Real Estate Regulatory Authority (RERA) Act was introduced in 2016 to add transparency and safeguard the interest of homebuyers. With the introduction of this act, buyers are empowered and can feel secure with their purchase. It has refined the processes of Indian Realty and has induced a sense of accountability in the system. Reputed builders have also benefitted from RERA as more buyers are now investing in the residential real estate due to the standardization it has brought to the real estate market. We are now looking at an efficient, structured and accountable phase of Indian Real Estate due to RERA.
Let’s Take a Look at the Major Benefits of The RERA Act:
With the RERA Act in place, builders won’t be able to delay the projects and hence buyers can enjoy the possession of the properties. Under this act, the builder needs to share the delivery date of the possession of the flats; any delay in the possession will lead to a penalty for the builders.
Right to information
Buyers are entitled to know all the information about the project. From plan layout to the status of completion, builders need to disclose every detail to the buyer. This is one of the major benefits RERA has provided relief to the buyers looking forward to early possessions with timely updates for them to plan their finances.
Standardization of Carpet Area
Earlier every builder had a different method to calculate the carpet area which led to a lack of clarity and disappointment at the time of possession. However, RERA Act has now clearly defines the carpet are i.e.‘the net usable floor area of an apartment, excluding the area covered by the external walls, exclusive balcony or verandah area, areas under services shafts, and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment’.
Since the carpet area is clearly defined builders need to calculate the area as per the standard calculations ie. Cost of property = Carpet Area x Rate per square feet. This clarity has left no room for manipulation in the calculation of the carpet area.
Reduction of bankruptcy risk of the builder
Under the RERA Axt builder is liable to deposit 70 percent of the funds realized in for the project in a separate account, which can only be withdrawn on the completion of the projects. This has led to better fund management form the builder’s end as they now have to keep funds for completion of one project before diverting them to any other project.
Defect after possession
If there is any structural defect or fault in the construction, the builder needs to rectify the defect within 30 days with no extra cost. The builder is liable if the defect is discovered within 5 years of the possession of the property. In-case of non-compliance to the above practice, the buyer is entitled to claim compensation from the builder.
In case of any grievance, the buyer can approach the state authority set up under RERA. In case of dissatisfaction with the order, one can also appeal to the Appellate Tribunal against the order of the authority.
RERA has uplifted the demand for residential projects in real estate. Most of the upcoming projects by reputed builders are now RERA registered and bringing a transformation in the Indian realty estate market with enhanced transparency