7 Ways in Which RERA Act Benefits Property Buyers in India.

RERA committee gives home buyers of India the right to ensure the proper execution and timely completion of all under-construction projects. It covers both commercials as well as residential projects and works towards streamlining the realty process. This article highlights the major benefits of RERA Act for home buyers.

To address the grievances of property buyers in India and safeguard their interests, the Government of India implemented the RERA Act on all real estate developments across India.

The RERA Act has been formulated to promote accountability, efficiency and transparency in the real estate market in India and is aimed to protect the home buyers’ interests who otherwise were often cheated by real estate developers due to failed execution of layout plans, delay in the delivery of under-construction projects, lack of clarity while calculating the carpet area of the property, and more.

Under the RERA Act, every state government has been asked to formulate an Appellate Tribunal Committee that will work toward safeguarding the interests of home buyers in India and can even penalize real estate developers and builders if they are not carrying out their business as per the structured norms set by the committee.

Here we share the 7 major benefits of RERA Act for home buyers:

1. Right to information about the property

RERA Act has made it mandatory for real estate developers in Ahmedabad, Bangalore, Pune and other cities and states of India to share all the vital information about the under-construction property with the home buyers. This includes the project layout, plan details, prospective date of completion, stages of development and more. Home buyers can now hold the builder accountable for any delays in the project or if he deflects from any of his promised particulars. In fact, there is even a provision of imprisonment if the builder is found guilty.

2. Standardized carpet area

Earlier every builder formulated his own formulas to calculate the carpet area of the property. This caused a huge variation in the size and prices of the property. RERA Act has standardized the formula to calculate the carpet area of the property. As per RERA, carpet area is defined as “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”.

Using this defined formula, the builders now have to calculate the carpet area and charge home buyers accordingly, which has brought a huge amount of price stability in the real estate market in India.

3. Strict norms for any deflection in the construction of a property

While buying a property, the quality of its construction is of prime importance. But now RERA registered developers in Gurgaon, Delhi, Noida, Mumbai and other cities of India have to ensure that they are using only quality material for the construction of their building because as per RERA rules, any structural defect in the property within 5 years of completion will have to be repaired by the developer.

4. Stringent rules for the timely completion of a project

RERA has made it mandatory for all real estate developers to notify the property possession date to all home buyers at the time of booking. Not just that, RERA has also put strict rules into place to ensure that builders stick to their delivery timelines, otherwise they will have to pay an interest rate of 2% over and above banks (SBI’s) lending rate to home buyers. Apart from this, they may also have to face rigorous imprisonment for up to 3 years.

5. Money taken for the project will be used for that project only

After the formulation of RERA, builders under no circumstances can use the money taken from buyers for the construction/ completion of other projects. In fact, builders now have to transfer 70% of their funds to an escrow account and can subsequently draw the money as per the stage of construction of the project.

6. Realty developers need to seek all clearances before starting the project

In India, there are a number of new projects in Gurgaon, Noida and Mumbai that have been put on hold due to legal and clearance issues. This causes a lot of dilemma to home buyers whose hard earned money gets stuck in the detained projects. RERA has made it mandatory for all builders to seek all necessary clearances before initializing the booking for the project. The builders are now also required to formally register themselves with the regulator as well as disclose even minute details about the project for hassle-free processing and possession of the property.

7. All grievances will be addressed and resolved quickly

RERA has established appellate tribunals in each state to ensure effective and timely resolution of all builder-buyer disputes. The regulatory bodies have to resolve all cases within 120 days of filing an application.

Real estate market in India has seen a subsequent rise after the formation of RERA committee. Today to safeguard their interest and ensure timely delivery of projects, most home buyers are looking for developers and projects that are RERA registered. In case you want to buy a property in India, it is strongly advised to choose only those developers and agents that are registered under RERA.