What is RERA and how will it Impact Real Estate Buyers?

Buying a home is every person’s dream. However, not everyone is able to on account of the high estate prices that are very high as compared to the income levels. Moreover, adding to this misery is every real estate developer own norm. Every real estate builder must follow certain practices and structured buyer-builder requisites. Be it residential projects in Thane or Mumbai or even Pune; there are certain norms that need to be followed.

Everyone invests their hard-earned money into buying a home. Hence, to protect and safeguard these interests of the home buyers and to ensure builders do not exploit them, the government introduced the RERA Act to protect the interest of the home buyers.

What is RERA?

RERA stands for Real Estate Regulations Act. It was introduced in the year 2016 to safeguard the interest of home buyers. The main aim of RERA is to offer relief to buyers from the malpractices of unfair builders. It has offered several rights to home buyers and has also specified certain rules and regulations to be followed by all builders or real estate developers.

Why RERA?

Home buyers constantly complain about real estate transactions being lopsided and heavily in favour of the developers. RERA aims to create a more equitable and fair transaction between the home seller and buyer. With this, RERA hopes to make real estate purchase simpler by bringing in better accountability and transparency. This act is mandatory for each state and union territory to form its own regulator and frame the rules which will govern the functioning of the regulator.

How will RERA Impact Home Buyers?

With RERA, certain benefits will be applicable.

–    Standardized Carpet Area

Earlier, the carpet area on which the builder calculates the price of the property was not defined. Builders used to come up with their own method of calculation of the carpet area. However, with RERA, the definition of carpet area has been specifically defined, and this would introduce standardisation in its calculation.

–    Rate of Interest

In cases of default in payment by the buyer or in the completion of the project by the builder, the rate of interest to be paid shall be the same for both. RERA act has now clearly specified that the interest rate shall be the same.

–     Reduces the Risk of Builder Insolvency

Since a developer has multiple projects being constructed simultaneously, there were free to divert the funds raised from project A to fund the construction of another project lined up. With RERA, the builder is now liable to deposit 70% of the amount realized in for the project in a separate bank account.

–    Right of the Home Buyer in case of False Promises

In case there is a mismatch in the commitments made by the builder, the buyer has the option to withdraw from the project and is entitled to a full refund of the amount paid.

–     Advance Payment

The builder can take not more than 10% of the cost of the flat or villa as advance or application fees.

–    The right of the Buyer in case of Defect after Possession

In case of any structural defect or any other such problem in workmanship, quality, or service is discovered within 5 years after possession, the builder will rectify the defect at no extra cost.

No matter the type of home or apartment you choose to buy; be it a 1 BHK in Thane or a 2 BHK in Thane, Ghobunder road, these norms apply to all builders. So, when booking your 3 BHK flat in Thane at Vartak Nagar or a villa in Lonavala, ensure you are aware of these rules and regulations put forth by RERA.

What is RERA and how will it Impact Real Estate Buyers?

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