Real estate (regulation and development) act, is the parliament act which protects home-buyers from the unfair practices of the builders and helps to increase more investment in the real estate sector. It came into force from 1st May 2016.
For a long time, people are complaining about the unfair practices of developers like – unstructured house value, delay in possession, developers are not delivering what they promised, blockage of money of buyers & due to the declaration of insolvency of developers money of the buyers got wasted. Due, to which the investment in the real estate starts declining as people are losing faith over the developers. To avoid such things the Government of India has developed a model, which aim to boost structured and fair transactions between buyers and sellers. It helps to create the purchase of real estate more simpler helps to bring more transparency in the transaction and helps the buyers from saving their money from getting blocked. Which, ultimately increase the investment in real estates.
Benefits of RERA –
Earlier, every builder has their own technique to calculate carpet area, for the same flat the carpet area is 1500 sq. ft. and for others, it may be 1600 sq. ft. Through these practices, they fooled the buyers as they charge the price according to that. According to RERA, the carpet area is “the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment”.
In case of any default in payment by buyer or delay in possession from builder side then in that the interest paid will the same in any case and for both the parties.
Earlier, it used to happen that if the builder has committed any default then they pay less interest to the buyer, on the other hand, if buyer commits default in payment then the buyer pay higher interest to the builder.
Now, as per RERA the interest for both the parties will be the same.
Now, the builder has to create a separate bank account for every project they have. They can withdraw money from that account only for using it in the completion of the project and that also must be approved by the engineer and chartered accountant of the builder. Earlier, it used to happen that the builder transfer money of Project A to Project B. But after RERA this won’t be happening
A regulatory body will set up in each state to resolve any problem related to builder-buyer. Any, disputes related to these matters will be solved under 120 days.
If any time buyer feels that the builder is not delivering what they have promised, or delay in delivery or any structural defect, then they have the right to withdraw from that project, wherein the buyer will get full refund what they have paid (with interest *if applicable)