Real Estate Regulation Act (RERA) has created a super buzz in the real estate industry in India. RERA Act is designed to increase transparency between buyers, owners, and promoters of property. Under this Act, there can be the elimination of disputes related to the property in India, and thus an increase of investment in the real estate sector can be seen.
As a consumer, the RERA Act is created to protect your rights and ensure timely delivery of real estate projects. Now from May 1, 2017 onwards a person can be sure of the property that one purchase as every estate project first needs to be registered with the Real Estate Regulatory authorities.
It is one of the biggest benefits of RERA law for the buyers. All property developers in India will have to register their ongoing property projects. Where the area of the land or property proposed to be developed exceeds 500 square meters and the number of apartments or flats offered to be produced exceeds 8 with the authority and provide all the legal documents, details of amenities, construction timeline and facilities provided, promoter company details and its background, details of common areas, details of previously completed projects, etc. before advertisement, marketing, selling, purchasing, offering for sale, inviting individuals to purchase in any manner.
The property developer will also need to update the details on the website of RERA at the time of registration and later on quarterly. Moreover, Quarterly updates will be related to sales, construction and inventory also.
As the promoter will need to provide the date of completion of the project in the legal agreement, an organiser will be under obligation to fulfil the commitment. When there are quarterly updates on the RERA website regarding the construction or development stage of the project, and there will be in-depth monitoring of the construction or building speed and thus timely possession of property.
The chances of timely possession will also rise because 70% of the sale proceeds from the project will need to kept in a designated escrow account and such amount can only be utilised for the property development. As 70% is a huge amount and there will be no diversion of funds from one project to another project, construction speed will also improve considerably which lead to timely delivery.
The RERA law grants for stringent penalties for payment of interest for delayed construction time-period and full money refund with interest in the situation of delays and if the customer opts for a full refund instead of a delay in possession. Such strict rules will motivate the developer for speedy construction and keep the construction timeline.