What is RERA ?

Large real estate companies have been failing to complete projects despite receiving over 80% of payment from house buyers still waiting for possession after several years. This has caused disappointment for many aspiring homeowners. Sometimes, properties advertised by builders in attractive real estate brochures are fraudulent schemes.

Law was established to address this issue and regulate builders to ensure that real estate projects are not scams. This law is known as the Real Estate Regulatory Authority (RERA) Act of 2016, which came into effect on May 1, 2016. The RERA Act sets various standards for builders, promoters, agents, real estate tips, advocates, homebuyers, and others to promote transparency in buying and selling. The clear possession regulations under the RERA Act empower first-time homebuyers with the knowledge to safeguard their financial interests. The new RERA guidelines prioritize the interests of consumers, and states and Union Territories must have their own local legislation that complies with the RERA Act standards, which are available on a state/UT RERA website.

RERA Rules and Regulations 

1. The RERA Act of 2016 outlines the payment provisions, which state that homebuyers must fulfill their obligations by making appropriate payments to the builder as agreed upon in the sale agreement. If there is any delay in revenue, the homebuyers may have to pay interest.
2. The 2022 RERA regulations state that the home buyer can pay the builder up to 10% of the total amount unless the agreement for sale is completed.
3. The new regulations under RERA in 2022 require the distribution of registration fees, municipal taxes, water and energy costs, maintenance fees, ground rent, and other fees as specified in the agreement.
4. The builder is responsible for all expenses, such as water and electricity, until possession is handed over to the buyers.

Highlights of RERA: 

1. Suppose the builder fails to transfer control of the project as per the terms of the agreement to sell. In that case, buyers are eligible for a refund and interest, which is determined by the relevant new RERA laws of the respective state/UT.
2. Alternatively, if homebuyers do not wish to cancel the agreement, they may request an increase in the interest rate for the property loan each month of delay.
3. New investors are eligible for reimbursement with interest, even if the lack of possession is due to the builder’s RERA registration suspension or revocation.
4. Once homebuyers receive the occupancy certificate, they are entitled to possession within two months.
5. Allottees or homebuyers have the right to obtain all essential documents related to the property once they have physical ownership.

Promoters or builders must hand over the title papers concerning common areas to the appropriate authorities or homeowner associations within 30 days of receiving the completion certificate.

Conclusion 

While no law is perfect, the RERA Act 2016 has a significant advantage in that it allows states to formulate their own rules and regulations within the framework of the central legislation. Each state has identified specific issues and tailored its laws to benefit the aggrieved party. Mr. Subhash Goel, director of Goel Ganga Developments, says, “The law has given house purchasers and developers an equal playing field, increased openness in the industry and protected buyers’ rights. RERA has also improved building quality and decreased the number of conflicts between purchasers and developers. These amendments have resulted in fewer project launches, focusing more on completing existing ones.” Developers have become more cautious and compliant with the RERA Act’s regulations to avoid legal battles. All of these changes are aimed at bolstering the real estate sector.