Over the several years, the real estate sector has been witnessing numerous challenges in terms of delay in delivery of projects, uncompleted projects, rising cost of construction, regulatory issues, demonetisation, etc. With RERA being implemented on 1st May, the real estate panorama is poised for change with the presence of a regulatory authority to develop rules and regulations related to the sector. RERA is a win-win situation for both developers and buyers as the former will enjoy the benefits of consumer confidence coming back in the market while the latter will benefit from much-needed transparency and on time delivery of projects.
1. Timely Delivery of projects: Timely delivery of projects has been the biggest concern of the home buyer as most of the time the developer siphoned of the money to other projects instead of completing the existing ones. Now, RERA Act will ensure the developer to maintain a separate account in which 70 per cent of the monies taken by the buyers will be deposited in an Escrow Account and this fund will only be used for construction and completion of the project. Through this Act, the developers will be binded with the project delivery in a time bound manner and will help the end users to manage their cash flow effectively in terms of EMI and rent.
2. Ongoing Projects: All the developer have to disclose the original sanctioned plans, and changes made in the project at the later stage and duration of the time within which the developer will complete the project.
3. Registration of projects: Each state will set up its own regulatory authority who has the responsibility to register and regulate projects under this Act. The authority also has to develop a website for the public to view the real estate projects that have been registered by the authority. This, in turn, will help the buyer to invest in the real estate project registered under the Act. On the other hand, developers also need to disclose all the information related financial statements, legal title deed and other documents in order to get their projects registered under the Act.
4. Project Quality: The quality of construction has been the biggest concern for many home buyers. Under RERA, in case of any structural defect or poor quality, it will be the responsibility of the developer to rectify such defects for a period of 5 years.
5. Project Registration: No developer can advertise/market the project, apartment or building without registering the project with the RERA authority.
6. Delayed delivery compensation: The developer has to pay penalty in case of delay in possession or return the total amount with interest at a defined rate as mentioned in the agreement of sale to the home buyer failure to deliver the project within a specified timelines.
7. Online information: After registering with regulatory authority, the builder has to update all the project details online on authority’s website and update the same on regular basis in terms of status of the project and other information. This, in turn, will help the buyer to get accurate information about the project and make informed decision while investing in the project.
8. Booking amount: Generally, the developers ask for 10 per cent of the total cost of the property as booking amount but under the RERA act, the developer cannot ask for more than 10 per cent of the booking amount as an advance without making an agreement for sale.
9. Disputes & grievances: Every state will have regulatory authority which will be formed and address all the grievances related to the project. In case of any dispute and non-delivery, the Act entails a clear process of redressal, thus ensuring buyer’s interest and money is well-safeguarded. The buyer can approach the Appellate Tribunal and can resolve the issue related to the project.