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Key Points from Real Estate Regulation Act (RERA)

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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)?

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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)

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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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Suresh

Key Points from Real Estate Regulation Act (RERA)