One of the significant financial decisions made by many individuals is buying a home. It is important to know that many homeowners have faced challenges like the project delay and lack of transparency in the real estate sectors. Hence, to address these issues and protect the interest of the homebuyers, the Government of India has introduced the Real Estate (Regulation and Development) Act, 2016 (RERA).
RERA is implemented to regulate the process in the real estate industry ensuring accountability among the developers and builders. Also, this law brings the much-needed transformations in the sectors benefiting the home owners in the real estate industry. Hence, this blog from Sivanta Foundation, the best builders in Anna Nagar, explores what RERA is and why it is important for the homebuyers.
What is RERA?
The Real Estate (Regulation and Development) Act 2016 or RERA is one of the major landmarks in the legislation which is aimed to regulate the real estate sector in India. So, the primary objective of RERA is to promote transparency, accountability and efficiency in the real estate market. Hence, this mandates all the real estate projects to be registered under the respective states RERA authority before they can be sold or marketed.
Key Features Of RERA
Mandatory Project Registration:
One of the major key features of the RERA is the mandatory project registration. The developers need to register their projects with the state’s RERA authority before launching them into the market. Also, the registration includes the details like the project layouts, approvals, financial statements, and timelines.
Transparency In Information:
Secondly, the RERA for the property should hold transparency in the information. The developers must disclose the complete information of the project including the layout plans, carpet area, approvals, and timelines. This information should be accessible to the homebuyers through the RERA website.
Financial Security:
Thirdly, the main feature of the RERA is financial security. The builders are required to deposit around 70% of the total project cost in the escrow account. This approach ensures the funds are collected from the buyers and are used only for the construction and project development.
Timely Project Completion:
In addition, the RERA also contains the timeline of the project completion. It is important that developers should include the information on the completion of the projects within the promised timeline. Hence, the failure on the same can result in penalties and compensation to the buyers.
Standardized Sale Agreements:
The RERA act also acts as an mandatory step or a standard format for the agreement between the builders and buyers. Hence, this prevents as an unfair clause whether the developers have favored someone.
Grievance Redressal Mechanism:
The RERA establishes a Real Estate Regulatory Authority in every state. Hence, with this agreement the buyers can even file complaints against the developers for misinterpretation, delays, or fraudulence. The Appellate Tribunal resolves disputes within 60 days.
Prevention of False Promotions:
With RERA, builders cannot make misleading advertisements or prevent false promotions. Moreover, all these project promotions must match the actual development status.
Why Is RERA Important For Homebuyers?
Enhanced Transparency
Before the introduction of RERA, homebuyers had limited access to the project details which often led to misinformation or fraud. Also, with the mandatory disclosures and online project tracking it allows the homebuyers to make informed decisions.
Protection From Delays
Secondly, the project delays were a significant concern in the past making the homebuyers stuck with the EMI payments without receiving any possession. However, with RERA homeowners can be assured by the timely completion and offer compensation for delays.
Financial Security
Thirdly, RERA offers excellent financial security with the provision of escrow account preventing developers from delivering funds to other projects. This approach ensures the homebuyer’s money is utilized appropriately.
Fast Dispute Resolution
Moreover, RERA resolves legal disputes which often take years. So, with RERA homebuyers can even file the complaints with the authority and the legal disputes are settled within a short time.
RERA has significantly changed the real estate landscape in India, offering home buyers protection, transparency, and legal backing. With clear regulations and stringent penalties for violations, Sivanta Foundation of the best flats for sale in Puzhal ensure that we fulfill our responsibility and homebuyers receive their rightful properties.
If you’re planning to invest in real estate, always check whether the project is RERA-registered. This simple step can save you from potential fraud and ensure a smooth homebuying experience.
