The RERA Bill

To begin with, Most of us would have already heard about RERA ( Real Estate Regulation Act ), A bill that was passed by the government of India in 2016, aiming to reduce the discrepancies between the buyer and the seller and most importantly to protect the buyers of the property in the real estate sector in terms of transaction and quality.

RERA is applicable to all builders and developers except the case where the area of the land proposed to be developed is below 500 square meters or the number of apartments does not exceed 8.

In this post you will get to know the advantages of this bill for both the buyers and developers of the property and also the rules and regulations to be followed by both the parties.

Advantages For the Buyers :

1. Restricts the Rotation of Money: Earlier there have been cases where the promoter used to raise funds and divert it to his other projects in case of an urgent need but now it is impossible to do so because the promoter is liable to hold 70% of the money from time to time in a separate bank account, which should be assigned only for that particular project. The promoter shall withdraw the money only after it is certified by an engineer , architect, and a charted accountant, to cover the cost of that particular project
2.  Limit in Advance Payment:  The promoter is entitled to receive an advance payment of not more than 10 % of the value of the property that has been promoted. This gives a credit advantage to the buyers of the property.
3. Full Refund in the case of a mismatch: If there is any difference in the projected project compared to the actual project, executed without the knowledge of the concerned buyer, then the buyer can claim a full refund along with interest for those false commitments.
4. Rectifications for Defects: In case of any defects regarding quality or service found in the property after possession  by the buyer within a 5 year period then the promoter should rectify them at no extra cost within a period of 30 days.
5. Delay in Completion: If the promoter fails to complete the project on time then the buyer can either claim a full refund and withdraw from the project or can wait for the project to be completed, meanwhile can claim the interest for delay in the completion of the project.
6. Transparency: The Promoter must provide all the necessary information requested by the buyer about the project, for example: schedule of completion, layout plans etc. This feature gives full power to the buyer to know the status of the project from time to time.

Advantages For the Promoters:

1. Payment on Time: It is mandatory to pay the full amount on time to the promoter as per the agreement and if there is any delay by the buyer then he or she will be paying interests on the overall amount. The buyer should also pay the share of registration charges, maintenance charges, municipal taxes, electricity charges etc.
2. Credibility and investments: Since the regulations have become stringent the Real estate sector will attract more foreign investments and the transparency in the execution now will increase the credibility of the promoters.
3. Eliminates fake Promoters: There are plenty of cases where malpractices has been done by several fraud real estate developers in terms of money transactions and quality.This bill eliminates them and increases the client traffic for valued and certified promoters, which in turn builds trust between the parties.

To end with, RERA bill will be a very big advantage to the buyers of the real estate sector even though this bill will have a great impact on the pricing of the property and the economy of the real estate sector.

Click here to Download The RERA Bill