After the introduction of the RERA Act, 2016, it is to protect the homebuyers, infuse transparency into the real estate sector and provide speedy dispute redressal for the consumer grievances. This law started its full-fledged working from 1 May 2017. The RERA Act leaves no loopholes where the developer/builder can escape after selling a property via wrong ethics. A home buyer can invest safely by opting for a property purchase in the RERA projects.
Advantages of Buying Property in registered RERA Projects
- The good news for the home buyers is that the developer has to offer timely home possession. The developer is also required to divulge the project’s particulars, such as the carpet area, Floor Area Ratio, and a number of housing units to the interested home buyers.
- The developer is obligatory to stock up 70 % of the money paid by the client into an escrow account. This amount is solely kept to build the dream home and not be used for any other project.
- Another key point is that the developer cannot ask the homebuyers to pay for the super built-up area, and the person is now required to pay only for the carpet area.
- The developer also requires clearances from all departments such as Sewage, Sanitation, fire, etc. The amenities and specifications that the developer promises have to be present in a project. He cannot make any of the changes in the plan without the written consent of buyers.
- The developer must take written consent from the homebuyers to make changes in the Site Plan. The developer must also deliver amenity-enabled housing units as promised by him/her at the time of booking.
- The developer is accountable for any defect in the housing structure for 5 years from the time of possession.
- The developer is liable to pay the interest to the home buyer if the completion of a project is delayed. The interest is upon the EMI that the prospect is paying to the bank.
- This Act strengthens the homebuyer’s power as they can file a written complaint to the developer for the maintenance of the Property up to 1 year from the time of possession in accordance with the after-sales services.
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Important Provisions suggests investing RERA projects
There are some important provisions suggest investing in the registered RERA projects that are as below:
- The provisions of the RERA Act, clearly define the documents that are to be attached by the promoter while registering its project and which calms the homebuyers from the tensions of all the security issues.
Compulsory for a promoter to attach documents
Section 4 of the RERA Act makes compulsory for a promoter to attach documents like Land Approval, Allotment letter, agreement for sale, and the conveyance deed to be signed with the allottees, which naturally bind the developer to provide all this to the homebuyer.
Provide the reliability of the developer involved
In order to provide the reliability of the developer involved, information like brief details of the projects launched by the developer in the last 5 years, whether already completed or being developed, its completion and all pending cases against him have also been asked by the developer while submitting the RERA registration application in accordance to Section 4 of the RERA Act, 2016.
- For securing the money invested by the homebuyers in their respective projects, a provision has been inserted in Section 4 (2)(I)(D) of the RERA Act. It states that 70% of the amount realized for a real estate project from the allottees must be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost.
- Section 11 of the RERA Act defines the duties of the promoter, which lawfully binds the promoter to follow these below-mentioned duties and relieves the buyers from the hassles of the property dealings, that are:
- Execute the registered conveyance deed of the apartment, plot, or building, in favor of the allottee along with the undivided proportionate title in the common areas to the association of allottees or competent authority, as the case may be, as provided under section 17 of this Act.
- Be responsible for obtaining the completion certificate or the occupancy certificate, or both, as applicable, from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or the association of allottees, as the case may be.
- According to a Section 13 (1) of the RERA Act, a promoter cannot accept more than 10% of the cost of the apartment as advance and application fees before entering into an agreement for sale. With this provision, the buyer has been safeguarded against the malpractices that were used to happen.
- According to Section 14 (3) of the RERA Act, any structural defect or any defect in workmanship, quality, or service is discovered within the 5 years after the possession of the apartment. The builder shall rectify such defects without any cost within 30 days. In case the buyer fails, he will be entitled to claim the compensation.
- According to Section 12 of the RERA Act where any person makes an advance or a deposit based on the information contained in the notice advertisement or prospectus, or based on any model apartment, plot or building, as the case may be, and sustains any loss or damage because of any incorrect, false statement included therein, the promoter shall compensate him.
The guidelines of the Act help the home buyers in each aspect of the home-buying procedure. A home buyer can keep his money and also property safe by opting for a property purchase in the RERA projects registered under the RERA Act of that particular State. After framing this Act, all upcoming housing and commercial projects were mandatory to register on the RERA portal of that particular State by 31 July 2017.
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