The Real Estate (Regulation and Development) Act, is the safeguard which protects buyers from getting deceived by the promises and claims which are made unscrupulously by the builders and promoters. The RERA bill, which was first introduced by the Indian National Congress government in 2013. Thereafter, the bill got an approval of the Rajya Sabha on 10 March 2016 and before that by the Lok Sabha on 15 March 2016. A total of 16 states until now has published the rules for their states, out of which Madhya Pradesh is one of the first states to employ it fully.
So what is Real Estate (Regulation and Development) Act?
Real Estate (Regulation & Development) Act which came into effect on May 1st, 2017, is a landmark realty law to protect home buyers from questionable developers. The main objective of this resolution is to protect the consumer interest and to bring in more efficiency and transparency into the country’s real estate sector. As of now, the real estate sector was largely unregulated in India therefore if a consumer had a complaint against any developer they had to make rounds of consumer or civil courts to get justice. Now, in the case of any resentment/injustice, the consumer can go to the real estate regulator for redressal. Real Estate Appellate Tribunals must be set up in each of the states and union territories which must solve all the grievances of a consumer within 60 days from the date of registration of the complaint.
How will RERA aid the buyers/consumers?
- RERA will make it essential for all commercial and residential projects with a minimum of 500 sqmt or 8 apartments to register with the state regulator before launching a project.
- The buyer/consumer will be paying only for the carpet area of the unit. The builder can’t charge the buyer for the super built-up area, as is the practice at present.
- Deposition of around 70 % of funds collected from the buyer in a dedicated account will ensure sufficient funds for the projects leading to on-time possession of the concerned units to the buyers.
- If the promoter blemishes with the possession dates, they will be required to return the entire money invested by the buyers along with the pre-agreed interest rate mentioned in the contract based on the model contract given by RERA. If a buyer chooses not to take the money back, the builder is bound to pay monthly interest on each delay month to the buyer till he/she receives possession.
- RERA also mandates the builders that they cannot ask for more than 10% of the property’s cost as an advance payment booking amount prior to signing a registered sale agreement.
How is Karnataka adhering to the new rules?
Karnataka government, coming under pressure from various sectors, has decided to notify the final rules of the much-awaited Real Estate (Regulation and Development) Act 2017 by April 30. But unfortunately, the rules could not be formed and thus a forum of buyers have resorted to agitations in Bangalore. There have been many recommendations for the position of the chairman of the tribunal too, which also is yet to be finalized. A lot of deliberations are currently going on between the state cabinet ministers about RERA which is headed by Bengaluru Development minister KJ George.
The Real Estate (Regulation and Development) Act is here to be the game-changer in the real estate market, as it would keep the flow of unaccounted cash in check. A lot of bogus builders will have to do more than just verbally satisfy buyers with concrete proof of construction status rather that fooling the customers. The act also would ensure quick redressal, thus resolving the issues between buyers and builders at the earliest without many hassles. The Real Estate (Regulation and Development) Act is here to stay and is going to be a huge advantage to all the buyers out there planning to purchase their dream homes with their hard-earned incomes, thus ultimately bringing a lot more clarity and reliability on the real estate sector.
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