From 01 August 2017, Real Estate Regulation Act (RERA) will be in Act. By this act, builders won’t be able to book any unit in their Pre-launch Real Estate Project. They can’t even advertise any under-construction project without its registration under RERA. Hence by this Act, any property buyer won’t get cheated by any builder / promoter or agent.
Majorly, there will be 8 things that RERA will change in the Real Estate industry of India. Here they are –
1- Any Project over 500 Sq. Meter will be under RERA –
According to RERA, any Real Estate Project which will be developed in more than 500 Sq. Meter land area, will need to be registered under RERA. Apart from this, any residential project which will have more than 8 apartments, will also come under this act.
2- Genuine Information Before You Buy Any Property –
Every builder was asked to register its project under RERA latest buy 31 July 2017. According to Ministry, Builders need to show each section and layout of their project on RERA website as well in their offices and project sites. After this registration only, builders can start the sale of their project. Hence, as a buyer, you can get all the authentic information before buying the property.
3- Get Timely Possession Otherwise Builder Will Be Penalized -
As per this Act, Builders need to declare the date of completion and date of possession of the property while signing the agreement with property buyer. If the builder fails to give the possession as per his declaration, then builder will need to pay the penalty in the form of interest which will be 2% more than the rate of interest of State Bank of India (SBI). In case builder won’t pay this penalty then, on the complaint of the buyer, there is a provision of judicial custody of up to 3 years to the builder. If builder doesn’t give you the possession on time then he has to pay an interest amount at rate of 11% on your deposited amount.
4- Builder Will Be Liable For 5 Years –
Builder will be responsible for next 5 years after possession, in case of any malfunction/defect with the structure of the project.
5- Money Can’t Be Used In Other Projects –
Builders often use the amount (which they get from sale of one project) in their other projects. Due to this, none of the project gets completed on time. Now builders won’t be able to do this. Now Builders have to deposit 70% of the amount (which they get from sale of one project) in a separate account. This amount can’t be used for any other project until this project doesn’t get completed.
6- On-going Projects Are Not Included Under RERA In Some States -
Mostly in all the states, builders have to register their on-going projects as well in RERA. But in some states of India, these on-going projects are exempted from RERA. Due to this, tons of property buyers won’t get benefited from RERA. Many of the builders have put their work on hold and if those projects do not come under RERA, then many of the property buyers have less hopes of having their Dream Home on time.
7- Flat Area Won’t Be Misinterpreted -
Often buyers feel themselves a bit cheated by builder, when they come to know that flat area is lesser than their expectation. As earlier builders used to sale a flat in super built-up sizes, which includes area of the flat and common areas like staircase & lobby. Now as per RERA, a flat can be sold on its Carpet Area only, which means that you have to pay for the size of your flat only.
8- Every Issue Will Be Resolved on Time –
After RERA, Now a property buyer will have the right to complain against the builder to the Authority. The authority will give their decision in another 60 days.