Key Points from Real Estate Regulation Act (RERA)
Real Estate Regulation Act (RERA) Rules came into effect from 1 st May, 2017. This is good news for home buyers who have been cheated by real estate developers and agents. RERA Rules would help to protect Home Buyers and provide Transparency between buyers, real estate developers and agents. What does these New Rules from RERA talk about? How does such Real Estate Regular Act Rules help to boost real estate sector? Which are those points buyers should know from these new Real Estate Regular Act Rules 2017?
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What is Real Estate Regulation Act (RERA)?
Real Estate Regulation Act was formulated by Govt. of India in the aim to keep transparency between buyers and real estate developers and agents. Many developers have been cheating in several ways to buyer and none of the current real estate rules are helping the buyers. These new rules would come into effect from 1 st May, 2017. These new rules would help buyers in several ways. However, buyer needs to understand about these rules and the precautions he need to make while buying the projects.
12 Key Points from Real Estate Regulation Act (RERA)
1) These new rules are formulated by Govt. of India as model law, however given flexibility to States to modify / add their own rules. Since the land belongs to State, this flexibility is given to the States.
2) Currently 6 states have formulated the law including Gujarat, Odisha, Andhra Pradesh, Madhya Pradesh, Uttar Pradesh and Bihar. Means these states are ready to go with the new rules. Other state would be joining this law very soon.
3) RERA protects buyers in the real estate projects. They are the king now.
4) As per Real Estate Regulation Act, real estate developers and agents need to register with State Real Estate Regulatory Authority by 30 th July. They would then come under the purview of RERA act. When you buy a property consider checking this aspect so that you are protected from now on.
5) As per RERA, Real Estate Developer need to deposit 70% of the funds collected from buyers in separate bank account created for the projects. They need to use these funds only for the construction of the projects to see timely completion of the projects. Any deviation in this would attract penalty including imprisonment.
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6) New Projects should obtain all approvals before the launch of the project. Currently buyers are cheated saying all approvals are in “closure” stage, then later on saying there is delay in getting approvals and delaying in the project. Any false statement regarding this would attract penalty including imprisonment.
7) In case, real estate developer wants to make any structural changes after the start of the project, it needs to take 2/3 rd of the buyers consent. Without such consent, no structural changes can be made.
8) Real Estate Developer would be penalized including imprisonment upto 3 years in case of any delay in the projects or incase he makes any change to what has been promised in the project.
9) Real Estate Developer should provide all project details on Real Estate Regulator website and provide regular updates on construction progress.
10) Should rectify the defects bought buy buyer to the notice by the promoter within 5 years from the date of the possession.
11) In case of delay in the possession from developer side, they need to pay 2% interest above SBI Lending rate to the buyer.
12) As per RERA guidelines, developer should sell the projects only based on carpet area where buyer can use. In case of defaulter they would be imprisoned for 3 years.
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Experts believe that these Real Estate Regulation (RERA) Rules would bring more transparency between buyers, developers and real estate agents. Since real estate sector contributes 9% to gross domestic product to India’s growth, this would definitely boost investments in Real Estate Sector.
Readers, do you believe that these real estate regulation rules would help home buyers? What are your views on this?
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Key Points from Real Estate Regulation Act (RERA)
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If the promoter( landlord or investor) or builder does not Agree to the RERA clauses to be put in agreement for sale even though the project is RERA approved, what can be done in such situation? Are we as buyers still eligible with all RERA rights even though the clauses are not part of Agreement of sale or sale deed?
I have a few questions and experience to share.
1). If the promoter( landlord or investor) or builder does not Agree to the RERA clauses to be put in agreement for sale even though the project is RERA approved, what can be done in such situation? Are we as buyers still eligible with all RERA rights even though the clauses are not part of Agreement of sale or sale deed?
2). When we approach to some promoter or builder, they insist on cash payments and term it as legal by registering the property at a lower cost than the actual sale consideration. Even though the subregistrar is aware of this, they still don’t question the buyer and seller. What action can be taken according to RERA ? If we disagree for such transaction, they deny the property to us. What provision we have to deal with such cases? Strange part is it’s such a deep rooted problem in our society, people say property dealings are not possible without black money.
3). Where do we get to see registered real estate agents? We still see many brokers and agents are still marketing without being registered under RERA. What can be done if the agent is not revealing their RERA Registration number? Where in RERA, can we raise our voice if they are misbehaving or threatening us?
4). What precaution should we as buyers take while giving token money? Some times it’s so fast that we can’t go for a bond paper deal for token money. Bond paper is scarce now in our city as well. Promoter and builder take advantage of that and deny the property later on after the token money is paid and many times we have to run after them to get that back. In my case the dealers threatened me of not giving my money back. They did not turn up for agreement and blamed me for delay in further payments and missed date of agreement of sale.
5). What RERA can do if we see a Nexus of bankers, promoters and builders or any other powerful set of people who dominate and bully over the rights of a common buyer. Can we give an anonymous complaint? Anonymous because it’s not only a risk to a single person but the entire family.
6). People in the real estate field get away with black money transactions day in day out and forcing common genuine buyers to do the same. What can RERA do to control this menace and can this be investigated from your side upon complaint? I as a common buyer might not be able to give you credible evidence as we don’t intend to gather evidence like this during our purchase but we come across these demands of cash transaction.
7). What are the clauses for TDS? Is it applicable for property with a work order ? For example, if the total sale consideration is 80 lakhs, work order is generated for 40 lakhs and the sale deed is executed at 40 lakhs.
8). Some promoters and builder mention the date of completion to the maximum limit in the RERA links but they don’t need that much time line to complete the project. Is there any way RERA can audit such information as per their other documents that they share with Muncipal corporation, Development Authority, Banks etc.
9). What can we as buyers if we don’t get enough transparency in getting all the information from the promoters or builders.
10). Many a times even with construction linked payments, the builder constructs to an extent(example until slab work) where they can gain the maximum lump sum and the buyer keeps on paying interest until possession and it’s clear that the other part of construction goes very slowly where the money disbursement is low in that phase of construction.