Sipping on a cup of coffee, knowing you are secure in your own home is what everyone dreams of.
A home is not just a dream but an absolute need, which may, at times, demand your entire life’s savings. However, with the ever-increasing real estate prices, not everyone can afford buying a home; to add to this irony, the builders or developers have their own set of norms that change as per their convenience. Different builders follow different set of rules and structure the builder-buyer agreement in a way that is beneficial to the builder alone.
The common man that invested his life-long savings in buying real estate has little say in the matter with very limited rights that protect his interests.
However, these were dark days of the past. With the Indian Government introducing the RERA Act, property buyers’ rights and interests are now safeguarded and they cannot be exploited by property builders and developers.
What is the RERA Act?
The Real Estate Regulations Act, introduced in 2016 is abbreviated as RERA. It was formulated to safeguard the rights of property buyers. RERA’s main aim is to protect buyers from the builders’ unfair malpractices.
RERA has specified certain rules that the builders and developers as well as the buyers of real estate must adhere to, in order to maintain transparency in the real estate sector. It has also provided several rights to home buyers so as to protect them from the malpractices of the builders. Most importantly, the RERA Act has also created a Real Estate Authority and Appellate Tribunal for each state, which means that the home buyer may file a complaint against the builder to this authority should the builder be found indulging in any wrong doings or malpractices.
Rights of buyers under RERA
The RERA Act proves to be a messiah for every property buyer. If you plan to invest in real estate or are already looking out for real estate projects to invest in, it is essential you are thorough with the RERA Act in order to protect your own interests. Property buyers enjoy several rights under this act, keep reading to know more!
Standardized Carpet Area Calculation Method
It is the carpet area that decides the price of the property. Before the RERA Act every builder or developer had a different method to calculate this carpet area. For Instance builder A would calculate the carpet area of flat XYZ to be 1600 sq ft, while builder B would calculate the carpet area of the same flat to be 1800 sq ft. This unfair phenomenon often occurred due to the lack of a standard calculating method that was implemented by all builders. Thankfully, with the advent of the RERA act this issue is now taken care of. A standardized calculating method is now clearly defined under the RERA Act and the same formula is applied by all builders to calculate the carpet area of a property.
Right of the Buyer in case of Delay in Possession
Should the builder fail to complete the project on the stated date, then the buyer may opt to:
To withdraw from the project wherein he is entitled to a full refund, along with the interest payable from the due date of completion till the amount is refunded.
To continue with the project till its completion wherein he is entitled to compensation, along with interest payable from the due date of completion of project till the project is actually completed.
Right of the Buyer in case of false promises
In case the builder has not delivered the project as per the plan stated to the buyer or the actual project differs from the project that was promised, the buyer may opt to withdraw from the project wherein he is entitled to a full refund of the amount paid in advance.
Advance Payment
Under the rules of the RERA Act, the builder is allowed to charge an advance payment of not more than 10% of the cost of the property from its buyers as an advance or application fee, before entering into an agreement of sale. The buyer may file a complaint with the RERA Authority should any builder demand for an amount that exceeds 10% of the cost of the property.
Right of the Buyer in case of Defect after Possession
The builder is subject to rectify any defect with regards to structure, quality, workmanship or provision within 5 years after the possession of the property at no extra cost.
The buyer is entitled to compensation should the builder fail to rectify the defects.
Right to Information
The property buyer is entitled to know of all project related information, be it the plan layout, stage wise completion status, execution plan. No information that is relevant to the interests of the buyer may be hidden or termed as confidential under the RERA Act.
Applicability of RERA
RERA is applicable to all builders and developers, except:
Where the area of land proposed to be developed does not exceed 500 sq mts.
The number of apartments proposed to be developed does not exceed more than 8.
Where the promoter has received completion certificate before the introduction of RERA.
Along with the points mentioned above it is also important to note that, RERA is only applicable on development of property and not on renting of property and is applicable to all residential and commercial projects, including shops, offices and buildings.
So now that you’re well acquainted with the RERA Act, you may resume hunting for the perfect home or property without having to worry about the malpractices performed by a few builders. Also, it is imperative you do your research on the builder and their company’s reputation before you finalize on any project.
Happy home buying!