What is RERA Act for Builders, Buyers, Investors 2021
What is RERA
What is RERA, Rera Rules, and what is Rera certificate? To seek the protection of home-buyers and boost investments in the real estate industry, the Real Estate (Regulation and Development) Act, 2016 was formed. The Act of the Parliament of India establishing a Real Estate Regulatory Authority (RERA) in each state, it puts regulations in the real estate sector. The RERA Act is an adjudicating body known for speedy dispute resolution. The Central and state governments share the responsibility of informing the Rera Rules under the Act within a statutory period of six months.
In this article we will cover:
- What is RERA
- Rera Rules
- Rera Rules for Builders
- Is it safe to buy RERA approved project?
- What is Rera Certificate
- Conclusion
What is RERA and when did it come into force?
Well, let’s answer the question i.e. What is RERA? It came into existence on 1 May 2016 with 59 of 92 sections informed. The remaining provisions emerged on May 1, 2017. On 10 March 2016, the Rajya Sabha passed the bill, and on 15 March 2016, the Lok Sabha passed the bill.
Now it is clear that What is RERA, let’s dive into the Rera Rules. The Rera full form is the Real Estate Regulatory Authority (RERA).
Rera Rules
The Real Estate (Regulation and Development) Act, 2016 under Section 84 envisages that within the time of six months from its opening date, State Governments will form the rules to put the provisions into effect associated with the Act.
On 31 October 2016, the general rules of the Real Estate (Regulation and Development) Act, 2016 were delivered by the centre, through the HUPA (Housing & Urban Poverty Alleviation) Ministry.
All the Union Territories like Chandigarh, Lakshadweep, Daman & Diu, Dadra & Nagar Haveli and Andaman & Nicobar Islands fall under these rules to be followed.
The following Rera Rules are to be followed:
- All the commercial and residential real estate projects are liable to register with the Real Estate Regulatory Authority (RERA) for beginning a project. The projects with land over 500 square meters, or eight apartments fall under this to provide transparency.
- Builders have to post Quarterly updates (every 3 months) on Construction progress.
- The real estate builder will have to transfer 70 percent of the money received from customers to an escrow account to ensure the money will not be used on other projects.
- According to Rera Rules, sale agreement standardization will be followed. This will protect buyers from various penalties and charges and promote equality.
- The promoter is not allowed to receive an advance payment of more than 10 % of the cost of the project, plot, etc from the customer. To do so, he has to get a written agreement from you and register the same.
- Under RERA, the defect liability period is given 5 years to rectify the defects.
- As per Rera Rules, the developers are instructed to sell real estate properties based on carpet area and not super built-up area.
- Promoters will reveal a clear title over the property and project.
- Upon giving false information to home buyers, the buyer can either ask for a refund if he does not wish to continue or if he does, the builder is liable to pay the penalty.
- In the event of not receiving the possession timely, the builder has to pay the entire amount to the buyer.
- A per Rera rules for builders, If the builder plans to make any type of alterations in the specifications of the apartment or the property, he has to take permission from the buyer.
- The promoter cannot transfer the majority rights and liabilities to a 3rd party without the written consent from buyers.
What is the use of Rera? – Rera Rules for Builders
- This act is beneficial for all the parties involved i.e. buyers, agents, and builders.
- Rera promotes credibility.
- Transparency is given to all the home buyers.
- Builders cannot provide false information to home buyers.
- Helps channelize investment into the sector.
- It attracts foreign investors in the real estate sector.
- Boost the growth of financial institutions.
Is it safe to buy a RERA approved project?
Yes, without any doubt the Rera approved projects are in the favor of home buyers. Under this act, buyers can enjoy absolute transparency and authenticity. Rera is a huge development that works against thief developers who do money laundering by providing false information.
If you are a real estate agent, you are responsible to get yourself registered under the Rera Act. If any buyer, promoter or agent is not having complaints associated with the real estate project, they are encouraged to file a complaint with RERA.
So, undoubtedly this answers your query i.e. Is it safe to buy RERA approved project? However, you need to cross-check and verify everything about the property at your end also.
Rera approved means that the properties are verified as per RERA Rules and real estate developers have shown complete authenticity and credibility in presenting the property to home buyers. Rera approved means the real estate property is safe to invest in.
What is Rera Certificate?
As per Rera Certificate, under the Real Estate Act, all the commercial and residential real estate projects with land over 500 square meters, or eight apartments, are liable to register with the Real Estate Regulatory (RERA) for launching a project to provide greater transparency in project-marketing and execution.
Conclusion
With RERA in place, every real estate developer is liable to provide every bit of information to homebuyers about the progress of construction, offer them builder or developer is required to inform homebuyers of the progress of construction, hand over the keys to their property by the mentioned date, and follow every rule as put out by RERA Punjab, to ensure authenticity and accountability. Rera Act safeguards the investments made by the investors. It fosters their confidence and further encourages them to make more investments.
