Lately, we’ve been hearing a term RERA a lot whenever there’s any news of new real estate projects. Especially, if you are planning to buy a property in India. However, it is also true that most of the people, particularly those who are not in real estate sector, have a little to no knowledge about this act. And it is because of this lack of knowledge, they get tricked in frauds.

So if you’re planning to buy your next property soon and you’re not yet familiar with RERA, this blog is a must-read.

But before we move to what exactly is RERA and why is it important for you as a home buyer or a developer, first look at the picture of Indian Real Estate before RERA wasn’t introduced. 

The real estate sector in India is one of the largest and most dynamic sectors, contributing to the economic growth and development of the country. However, the sector has also been plagued by various challenges and issues, such as lack of transparency, delays in delivery, poor quality, frauds, etc. These have adversely affected the interests and confidence of home buyers and developers alike. 

To overcome these challenges and make Indian real estate market more transparent and organized, there was a need of a law in place that protects buyers’ investors’ interests and make it mandatory for builders/developers to deliver on-time and quality projects only.

And thus, in 2016 Indian Parliament introduced RERA that came into force in May 2017.

What is RERA?

RERA is an acronym for Real Estate (Regulation and Development) Act, 2016. The RERA act is a legislation implemented in India to effectively regulate the real estate industry. Its primary objectives include promoting transparency, prioritizing the interests of citizens, ensuring accountability, and fostering financial discipline. Moreover, the act serves as a safeguard for homebuyers who have experienced deceitful practices by builders and deceptive claims in the real estate sector. Different states have their own RERA authorities and websites, such as Maharashtra and Karnataka.

In this blog post, we will explain the key features and provisions of the RERA Act and how it benefits you as a home buyer or a developer. Indian Real Estate Before & After RERA Challeneges that Indian Real Estate Buyers were Facing

• Transparency: Before RERA, there was a lack of transparency in the real estate sector, as buyers had limited access to information about the project, such as layout plan, approvals, completion status, carpet area, etc. Builders could also charge for extra area or make false promises.

• Timely delivery: Before RERA, there were frequent delays in the delivery of projects, as builders could divert or misuse the funds collected from buyers for other purposes. Buyers had no recourse for compensation or interest in case of delay.

• Quality: Before RERA, there was no guarantee of quality or defect liability for the construction of the property. Buyers had to bear the cost of any structural defect or quality issue in the property after possession.

• Grievance redressal: Before RERA, there was no mechanism for resolving disputes between buyers and builders. Buyers had to approach civil courts or consumer forums for redressal, which was time-consuming and costly.

How RERA Solved These Challenges?

Some of the benefits of buying a RERA registered property are

• Agent Registration: RERA has also brought real estate agents under its purview. Agents are now required to register themselves with the respective state RERA authority, promoting transparency and professionalism in the industry. This measure safeguards buyers from dealing with unscrupulous agents and encourages fair practices.

• Right to information about the property: You can access detailed information about the project, such as layout plan, approvals, completion status, carpet area, etc. This can help you make informed decisions and avoid any fraud or misrepresentations by the builder.

• Standardized carpet area: The RERA act has provided a clear definition for the carpet area, which refers to the functional floor space within an apartment, excluding the portion occupied by the external walls, areas under services shafts, exclusive balcony or verandah areas, and exclusive open terrace areas. This means that you will pay only for the actual usable area and not for any super built-up area that includes common spaces and amenities.

• Builders will be held responsible for any defect/fault in the construction: If you find any structural defect or quality issue in your property within five years of possession, you can contact the builder and get it repaired free of cost. The builder is liable to rectify the defect within 30 days of receiving the complaint.

• Escrow Account Requirement: RERA mandates developers to deposit 70% of the funds received from homebuyers into a separate escrow account. This provision prevents developers from diverting funds to other projects and ensures that the allocated funds are utilized for the designated project's construction and development. It enhances financial discipline and safeguards buyers' investments. If there is any delay in handing over the possession, the builder has to pay interest to the buyer at the same rate as the buyer pays to the bank for home loan.

• Providing fast-track grievance redressal: The RERA Act has established a fast-track mechanism for resolving disputes between buyers and builders. You can file a complaint with the RERA authority of your state or union territory and get a speedy redressal. The authority has to dispose of the complaint within 60 days of filing.

• Builders won’t be able to delay the projects: The RERA Act mandates that builders have to deposit 70% of the funds collected from buyers in a separate bank account and use it only for the construction of that project. This ensures that the funds are not diverted or misused for other purposes and that the project is completed on time. If there is any delay in handing over the possession, the builder has to pay interest to the buyer at the same rate as the buyer pays to the bank for a home loan.

• Adherence to sanctioned plans and project specifications by the promoter: The promoter cannot make any changes or additions in the sanctioned plans, layout plans and specifications of the property without the previous written consent of at least two-thirds of the buyers, other than the promoter, who have agreed to take apartments in such building.

• Obligations of promoter regarding insurance of real estate project: The promoter has to obtain insurance for title of land and building and construction insurance. He also has to transfer these policies along with all benefits to buyers at time of conveyance.

How to check the RERA status of a project online

To check the RERA status of a project online, you can follow these steps:

• Go to Google and search for RERA followed by the name of your state or union territory. For example, if you are looking for projects in Maharashtra, you can search for MahaRERA.

• Log in to the official RERA website of your state or union territory. You will see a tab for Registration on the homepage. Click on it and select Registered Projects.

• Enter the name of the project or the builder that you are interested in and click on Search. You can also use the map view to locate the project on Google Maps and click on the embedded link to view the details.

• Click on the project name to get more information such as promoter details, project details, uploaded documents, etc. You can also view the RERA certificate, application, and extension certificate if applicable.

• By following these steps, you can check the RERA status of any project online and verify its authenticity and credibility.

RERA vs. other real estate laws in India

RERA is not the only law that regulates the real estate industry in India. Other laws, such as the Transfer of Property Act, the Indian Contract Act, and the Consumer Protection Act, also play a role in regulating the industry.

However, RERA is the most comprehensive law that regulates the industry, as it covers all aspects of real estate development, marketing, and sale. Moreover, RERA has introduced a robust grievance redressal mechanism, which ensures timely resolution of disputes and grievances.

Future of real estate industry with RERA

RERA has made the real estate industry in India a safe and transparent sector for buyers and investors alike. It has brought in a new era of transparency and accountability in the Indian real estate industry, which is expected to attract more buyers and investors in the coming years.

With its robust grievance redressal mechanism and mandatory disclosure requirements, RERA has empowered buyers and made them more confident about investing in the real estate sector.

Moreover, the introduction of penalties for non-compliance has made builders and developers more accountable for their actions, which has led to increased efficiency and a focus on timely project completion.

With more & more builders and developers registering their projects with RERA, the future of Indian Real Estate looks bright. If you want to invest in RERA-registered projects, visit https://www.zoltanproperties.com/properties/all and find your ideal match. From Luxury Villas in Goa for Sale to Commercial properties in Mumbai to Luxury Apartments in Bangalore, we’ve got every type of property for sale in India.

Project RERA Number starts with P

Agent RERA number starts with A