RERA and Its Role in Protecting Home Buyers

Published on: 28 Dec 2023

As a home buyer, there are several aspects during the home-purchasing process that can make you wonder if your next home will be a safe purchase. Due to the many legal, financial & various other obligations in this sector, non-standardised norms can make your dream house purchase a tiring task. After a property is shortlisted, most of the questions on the home-buyer's mind include: Will a real estate purchase be a smart investment? Will the builder fulfil his promise? Will the process to register my property be smooth & hassle-free?
To ensure the safety and address the above concerns for buyers, builders, real estate agents, and other players in this industry, the government of India passed the Real Estate Regulatory Authority (RERA) Act in 2016. By setting a clear purpose and establishing regulations for the home-buyer as well as the seller, RERA has since benefited many in the real estate industry. But how has this act changed the real estate industry? Let’s begin by exploring the various aspects of RERA.

RERA as an Authority Body

The RERA Act was passed in 2016 to bring reliability & transparency in the real estate industry. The bill of the Parliament of India Act passed on 10 March 2016 by the Upper House (Rajya Sabha) ensured the RERA Act was fully effective from 1st May 2016. Of 92 sections, 52 were notified as immediately effective, with the remaining provisions coming into effect from 1 May 2017.

What is its purpose?

The RERA Act provides several rights to the home buyers and also specifies certain rules to be followed by builders & developers. These regulations will increase the transparency in real estate transactions, reduce the occurrence of fraud, and reduce project delays and mis-selling of residential and commercial properties.

Here are a few salient features of the RERA Act:

• Establishing a Real Estate Regulatory Authority Tribunal in every state to resolve disputes between real estate projects and their buyers.
• In case the buyer or promoter is in default, both will be liable to pay an equal rate of interest.
• If the promoter causes any losses to the buyer due to legal issues, the promoter will compensate the buyer.
• Builders/developers/ promoters are liable to pay a penalty of up to 5% of the total project cost if they fail to follow RERA guidelines.
• No civil court has any jurisdiction in cases of disputes that come under RERA.

Advantages for the Home Buyer:

To safeguard the interest of the buyer and standardise the home buying process, RERA provides the following benefits:

• During the construction of a property, builders cannot demand more than 10% of the property’s cost as an advance payment before the sale agreement is signed. This reduces the pressure on the buyer to generate heavy funds.
• Builders must submit all original documents for projects they undertake and must make any modifications without the prior consent of the buyer.
• All developers must sell properties based on their carpet area and not super built-up area as per the standard formula used by RERA. This prevents inflated carpet areas from increasing prices by the promoter.
• Within 5 years of possession, if the buyer faces any structural or quality-related issues, the builder must rectify these within 30 days at no cost to the buyer.
• A builder cannot advertise, sell, or book a plot without prior registration with RERA. Post registration, all properties intended for advertisement or sale must have a registration number provided by RERA.
• If a false promise is made to the buyer, the buyer is entitled to a full refund of the amount that was paid as advance.
• Right to information enables the buyer to have the right to know all information regarding layout, execution & construction status.
• In case of a defect in the title during the time of possession, the buyer can claim compensation from the promoter.
• For any complaints regarding a real estate project, the buyer, promoter, or agent can file a complaint with RERA for appropriate grievance redressal.

Along with the above, the RERA Act benefits home buyers in several ways. When it comes to a real estate investment or purchase, always ensure that the project you are looking for is RERA registered. You can check this by visiting the RERA website- https://maharerait.mahaonline.gov.in/searchlist/search
With RERA to the rescue of home-buyers, this is the best time to buy a property through the advice of an expert, reliable, and guide like EstateMint. Contact us today and learn more about how you can secure your own home in no time. We’ll ensure to make this purchase your most pleasant investment!