The Real Estate (Regulation and Development) Act of 2016 was passed by the Indian parliament to protect the interests of homebuyers as well as boost investment into the realty sector. It is expected to bring clarity, transparency, accountability and fair practices into the real estate industry so that consumers aren’t taken for a ride by errant builders and due penalties can be imposed on them for malpractices and late deliveries.
The purpose of RERA is to address problems faced by consumers in the form of pricing, delays, quality of construction, adherence to the initial plan, lack of approval by various tribunals and ministries, etc; however, it’s the delays that are the biggest issue, with some projects having been delayed by up to seven years, costing homebuyers severe financial constraints and hassles.
Here are some of the key provisions of RERA:
Compulsory registration of all new and ongoing projects by the builder with the regulatory authority is mandatory. However, projects that are smaller than 500sq meters or less than eight apartments are exempt from this registration.
After registration, the builder needs to publish every detail of the project on the website of the Regulatory Authority.
The builder cannot charge you more than 10% of the total cost as booking amount.
If the project is not handed over on the due date, the homebuyer has the right to withdraw from the sale and get full compensation plus interest. Filing a complaint isn’t required, as the builder has to outright compensate you.
If the homebuyer doesn’t withdraw from the sale, he is eligible for a refund of interest for every month delayed.
If the builder refuses to provide compensation, you have the right to file a complaint with the Regulation Authority. In such an instance, hiring a lawyer isn’t required, however, yourself or a chartered accountant or company secretary will suffice.
If you are still not satisfied with the outcome, you can always file a complaint with the Appellate Tribunal within 60 days.
The Regulator also provides protection to homebuyers where the quality of apartment construction and provision of services is poor – up to a period of five years. The builder will then have to rectify the problem within 30 days.
The builder cannot advertise, market or sell any plot, apartment, building or project without first registering it with Regulatory Authority. All advertisement will also have to bear the unique ID number provided by RERA.
With these new regulations, hopefully, there will be more clarity in the real estate industry.