The Real Estate (Regulation and Development) Act, 2016 (RERA) is a comprehensive piece of legislation in India that aims to regulate the real estate sector, protect homebuyers’ interests, and promote transparency and accountability.
RERA promotes transparency in the real estate industry and seeks to protect buyers from unfair builders’ practices. It establishes certain standards for the construction and development of real estate, improves transaction transparency, and grants home buyers several rights.
The primary goals of RERA are to maintain transparency, reduce the possibility of fraud, implement pan-India standardization, and ensure professionalism in the real estate sector. RERA also requires each state to create a Real Estate Authority and an Appellate Tribunal to handle complaints and disputes.
Here are all of the benefits for property buyers:
- Right to Property Information: RERA empowers buyers with the right to know every crucial detail of the real estate project they want to invest in, allowing them to make sound decisions based on accurate, real-time information and cost calculations without any discrepancies or misleading advertisements.
- Protection from Unfair Practices: RERA aims to protect buyers from unfair practices of developers and builders, ensuring that their rights are safeguarded and they are not exploited.
- Establishment of Real Estate Authority and Appellate Tribunal: RERA mandates the establishment of a Real Estate Authority and an Appellate Tribunal in each state, providing a mechanism for quick dispute resolution and allowing buyers to file complaints in case of any wrongdoing by the builder or developer.
- Transparency in Transactions: RERA specifies certain norms for building and development of real estate, enhancing transparency in transactions and ensuring that builders comply with rules and regulations.
- Standardized Carpet Area: RERA has standardized the calculation of the carpet area, which directly impacts the price that a builder charges for a piece of real estate, ensuring fairness and transparency in pricing.
- Utilization of Funds: RERA ensures that builders put a certain percentage of funds for property development in an escrow account, preventing the diversion of funds and adding security to buyers by reducing delays in project completion and additional costs.
RERA’s Applicability
RERA applies to all builders and developers except the following:
- Where the proposed development area does not exceed 500 square meters or the number of apartments proposed does not exceed 8
- Where the buyer has already received a completion certificate prior to the RERA’s implementation
- For the purpose of renovation, repair, or redevelopment that does not include marketing, advertising, selling, or new property allotment.
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