From May 1, 2017, the Real Estate (Regulation and Development) Act has come into force in its entirety. For the understanding of one who is not a part of the Real-estate sector, a summary of the major implications of the RERA are explained below.
Any project measuring upto 500 sq. m., and more than 8 units (flats/ apartments/ individual properties) which are under construction, will have to be registered under RERA.
This means that most, if not almost all, of ongoing projects will be officially looked under RERA.
Every project detail will have to be registered. This includes project layout, plan, government approval, land title status, sub-contractors to the project, and schedule of completion with RERA. This has to be presented to the consumer. Each phase of a project will be considered as a stand-alone project and will require respective permission.
In this way, RERA will be updated with all the real estate activity which will help in increasing transparency and organising the sector.
Under section 9 of the act, all agents and brokers will have to register with RERA within three months of implementation of the act.
As a result, homebuyers will deal with only agents and brokers who are qualified, verified & authorized.
Selling of any project will be on the basis of its original carpet area, and not the super built-up area.
Buyers will get a clear understanding and will be able to make an informed decision while purchasing a property.
Once a particular project is registered and sold, no further changes can be made in it without the consent of the Buyer.
This will put an end to the fluctuating cost once the sale is complete. Also, this will make sure that the projects are delivered on time.
The developers will be liable to pay interest on the amount paid by the buyer if the project takes a longer to get complete than promised.
This law will ensure that projects are completed and delivered without any delay.
Separate accounts will have to be maintained for separate projects of the same developer. 70% of the customer’s money will be used for the construction of the respective projects.
This will help Regulate transactions. The customer’s money will be justifiably and properly used for the development of their own homes. This will also assist in the timely delivery of the projects.
The customer’s can contact the developer in writing within 5 years of taking possession in case of any damage.
This will ensure the security of the customer even after the project is handed over to them.
Under this Act, Real Estate Appellate Tribunals are formed. These Tribunals will decide on the disputes between the buyers and the developers within the time frame of 60 days.
This will speed up the resolution process.
The punishment for the developer who fails to follow the law is maximum 3 years of jail with / without fine.
Hence, the law will have to be rigidly followed by everyone in the industry, making it Customer-friendly.