Know a few things about RERA
Urbanisation has led to demand for more and more residential properties. Construction is the third largest secret in terms of FDI inflow, yet not much is done to regulate this sector. Just like banking, insurance and securities, the real-estate sector needs to be regulated. The Indian property market was not regulated like those in other developed countries. There were many loopholes in the system that called for it to be addressed, making this sector more transparent and reliable.
To protect the interests of home buyers RERA was introduced in 2016. RERA stands for Real Estate Regulations Act. Home buyers enjoy several rights due this act, and the builders have to abide by certain rules and regulations because of this act. The common man usually dreams of buying a house, putting all his savings into buying real estate. However, there were not many rights or protections given to home buyers before the introduction of RERA.
India’s real estate sector is expected to hit US 1 trillion market size by 2030 which accounts for 18-20% of India’s GDP. It is quite evident that when a very important sector like real estate is left without monitoring, it will endanger the interests of both the buyers as well as sellers.
If you are a home buyer, then you must be interested in knowing about the benefits and rights that RERA provides to you. The primary aim of RERA is to protect the buyers from the malpractices of builders. The other benefits are discussed in this article which are as under:
Benefits of RERA:
- It reduces the risk of builder insolvency: A builder usually works on many projects and transfers the funds from a project to another project. RERA does not allow that. The builder has to deposit 70% of the amount realised for a particular project in a separate bank account. The withdrawal is also subject to certification by a civil engineer upon completion of the project. This avoids misuse of money collected from buyers by diverting the funds to other projects.
- False promises are not entertained: If there is a mismatch in the commitments made by the builder and the actual project, then the buyer is allowed to withdraw from the project. Not only that, he can get a full refund as well along with interest. He can also claim compensation.
- Uniform carpet area: Before the implementation of this act, each builder had his own method of calculating the carpet area. Under this act, a standard formula is prescribed to make calculations. There has been a definition given by the act and this prevents the builders from escalating the rates of the property.
- Rights in case of delayed possession: The buyer can either withdraw from the project and get full refund or continue with the project and get compensation for delayed completion. This will carry the interest payable from the due date of completion of project till actual date of completion.
- Advance payment: The builder can take only 10% of the amount by way of advance of the cost of the apartment, villa etc. before entering into an agreement of sale.
- Rights in case of defect after possession: If the buyer finds any structural defect or a defect in the quality, provision of service in the first five years after the possession of the house, then the builder shall have to rectify it, within 30 days at no extra cost.
- Defect in title: If there is any defect in the title of the property, then the buyer can claim compensation from the builder. And this right is available irrespective of the time of your occupancy. It is not barred by limitation.
- Interest rate on default: If there is default in completion of the project by the builder or default in the payment by the buyer, then the rate of interest to be paid shall be the same for both the buyer and the seller. Earlier the buyers used to pay more by way of interest if there was any default on their part.
- Right to information: The buyer should get to know all the information pertaining to the project like play layout, stage wise completion status etc.
- Grievance redressal: If you have any grievances against the builder, then you can take it to the state authority set up under RERA. It has the power to redress all of them. You can also file an appeal with the Appellate Tribunal in case you are not satisfied with the order by the state authority. The AT will redress the case within 60 days. A builder shall have to deposit 30% of the penalty, before appealing to the AT or such higher percentage as may be determined by the AT.
RERA covers all kinds of residential and commercial properties. RERA authorities get several complaints and they are listening to the concerns of the aggrieved buyers. However, RERA needs to be more effective when it comes to certain areas. It has already started to gain trust in the eyes of homebuyers and more can be expected in future once the system becomes profound.
The Odisha RERA site can be accessed at https://rera.odisha.gov.in/ https://rera.odisha.gov.in/
Bhoi Smrutirekha Dharanidhar