What Is The Purpose Of RERA? And How Does It Help Buyers?

  • The main object of Real Estate (Regulation and Development) Act, 2016 (RERA) is to enhance transparency in the real estate related transactions by creating a organised and a uniform regulatory environment.
  • It's objective is protecting the interest of customers or buyers and making real estate developers liable for timely completion of projects along with committed specifications, facilities and amenities.
  • The RERA Act makes it mandatory for the promoters to deposit 70 percent of the customer advances or project funds into a separate dedicated project account so the funds are utilized only for the related project.
  • This mechanism ensures that the customer advances are not diverted towards other project development, and the promoters do not delay the project on account of lack of funds.
  • In the case of non-compliance, the Act has stipulated high financial penalties, including promoters to compensate buyers for incorrect statement with a full return of the property cost with interest.
  • To strengthen the transparency in favor of the buyer, the Act makes it mandatory for the promoter to register existing as well as a new project/s with authority before launching or advertising it.
  • In addition to the RERA Registration, the promoter is required to provide ‘full and true’ disclosure in terms of details of projects undertaken in the last 5 years with timelines.
  • The promoter is also required to disclose names and addresses of real estate agents, contractors, architects, and structural engineers to bring greater transparency to all reality projects and protect buyers’ interests.
  • The promoter is required to provide a declaration supported by an affidavit stating that he has legal title to the land.
  • The Act has made the promoter equally liable for the delay in handing over the project, thereby safeguarding the interest of the buyers and if there are any delays in the project, then the promoter will be liable to pay.
  • The Act has made it mandatory to sell the apartments only on the carpet-area basis and in case of more than 5 percent decrease in the carpet area, the promoter has to refund prorated amount to the buyer.
  • Under this Act, the developers are prohibited to make any changes in the sanctioned plans.
  • If a customer or the buyer find any structural or workmanship defect within 5 years from the date of being handed over the flat, then the developer will have to rectify it without any further charges.
  • The developer is not to restrict sale by caste or community. If he does so, the buyer has the right to file a cased against him to the RERA authority.
  • If a project gets delayed, then the developer will be liable to pay the monthly interest on bank loans taken for under-construction flats.