The Real Estate (Regulation and Development) Act was passed by the Parliament of India in 2016. This Act seeks to guard home-buyers. And also help boost investments within the land industry. The Act establishes a regulatory agency (RERA) in each state to regulate the important estate sector. It acts as an adjudicating body for quick dispute resolution.
The RERA was a much-awaited Act that was required to revive the country’s real estate sector. The sector has seen a stable rise over the years. It is one of the leading revenue generators in our country and was in a dire need of transparent government authority to keep a check on developers. Earlier there were no standard rules, and builders had their norms.
Every builder had their practices and structured the builder-buyer agreement in such a manner that was mostly in favour of the builder. The commoner who invests his lifelong savings for the land had very limited rights. To safeguard the interests of the house buyers and to make sure that they're not exploited by the developers/builders – the govt introduced the RERA Act.
Functions of the RERA Authority
Section 34 of the RERA Act, 2016 defines the functions of a RERA Authority. These are as follows:
- Firstly, an authority must obtain RERA registration for a project and real estate agents with it. Consequently, it also regulates the registered projects with it.
- For public viewing, the Authority has to publish and maintain a website of records of all real estate projects with relevant details which required to be furnished.
- For public viewing, an authority must maintain a database on its website with names and photographs of the promoters as defaulters, including all details of a projector any imposed penalty.
- For public viewing, the authority has to maintain a database on its website with the names and photographs of the real estate agents who have applied and registered under the Act.
- The fixation of a standard fee that is to be paid by a promoter, agent, or allottee through regulations according to the jurisdiction.
- It ensures that an obligation of the promoters, agents, or allottees is duly complied with according to the RERA Act.
- The Authority will also look that the orders, directions, or regulations issued by it are duly complied too by relevant parties.
- It must ensure that all other functions given to it by an appropriate Government to carry out necessary provisions of this Act are duly performed.
Major benefits of the RERA Act
Right to Information About The Property This is one big advantage of the RERA Act in favour of the home buyer. This information can help us on many fronts. The developer has to share all the details regarding the project such, as plan layout, plan of execution, completion stages, the status of the competition, etc.
A) Standardized Carpet Area
Each builder had its formula to calculate the area of a property. But RERA has made a standardized version of how to calculate the carpet area. RERA defines carpet area as ‘the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment’.
With the help of this definition, the builders have to be transparent on how much carpet area they are offering as the price of a property in real estate in India is mainly dependent on the carpet area.
B) Builders Will Be Held Responsible for any Defect/Fault in the Construction.
For the structural defect if any in the property for up to 5 years from the date of possession. The repairing has to be done within 30 days once the fault is detected by the buyers.
C) Establishment of Authority for Grievances Redressal
Any grievances against the builder can be taken to the state authority which is set under RERA. It shall have the power to redress all the grievances. In case if the buyer or buyers are not satisfied with the order, you can file an appeal with Appellate Tribunal who will redress your case within 60 days.
There are various other benefits of the Act regarding rate of default interest rate, reducing the risk of Builder Insolvency / Bankruptcy, advance payment, rights of the buyer in case of delay in possession and defect of title.
Applicability of RERA
RERA applies to all builders and developers except the following: -
- Where the area of land which is to be developed does not exceed 500 sq meters or the no. of apartments proposed to be developed does not exceed 8.
- Where the Promoter has received a completion certificate before the introduction of RERA.
- For the purpose of Renovation or Re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building.
- RERA applies only to the development of property and not on renting of property.
- All residential and commercial projects, including shops, offices and buildings are covered under RERA.
RERA will provide a standard ground for both buyers and developers. It will reduce the risks which were faced by the people before. RERA is of extreme significance as it will apply to more than 76,000 companies across the country. This Act mandates multiple things like registration of projects and real estate agents.
The buyer will have all the right to know information about a real estate project and will also have the right to get all the necessary documents related to the project. The said Act also established a state authority to govern and look after residential and commercial real estate transactions. RERA will also ensure timely delivery of the project which is a huge relief to homebuyers across the country. RERA will guarantee more transparency between the developers and buyers thereby ensuring much needed standard practice in the real estate business.