What is RERA? How does it impact buyers & builders? Handy guide for you
Every builder in the city has included the term RERA in advertisement or document created for addressing the potential buyers. You can also see the RERA numbers flashing on their websites. As a customer of real estate property in the city, you must be aware of the term RERA. It becomes immensely important if you have decided to buy a 1bhk flat in Pune city or around. RERA stands for Real Estate Regulation Act and was passed in the year 2016. The act provides protection to the property buyers and helps to create a transparent system in the real estate market. In this article let’s look at the details of the act and how it will affect the builder and the house buyer.
When it was made?
RERA law came into action from 1st May 2017 although it was passed by both houses – Loksabha and Rajyasabha during the month of March in the year 2016. After that, all the land developers and builders were allowed to register their business on the given portal. Now a builder has to register every new project under this act and give all the details to potential customers too.
What is the requirement?
Over the years property or buyers all over the country had to deal with many problems in spite of paying high amounts. The problems included delay in handing over the property or change in the structure, amenities etc. There was no law to protect buyer’s interest. That’s the main reason for formulating RERA where builder is bound to at least answer its customers. This law will also help to increase the transparency of the financial transactions between builder and the customer. Experts say that the real estate market will come out of the phase of suspicion on black money involvement and builders or promoters will be held accountable for every action they take about the project.
What’s the effect on buyers?
First let’s understand one thing that the law confirms positive effects on the property buyers. It has put some sort of bindings on the builders or promoters to make the process of house development and sale more clear and transparent. Some of the points covered on the side of buyers in the law are as follows –
- The builder can’t advertise the project in public before it is registered under the RERA portal.
- A builder must inform the buyer about any alternation in the original plan or structure
- Major alternations and changes must be approved or accepted by at least 2/3rd of the buyers.
- Information regarding approvals, layouts, status should be shared with the subcontractors.
- Defect liability period of the construction site is increased to five years to ensure the quality of the project
- RWA formation is compulsory for all projects after sufficient numbers of flats are sold from one particular project.
- Last but not the least – builder must adhere to the timeline he has proposed in the contract document. This is certainly positive point for the buyeras they can get timely possession of their property.
- The law is made to standardize the process of flats or apartment construction and make it hassle free for both builder and a customer.
The real estate sector in India was not regulated by any strong laws until now. So the developers or promoters were free to make their own rules and clients were literally helpless. This act is not applied in all states and union territories of the country and all builders and promoters are bound to follow the same procedure.