RERA stands for Real estate Regulatory Act. If you are an aspirant who wants to understand RERA, let us help you provide the help regarding the same.
RERA Stands for Real Estate Regulatory Authority. The bill of the Parliament of India Act was passed on 10 March 2016 by the Rajya sabha. This act became effective on 1st May 2016. Only 59 sections were notified, and the rest out of 92 were effective from 1st May 2017.
The central aim of RERA is to create a more equitable and fair transaction between the seller and the buyer of properties, especially in the primary market. Also, the main purpose of implementing this act was to protect the home purchasers as well as in order to boom the real estate investments.
What is RERA-Approved Meaning?
RERA approved simply means RERA registered. Approvals, land titles, insurance, etc., are the guidelines that every builder has to follow to register their project.
The major features focused by RERA include:
- Security
- Transparency
- Fairness
- Quality
- Authorization
These key features were the building stones of RERA.
What Does RERA Stand For (RERA FullForm)?
RERA stands for Real Estate (Regulation and Development) Act. The full form of RERA highlights its commitment to regulating the real estate sector effectively.
RERA Approval & Its Advantages
RERA approval refers to the registration of real estate projects and agents under the Real Estate (Regulation and Development) Act.
The term “RERA approved” assures homebuyers that the project is registered with the regulatory authority and adheres to the standards of transparency, accountability, and fair practices outlined in the Act.
In essence, RERA approval is a testament to the project’s compliance with the statutory requirements, providing buyers with confidence and legal protection in their real estate transactions.
| When a project is termed “RERA approved,” it signifies that the development complies with the guidelines and regulations laid out by RERA. |
Here are 10 Key Advantages of the New RERA Act:
- Standardized Carpet Area:
– Definition of carpet area is clearly specified, introducing standardization in its calculation.
– Prevents builders from manipulating carpet area to inflate property prices.
- Rate of Interest on Default:
– Same rate of interest applicable in case of default, ensuring parity between builder and buyer.
– Addresses the imbalance in interest rates for delays in possession or payment defaults.
- Risk Reduction of Builder Insolvency/Bankruptcy:
– Requires builders to deposit 70% of project funds in a separate bank account.
– Limits the diversion of funds to other projects, ensuring proper utilization for the intended purpose.
- Buyer’s Right in Case of False Promises:
– Provides the option for buyers to withdraw if there is a mismatch between commitment and actual project.
– Entitles the buyer to a full refund with interest and compensation.
- Advance Payment Limit:
– Limits the builder from taking more than 10% of the property cost as advance or application fees before the sale agreement.
- Right of the Buyer in Case of Defect After Possession:
– Requires builders to rectify any structural or workmanship defects within 5 years after possession.
– Allows buyers to claim compensation if defects are not rectified within 30 days.
- Rights of the Buyer in Delayed Possession:
– Gives buyers the option to withdraw or continue with the project with compensation and interest in case of delayed possession.
- Rights of the Buyer in Case of Defect in Title:
– Allows buyers to claim compensation for defects in the title of the property even after possession.
– No limitation period for discovering title defects.
- Right to Information:
– Entitles buyers to access all information related to the project, including plans, layout, and completion status.
- Establishment of Authority for Grievance Redressal:
– Sets up a state authority under RERA to address grievances against builders.
– Provides a clear mechanism for redressal and an appellate tribunal for appeals.
Buyers are empowered with increased transparency, fair practices, and avenues for redressal, making RERA a significant reform in the real estate sector.
| The advantages of RERA approval include enhanced transparency, accountability and protection for homebuyers. |
Benefits of RERA
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Standardisation of carpet area
RERA provides ease as a standard formula to calculate the carpet area. So, this helps to avoid the situation wherein promoters provide inflated carpet areas to charge high prices.
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Reducing the builder’s risk of insolvency
With the execution of RERA, promoters can use the amount generated from one project to invest in the other one. As 70% of the funds raised need to be deposited in separate bank accounts, the withdrawal of these funds is possible only on the certification of a professional person.
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Advance payment
Under the norms of the RERA act, a builder is not supposed to charge more than 10% of the cost of the project in the form of an advance application fee. This helps to remove the burden of buyers to pay the entire amount at once.
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Rights to the buyer in case of any defects
Under the RERA Act, the buyer also has certain rights. In case of any structural defect within the possession of 5 years, the builder needs to rectify these errors within 30 days free of charge.
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Right to claim the compensation
During the time of possession, if the buyer spots any defect in the title of the property, he/she can claim compensation from the promoter. This amount does not have any limit.
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Right to information
The buyer has the right to have complete information about the property or the project the promoter is working on.
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Right to redressal
If any of the three parties, the agent, promoter, or buyer, has any dissatisfaction related to the property, they can File a Complaint With RERA.
In case, if they aren’t satisfied with the decision of RERA, they can file a complaint further with the Appellate tribunal.
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Interest to be paid in case of any default
If there is any delay by the promoter of the property, under RERA, both parties have to pay the same amount of interest. Prior to RERA, the interest that was paid to the buyer was less than that paid to the promoter.
How to Ensure that a property is registered under RERA?
Always make sure you buy a home that is RERA Registered. If the area of the property is more than 500 square metres, it should be registered under the RERA Act before being launched or advertised. In such a case, the builders should provide evidence that 70% of the total payment has been deposited into a discrete escrow account, as it shouldn’t be used for any other investment purpose.
Builders should have the consent required before proceeding with any kind of advertisement. Discounts related to early and pre-booking offers won’t be present. Let us understand in detail the RERA Project:
- Visit the official website of RERA (State-wise) in order to check the details
- Click on registered projects and enter the project name
- You can then have a look at the project details, the application as well as the certificate.
How to find RERA-approved projects?
In order to check the details of the approvals, visit the RERA Website. On the project page, click the ‘view details’ option. When you scroll down to the uploaded documents section, you can find all the required documents there.
Always make sure to check the RERA registration of the project and the approvals as well.
Final thoughts
If you are looking to buy a home, understand how beneficial the RERA act is for you. You can attain certain advantages due to the RERA Act being a buyer of the property. There is certain information mentioned about how it becomes easier for you to verify whether the property is RERA Approved or not. Along with it, you can figure out whether the property is RERA compliant and how to verify it through the steps provided above.
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FAQs
How to check the RERA registration number?
The RERA registration number can be checked from the respective states’ portals. The state-wise portal has a list of registered projects along with RERA registration numbers, approvals, and other documents.
Which projects come under RERA
RERA is applicable to all real estate projects. Once all States and Union Territories comply with RERA, all real estate projects come under RERA.
What happens if the builder does not follow the RERA order?
A homebuyer has the right to file an application for the execution of the order against the developer with the same RERA Authority.
Is RERA-approved property safe?
When you invest in a project registered with RERA, your rights are protected as a buyer.
What is the carpet area in a flat?
The carpet area includes the bedroom area, living room, balconies, and toilets.
Is RERA applicable all over India?
RERA registration is mandatory for every builder who wishes to build residential or commercial property, which is mandatory all over India.
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