All You Need To Know: The Real Estate Regulatory Authority (RERA)
Until very recently, a property investor or home buyer had to rely on advertisements and brochures before they made the crucial decision of investing in property. Unlike mutual funds and shares, which are heavily regulated, the realm of Real Estate has been largely unregulated for its investors. Fortunately, RERA now enters as a game changer in the Real Estate Sector. The Real Estate (Regulation and Development) Act was passed by the Centre in May 2016. This Act ensures that property transactions will be subject to certain regulations. Here’s what you need to know:
1. It establishes the State Real Estate Regulatory Authority for that particular state as the government body to be approached for redressal of grievances against any developer.
2. Both residential and commercial real estate transactions come within the purview of this Bill.
3. The safety of the investors’ money is ensured because 70% of the funds allocated to a project are to be kept in an assigned bank account. The builder will not be allowed to use this fund for other projects, thus protecting the investors’ money if the project faces any issues.
4. All information is made available to the consumers; this includes project plan, layout, government approvals, land title status, sub-contractors to the project and schedule for completion, because this information is registered with RERA.
5. Carpet Area will be the only measure acceptable according to RERA, this will put an end to ambiguous concepts like Built-Up and Super Built-Up area.
6. RERA ensures that any delay in project completion will make the developer liable to pay the consumer the same interest as the EMI being paid by the consumer to the bank.
7. The developer is subject to a maximum jail term of 3 years with or without fine if he does not adhere to the appellate tribunal of RERA
8. The developer cannot make any changes to the plan that has been sold without the written consent of the buyer.
Also, any project measuring more than 500 square metres or more than eight apartments will have to be registered with the RERA.
Our homes are one of the biggest investments we make in our life. They become the legacy we leave behind for our children. When such a massive investment is involved, RERA becomes a lifesaver for us.
RERA saves us from the helpless position we tend to find ourselves in. We no longer have to go through the agony of not knowing if we will get possession of our property. We can also invest in under-construction property without any fear because our finances are protected by law.
Even after the property is built, there will be no dispute because everything is accounted for under RERA. In short, most insecurities and risk factors associated with Real Estate investment disappear because of RERA.