RERA Leads Real Estate | Vajra Builders & Developers
Real Estate industry is a gigantic sector but was growing wildly without much of rules and regulations. Investments in this sector were losing its popularity due to opaque transactions and a lot of fraudulence. Hence this vast empire needed an authority who will frame some rules and regulations to bring this wildly grown sector into a sector where transparency is maintained in all the transactions and there is no chance of fraudulence. It was then, in 2016, RERA came into force and this authority is to an extent successful in maintaining discipline in this vast industry.
1 . RERA and its Rules
To guard or protect the homebuyers and also to boost the investments in the huge real estate sector, Real Estate Regulatory Authority also known as RERA was created as per the Real Estate (Regulation and Development) Act, 2016. This disciplinary Authority came into effect from May 2016 but was in full force from May 2017. All the state governments were to apply RERA in their states, so they were given a period of six months to set the rules of their states in accordance with the provisions of the Act. Here are a few rules that are set for RERA.
1 . 1 . Security for Homebuyers
The main aim of RERA is to strengthen the security of homebuyers. Under the RERA Act, the advance payment, which a homebuyer has to give to the builder, should not be more than 10% of the cost of the property, before the sale agreement is signed. Moreover, the builder should have an Escrow account where a minimum of 70% of the buyers’ and investors’ money will be kept, and will be released to the builder only for construction and land related costs. This reduces the risk of insolvency of the builder. Prior to the implementation of RERA, promoters and builders were permitted to move funds from one project to that of another, in case of multiple projects being developed at the same time. The drawback of this facility was the late deliveries of the projects. This facility doesn’t exist now. With the addition of an Escrow account, the builder can withdraw funds for his project only after certification by an engineer, a chartered accountant, and an architect of his project. Such strict rules prevent projects from getting delayed. Strict vigilance is maintained by RERA and under no condition can the builder use this money for any other purpose. This rule of RERA helps the homebuyers and the investors in getting timely deliveries of their homes and the funds of the project are also secure.
1 . 2 . Transparency Has Marched In
With the advent of RERA in the real estate sector, transparency has gained grounds in all the transactions, be it selling or buying of a property. A number of rules are laid down to maintain transparency in the sector. Builders have to register their projects with RERA and for doing so, they have to submit the required documents and obtain a registration number. Homebuyers are instructed to check the registration number allotted to the project, prior to booking their abode. A RERA project protects the rights of the homebuyers and investors. After submitting the plans of the ventures, the builders have no right to make any major changes in the plan of the building. In case it gets compulsory to make any changes, then the builder has to take the consent of the buyers.
1 . 3 . Promotion Only After Registration
A builder or a developer has no right to advertise his project until it gets registered with RERA. The unique registration number which he gets for his project after the registration with RERA should be mentioned in all the advertisements of his project.
1 . 4 . Fairness with Respect to Carpet Area
So far the properties were being sold based on the Super built up area but with the entry of RERA, this trend is no more functional. As per RERA, the developers are instructed to sell the properties based on Carpet area and not on Super built up area. There is a standard formula to calculate the carpet area and homebuyers have to pay accordingly. In the event of the project getting delayed, the buyers are entitled to get some compensation.
1 . 5 . Quality has to be Maintained
If any structural issue arises within 5 years, after handing over the property, then the builder is expected to rectify the same within 30 days of the complaint.
2 . Know About RERA Compliant Property
Every property is not RERA Compliant. A property which is more than 500 square meters in area has to be registered under the RERA Act prior to the launching or its advertisement for promotion. Builders with more than 500 square meters project area should open as Escrow account and deposit 70% of the total payment and a proof of the same has to be provided. All the required consents for the initiation of a project must be taken prior to the registration with RERA. All the details of the project have to be uploaded on the official website of RERA, along with its registration number, prior to the promotion of the project.
3 . RERA is for All
RERA not only supports the homebuyers but also the developers, promoters, agents, investors and above all the sector itself. With its rules and regulations, RERA has brought in a number of positive changes in the sector and now RERA leads the sector. The builders now don’t face any insolvency issues during the project period, as 70% of their funds are available in the escrow account. The agents also have to get registered with RERA before they begin the promotion of any project. The Appellate Tribunals are for everyone.
4 . RERA Leads Real Estate in TS
Along with many other states, Telangana has also embraced RERA with open arms and now RERA leads Real Estate in Telangana. The purpose of the Act in TS is to develop regulation and promotion of the sector, to make sure that transparency and efficiency is maintained in all the transactions of real estate. TS RERA establishes an adjudicating mechanism for speedy dispute redressal and protects the interests of the consumers. A website of RERA is also maintained in TS which holds the records of registered real estate projects and agents for public viewing. TS has also established Appellate Tribunal to hear appeals from the decisions, directions or orders of RERA. This is the perfect time to say that RERA leads Real Estate sector.
-Dharmapuri Mallikharjuna Raju
