The Impact of RERA on Real Estate

Last Updated at: April 11, 2020
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The Impact of RERA on Real Estate

For a long time, the real estate sector in our country was mainly in favour of the developers and the builders. And therefore, it remained unregulated. People have come across various cases of delayed possession, rising overhead costs, and project cancellations. Where they had to suffer a huge loss. At times, people have also been victims of situations where they were forced to vacate an apartment even after living there for a long tenure. This is only because the builder did not get approval from the government for that project. The homebuyers could file a complaint, but it took several years for the case to be settled.
To end these malpractices and to ensure fair dealings between the builders and the buyers, the Real Estate Regulatory Act (RERA) came into force in 2016.

This act was introduced by the government to put an end to the loopholes and the malpractices used by the developers, builders, and agents. And to create an unbiased transaction so that the consumers are not cheated by the builders anymore.

Ways in which RERA has impacted the real estate sector

The RERA has impacted the real estate industry in many ways. From revamping the real estate sector to making the builders answerable to the homebuyers, RERA has been a great step taken by the government to boost investments in this sector. The significant ways in which RERA has been helpful are:

  • All projects have to be registered with RERA

All residential and commercial real estate projects to register with the Real Estate Regulating Authority. Where the area of land involved is more than 500 sq. meters or eight apartments. Moreover, the builders also have to submit details such as layouts, sanctioned plan, the exact location of the project with a clear demarcation of land, number of garage space and area, carpet area, etc. Once the builder gets the clearance from the RERA, they can advertise and sell the property. 

  • Regular updates on construction progress

The homebuyers can now check online to have a clear idea of the project they want to invest in. According to RERA, the builders have to upload the project details every quarter, where they have to mention the number and types of flats sold, completion schedule and the documents associated with the proceedings in case of litigation. 

File Your RERA Complaint

  • Standardization of sale agreement

Previously, the sale agreements were done in a way where the homebuyers would have had to pay fines. But any fault on the side of the promoters did not attract any penalties. Now, as per the RERA norms, the sale agreement will include every minute details. Such as the date of possession of the flat, the internal development works and external development works, construction details along with specification, etc. so that the homeowners do not have to pay any penalties or charges later on.

  • Proper calculation of carpet area

The carpet area is calculated in three ways: the carpet area, built-up area, and super built area. Therefore, this leads to a misunderstanding between what the homebuyers would pay for and what they would get. Now, as per the RERA provisions, the builders must disclose the area of the apartment. But according to the carpet area (the area between four walls) and not the super built area. Likewise, the price quoted for the flat should also be as per the carpet area. 

  • Defect liability period of five years

As per the RERA norms, the builder or the developer has to rectify all sorts of structural defects. And any issues caused due to the poor quality of construction equipment used for five years. Therefore, the builder has to compensate for any issues related to sub-quality products and construction defects. If the builder does not rectify the defects or pays any compensation, the homebuyer can opt for RERA complaint registration

  • Failure to give complete possession on time

In case the builder is unable to give the possession on time, he is liable as per the RERA norms. It states to pay back the entire amount of the homebuyer in case he wants to leave the agreement. However, if the homebuyer wants to stay in the agreement, then, the builder has to pay interest for every month of the delay till one receives the possession. 

  • Approval from the homebuyer for any alterations to the sanctioned plan

In case the builder wants to make any alterations in the flat for which a person has already paid, then, he needs approval from the homebuyer. Moreover, if the builder wants to bring alterations in the project’s entire layout and common area, he needs to have approval from the 2/3rd number of total buyers. 

  • Grievance Redressal

RERA complaint can be lodged in case any buyer, developer or promoter has any complaint concerning the project. The associated state real estate regulatory department will take initiative to solve the case within a tenure of 60 days. If any of the parties is not satisfied with RERA’s decision, they may file a complaint with the Appellate Tribunal within the next 60 days. One can also appeal to the High Court and Supreme Court if he is not pleased with the decision passed by the Appellate Tribunal.

Apart from the ones mentioned here, RERA has also been a welcome step in the real estate sector as it has worked to bring accountability and transparency in this sector. With RERA, homebuyers who have filed a complaint against a builder can check the RERA complaint status online. Moreover, as the homebuyers now are aware that RERA acts as a regulator in this sector. They will not be victims of any loopholes laid by the promoters or the developers. Even if they fall into the prey of any malpractice, RERA will help serve justice to all the parties. However, it is still advised to the homebuyers to be alert. And has thorough knowledge when signing a contract with a builder.  
Here’s TamilNadu’s official RERA website. Likewise, every state has its own.

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The Impact of RERA on Real Estate

218

For a long time, the real estate sector in our country was mainly in favour of the developers and the builders. And therefore, it remained unregulated. People have come across various cases of delayed possession, rising overhead costs, and project cancellations. Where they had to suffer a huge loss. At times, people have also been victims of situations where they were forced to vacate an apartment even after living there for a long tenure. This is only because the builder did not get approval from the government for that project. The homebuyers could file a complaint, but it took several years for the case to be settled.
To end these malpractices and to ensure fair dealings between the builders and the buyers, the Real Estate Regulatory Act (RERA) came into force in 2016.

This act was introduced by the government to put an end to the loopholes and the malpractices used by the developers, builders, and agents. And to create an unbiased transaction so that the consumers are not cheated by the builders anymore.

Ways in which RERA has impacted the real estate sector

The RERA has impacted the real estate industry in many ways. From revamping the real estate sector to making the builders answerable to the homebuyers, RERA has been a great step taken by the government to boost investments in this sector. The significant ways in which RERA has been helpful are:

  • All projects have to be registered with RERA

All residential and commercial real estate projects to register with the Real Estate Regulating Authority. Where the area of land involved is more than 500 sq. meters or eight apartments. Moreover, the builders also have to submit details such as layouts, sanctioned plan, the exact location of the project with a clear demarcation of land, number of garage space and area, carpet area, etc. Once the builder gets the clearance from the RERA, they can advertise and sell the property. 

  • Regular updates on construction progress

The homebuyers can now check online to have a clear idea of the project they want to invest in. According to RERA, the builders have to upload the project details every quarter, where they have to mention the number and types of flats sold, completion schedule and the documents associated with the proceedings in case of litigation. 

File Your RERA Complaint

  • Standardization of sale agreement

Previously, the sale agreements were done in a way where the homebuyers would have had to pay fines. But any fault on the side of the promoters did not attract any penalties. Now, as per the RERA norms, the sale agreement will include every minute details. Such as the date of possession of the flat, the internal development works and external development works, construction details along with specification, etc. so that the homeowners do not have to pay any penalties or charges later on.

  • Proper calculation of carpet area

The carpet area is calculated in three ways: the carpet area, built-up area, and super built area. Therefore, this leads to a misunderstanding between what the homebuyers would pay for and what they would get. Now, as per the RERA provisions, the builders must disclose the area of the apartment. But according to the carpet area (the area between four walls) and not the super built area. Likewise, the price quoted for the flat should also be as per the carpet area. 

  • Defect liability period of five years

As per the RERA norms, the builder or the developer has to rectify all sorts of structural defects. And any issues caused due to the poor quality of construction equipment used for five years. Therefore, the builder has to compensate for any issues related to sub-quality products and construction defects. If the builder does not rectify the defects or pays any compensation, the homebuyer can opt for RERA complaint registration

  • Failure to give complete possession on time

In case the builder is unable to give the possession on time, he is liable as per the RERA norms. It states to pay back the entire amount of the homebuyer in case he wants to leave the agreement. However, if the homebuyer wants to stay in the agreement, then, the builder has to pay interest for every month of the delay till one receives the possession. 

  • Approval from the homebuyer for any alterations to the sanctioned plan

In case the builder wants to make any alterations in the flat for which a person has already paid, then, he needs approval from the homebuyer. Moreover, if the builder wants to bring alterations in the project’s entire layout and common area, he needs to have approval from the 2/3rd number of total buyers. 

  • Grievance Redressal

RERA complaint can be lodged in case any buyer, developer or promoter has any complaint concerning the project. The associated state real estate regulatory department will take initiative to solve the case within a tenure of 60 days. If any of the parties is not satisfied with RERA’s decision, they may file a complaint with the Appellate Tribunal within the next 60 days. One can also appeal to the High Court and Supreme Court if he is not pleased with the decision passed by the Appellate Tribunal.

Apart from the ones mentioned here, RERA has also been a welcome step in the real estate sector as it has worked to bring accountability and transparency in this sector. With RERA, homebuyers who have filed a complaint against a builder can check the RERA complaint status online. Moreover, as the homebuyers now are aware that RERA acts as a regulator in this sector. They will not be victims of any loopholes laid by the promoters or the developers. Even if they fall into the prey of any malpractice, RERA will help serve justice to all the parties. However, it is still advised to the homebuyers to be alert. And has thorough knowledge when signing a contract with a builder.  
Here’s TamilNadu’s official RERA website. Likewise, every state has its own.

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