Here is Everything You Need to Know about RERA

Here is Everything You Need to Know about RERA

Since inception, the RERA Act has mooted for the homebuyers across India. However, many prospects are still puzzled about how will they be benefitted from the RERA Act? If you are also one amongst them, then have a look at this RERA Act summary and know the concept and benefits of the RERA Act now:

What is RERA Act?

The Real Estate Regulation and Development Act 2016 is also known as the RERA Act. The Upper House i.e. Rajya Sabha passed the bill to protect the interest of homebuyers and developers too. This bill was passed in parliament in March 2016 and came into existence from 1st May 2016. The RERA Act 2016 has a total of 92 sections and these sections were implemented in the system from 1st May 2017.

Key Features of RERA ACT 2016

  • According to the RERA Act 2016, the developer is required to keep 70% of the buyers/investors money separately and it is known as the Escrow account. The developer can only use this amount for construction and land payment issues.
  • Under the RERA Act 2016, the developer cannot ask for more than a 10% booking amount from the buyers before signing a sale agreement.
  • According to the RERA Act guideline, the developer has to submit all the documents related to property/land. The homebuyers got an upper edge by the formulation of the RERA Act as the developer is required to take the consent of the buyer before making changes in the layout.
  • The RERA Act 2016 allows the developer(s) to sell residential projects based on the carpet area. Earlier to 2016, the developers used to sell housing projects based on a super built-up area. The homebuyers are at an advantage as they can ask for a complete return of invested money in case of a stalled project.
  • According to the RERA Act 2016, the developer has to resolve the problem in the building for the first five years. The homebuyer can make a complaint about the same and the developer has to get it fixed within a month.
  • The developer cannot promote any project/plot/land/apartment without receiving any the RERA Registration number. For example, a project registered in Uttar Pradesh will have a RERA number like UPRERAPRJXXXXX.
  • The developers are required to upload all the project-related information on the RERA portal. This includes types of units, apartment or plot, sanctioned approval, awaited approvals etc.

How to find a RERA-compliant Property

  • The Real Estate Regulation and Development Act 2016 has set guidelines and here are the steps to figure out a RERA-compliant property.
  • The developer has to get the residential property registered under the RERA Act 2016 in case the property covers more than 500 sq. meters. The developer has to get the RERA registration number before unveiling the project.
  • The developer has to submit the proof of depositing 70% buyers’ money into the escrow account. This money can only be used for the construction of the same project.

Penalties under RERA Act 2016

  • The RERA Act has the provision of penalties for all including the developers, buyers and agents. The homebuyer has to pay a daily penalty of 5% of the estimated cost of the project for non-compliance with the RERA rules.
  • The homebuyer can face imprisonment of 1 one year or 10% of the estimated value of the project or both for non-compliance of the Appellate Tribunal.

The RERA Act 2016 has various advantages and is fair on the part of both the buyers and the developers. The advisors and the consultants in the Indian real estate sector have to work according to the laws defined under the RERA Act.

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