that number and you get all the details of the property on your screen.
• But with so much at stake, we can’t simply leave it to chance. Let’s know when a property/project comes under RERA…

Your home or piece of real estate comes under RERA…

• If the project you are buying a home, shop, office, or other structure under has a total developed area of over 500 square meters.
• If the project has more than 8 flats.
• Even if the developer is marketing/promoting/selling/redistributing a plot or project after renovating/redeveloping it; it comes under RERA.
• RERA does not apply to real estate you rent out. It only applies to the realty – residential and commercial – you purchase.

Now let’s move to the last and most important part. “Why should we buy only RERA-certified property?”

Here are 10 benefits of investing in RERA-certified real estate:

• Quick and effective resolution of disputes/grievances :- The biggest benefit of RERA has been its quick and effective grievance redressal mechanism. No more moving from pillar to post, day in and day out, through the quagmire of litigations in courts in elusive search of justice. Think your builder or developer hasn’t lived up to his commitment, or if there are other issues you want to be sorted out legally, just approach the Appellate Tribunal under your state RERA. The authority is liable to hear your case under 60 days. Provided that you submit enough evidence in your favor, you win the case and get the compensation you deserve.

• Standardized carpet area – slashing cost and fraud :- Carpet Area, Built-up Area, Super Built-up area, there are many real estate terminologies to measure the area of your house/flat/apartment/residential space. Since the money you pay is on the basis of per square foot area, any discrepancy in how the area is calculated – by you and the developer – can be a financial and emotional setback for you. How will it feel to realize that you paid for more area than what you actually got? Yes, this has been the most common complaint against a builder in India. Let’s first know what each of the terminologies means: Carpet Area = All the Rooms + Kitchen + Washroom + Hall + Area of internal walls Built-up Area = Carpet Area + Area of External Walls + Balcony/Terrace/Veranda Super Built-up Area = Built-up Area + common areas you share with your immediate neighbors such as Lifts, Staircase, Corridors, Shafts, and so on So we can say that the ‘Super Built-up Area’ is more than the ‘Built-up Area’ is more than the ‘Carpet Area’. And more often than not developers end up charging you for the built-up area rather than the actual living area which is the carpet area. And you feel cheated! Not with RERA anymore! RERA instructs developers to charge customers exclusively on the basis of Carpet Area thus removing any confusion and scope for cheating. Moreover, this has also brought down the real estate cost to homebuyers to some extent. Cost of Property = Carpet Area x Rate per square foot However, a pitfall of RERA is the inclusion of internal walls in the carpet area. Just so you know, the percentage of the area taken up by internal walls in a smaller apartment is much more than in bigger apartments of the same specification. This means if you buy 2-BHK flats of 800 square feet and 1600 square feet respectively, you get more than double usable space (carpet area) in the latter. So my suggestion is to go for a larger carpet area if you can afford it!

• Full Refund in case of False promises :- Did you get less carpet area than promised? OR the size and the view from the balcony is not as grand? Maybe the developer has cut short on amenities to fit the budget.
There are many ways a developer can cheat you. But there is one solid way for you to get back at him – through RERA. RERA enables you to withdraw from the project – and get a full refund with interest – in case of fraud or false commitment by the developer.                    

• Full Refund with interest in case of possession delay :- Gone are the days when you can only cuss the builder for possession delay. Not anymore under RERA! If the builder fails to give you possession at the agreed time, you are entitled to a full refund – provided that you choose to withdraw from the project. You even get the interest for the interim duration – from the day you withdraw from the project to the day the final payment is made by the developer. Even if you decide to wait you command compensation for the duration. Here is how it works… For example, let’s assume the project was due for completion on 30 December 2020. However, it finally reached completion on 30 March 2022. And you waited all along – 15 more months than promised – to get hold of the flat. In this case, you receive interest every month for 15 months as compensation.

• No more exploitation in the name of Advance Payments :- RERA has put an end to erratic demands of property brokers when it comes to the amount of down payment which used to vary for every customer as per whims and fancy of the real estate agents. Now the builder cannot ask for more than 10% of the cost of the property as advance or application fees before entering into an agreement of sale. To simplify, for a property worth 60 lac rupees the maximum booking amount/token money/advance payment a builder/agent can ask you is 6 lac rupees.

• Free repair under 30 days in case of faulty property :- You were happy and excited to get hold of the property. Everything looked new and beautiful. But a few months down the line, the structure starts to show defects in workmanship, quality, provision, or service. And you feel short-changed. With RERA, you are entitled to get it renovated – in under 30 days – by the developer for free. Provided that you discover, and raise a complaint, within 5 years of possession. In case the 30-day mark is breached, you command compensation.

• No More Fund diversion leading to the timely completion of the realty project :- Developers often have their hands in multiple realty projects. And one of the easiest (but evil) ways to generate funds was to siphon off money from Housing Project A to Commercial Project B. This diversion of funds often diluted the quality and delayed the completion of Project A – upsetting and exploiting the homebuyers in the process. RERA has done away with this malpractice. For good! Now the builder has to deposit 70% of the amount generated for the project in a separate bank account. And the money can be withdrawn for that particular project only and that too based on stage-wise completion of it. When the money generated for a project is exclusively used for it – the chances of timely completion of the property improve.

• Same Rate of interest on default: for buyers as well as builders :- Most of us invest in property when the going is good. But time – whether good or bad – changes. There might come a time when you find it difficult to keep up with the EMIs and even default on them. So how does RERA protects you in a situation like this? Earlier you had to pay a higher rate of interest to the developer in case you defaulted whereas the builder would pay you interest on a lower rate in case he delayed the handover of the flat to you. RERA has put an end to this malpractice. Now both the party will have to pay the same rate of interest to the other in case they default on their commitment.

• Defect in Property’s Title? Get Refund! You have been living in the property for quite some time. And one fine day over a cup of coffee you find the Title Deed to be fishy and the coffee gets spilled all over. You begin to sink in the realization that nothing can be done now. Hold on! We have now been armed with RERA. And with RERA… …If and whenever, you find some defects or faults in the title deed of the property, you are free to claim and receive compensation for the same from the developer.

• Right to information empowering home-buyers :- RERA gives the Right to Information to homebuyers. Just do a google search with the property’s RERA number and you’ll have complete knowledge of the property you are purchasing. From the Plan Layout, Execution Plan, Construction Progress Report to Project Bank Details, Plot Details, List of People Involved, Final Completion Date, and so on; you have all the authentic and legally-binding details here.

Wealth Clinic exclusively deals in RERA-certified real estate giving the best value for your investment with peace of mind. Have queries or questions? Visit our website at wealth-clinic.com or just give us a call at 8929822005.