Key Points from Real Estate Regulation Act (RERA)
Real Estate Regulation Act (RERA) Rules came into effect from 1st May, 2017. This is good news for home buyers who have been cheated by real estate developers and agents. RERA Rules would help to protect Home Buyers and provide Transparency between buyers, real estate developers and agents. What does these New Rules from RERA talk about? How does such Real Estate Regular Act Rules help to boost real estate sector? Which are those points buyers should know from these new Real Estate Regular Act Rules 2017?
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What is Real Estate Regulation Act (RERA)?
Real Estate Regulation Act was formulated by Govt. of India in the aim to keep transparency between buyers and real estate developers and agents. Many developers have been cheating in several ways to buyer and none of the current real estate rules are helping the buyers. These new rules would come into effect from 1st May, 2017. These new rules would help buyers in several ways. However, buyer needs to understand about these rules and the precautions he need to make while buying the projects.
12 Key Points from Real Estate Regulation Act (RERA)
1) These new rules are formulated by Govt. of India as model law, however given flexibility to States to modify / add their own rules. Since the land belongs to State, this flexibility is given to the States.
2) Currently 6 states have formulated the law including Gujarat, Odisha, Andhra Pradesh, Madhya Pradesh, Uttar Pradesh and Bihar. Means these states are ready to go with the new rules. Other state would be joining this law very soon.
3) RERA protects buyers in the real estate projects. They are the king now.
4) As per Real Estate Regulation Act, real estate developers and agents need to register with State Real Estate Regulatory Authority by 30th July. They would then come under the purview of RERA act. When you buy a property consider checking this aspect so that you are protected from now on.
5) As per RERA, Real Estate Developer need to deposit 70% of the funds collected from buyers in separate bank account created for the projects. They need to use these funds only for the construction of the projects to see timely completion of the projects. Any deviation in this would attract penalty including imprisonment.
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6) New Projects should obtain all approvals before the launch of the project. Currently buyers are cheated saying all approvals are in “closure” stage, then later on saying there is delay in getting approvals and delaying in the project. Any false statement regarding this would attract penalty including imprisonment.
7) In case, real estate developer wants to make any structural changes after the start of the project, it needs to take 2/3rd of the buyers consent. Without such consent, no structural changes can be made.
8) Real Estate Developer would be penalized including imprisonment upto 3 years in case of any delay in the projects or incase he makes any change to what has been promised in the project.
9) Real Estate Developer should provide all project details on Real Estate Regulator website and provide regular updates on construction progress.
10) Should rectify the defects bought buy buyer to the notice by the promoter within 5 years from the date of the possession.
11) In case of delay in the possession from developer side, they need to pay 2% interest above SBI Lending rate to the buyer.
12) As per RERA guidelines, developer should sell the projects only based on carpet area where buyer can use. In case of defaulter they would be imprisoned for 3 years.
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Experts believe that these Real Estate Regulation (RERA) Rules would bring more transparency between buyers, developers and real estate agents. Since real estate sector contributes 9% to gross domestic product to India’s growth, this would definitely boost investments in Real Estate Sector.
Readers, do you believe that these real estate regulation rules would help home buyers? What are your views on this?
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Suresh
Key Points from Real Estate Regulation Act (RERA)
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29 comments
Add a comment ↓If the promoter( landlord or investor) or builder does not Agree to the RERA clauses to be put in agreement for sale even though the project is RERA approved, what can be done in such situation? Are we as buyers still eligible with all RERA rights even though the clauses are not part of Agreement of sale or sale deed?
Hi ,
I have a few questions and experience to share.
1). If the promoter( landlord or investor) or builder does not Agree to the RERA clauses to be put in agreement for sale even though the project is RERA approved, what can be done in such situation? Are we as buyers still eligible with all RERA rights even though the clauses are not part of Agreement of sale or sale deed?
2). When we approach to some promoter or builder, they insist on cash payments and term it as legal by registering the property at a lower cost than the actual sale consideration. Even though the subregistrar is aware of this, they still don’t question the buyer and seller. What action can be taken according to RERA ? If we disagree for such transaction, they deny the property to us. What provision we have to deal with such cases? Strange part is it’s such a deep rooted problem in our society, people say property dealings are not possible without black money.
3). Where do we get to see registered real estate agents? We still see many brokers and agents are still marketing without being registered under RERA. What can be done if the agent is not revealing their RERA Registration number? Where in RERA, can we raise our voice if they are misbehaving or threatening us?
4). What precaution should we as buyers take while giving token money? Some times it’s so fast that we can’t go for a bond paper deal for token money. Bond paper is scarce now in our city as well. Promoter and builder take advantage of that and deny the property later on after the token money is paid and many times we have to run after them to get that back. In my case the dealers threatened me of not giving my money back. They did not turn up for agreement and blamed me for delay in further payments and missed date of agreement of sale.
5). What RERA can do if we see a Nexus of bankers, promoters and builders or any other powerful set of people who dominate and bully over the rights of a common buyer. Can we give an anonymous complaint? Anonymous because it’s not only a risk to a single person but the entire family.
6). People in the real estate field get away with black money transactions day in day out and forcing common genuine buyers to do the same. What can RERA do to control this menace and can this be investigated from your side upon complaint? I as a common buyer might not be able to give you credible evidence as we don’t intend to gather evidence like this during our purchase but we come across these demands of cash transaction.
7). What are the clauses for TDS? Is it applicable for property with a work order ? For example, if the total sale consideration is 80 lakhs, work order is generated for 40 lakhs and the sale deed is executed at 40 lakhs.
8). Some promoters and builder mention the date of completion to the maximum limit in the RERA links but they don’t need that much time line to complete the project. Is there any way RERA can audit such information as per their other documents that they share with Muncipal corporation, Development Authority, Banks etc.
9). What can we as buyers if we don’t get enough transparency in getting all the information from the promoters or builders.
10). Many a times even with construction linked payments, the builder constructs to an extent(example until slab work) where they can gain the maximum lump sum and the buyer keeps on paying interest until possession and it’s clear that the other part of construction goes very slowly where the money disbursement is low in that phase of construction.
Is There any Rules in RERA Regarding Ready Possession Property ? , i want to know about Quality assurance of property.
The deposition of 70% amount in a separate account n be used only for construction purpose would safeguard the buyers. However, there wouldn’t be a free play which may hinder the progress of the real estate. Tera has come as a boon to the gullible buyers indeed. Notwithstanding that, the business would go in the hands of a few cashrich players like corporates and they would then dominate the market thereby making the housing and commercial projects costlier.
Great Contents…Thanks
RERA will make things more worse. Once all the builders and agents registers to RERA, real estate prices will get higher and consumer will suffer. Only people who will get profit out of it will be govt. employees of RERA. Builders won’t be affected that much. They will still still delay their project, provide false information and so on. They will just pay some bribe to the RERA.
Thanks Reptos for your frank opinion
Means there should be no act to control the real estate sector.
In RERA not make any provision for the project quality. Most of the real estate developers not maintaining any quality test records on the material used in project. Most of the developers neither having any testing laboratory at construction site nor keeping any qualified Quality Control Engineer at site.
absolutely fair point.
Right even they will tell u can cancell ur booking if u dont trust a d they r even not providing structural drawing to check so what to do for them
Hello,
I book 2-1/2 Bhk flat in Dec. 2016 in pune, Amanora gateway tower project in 25:75 scheme and I paid 25% amount to builder but scheme say I need to do registration for property after paying 25% amount or otherwise if I not done registration for flat I need to pay 10 laks penalty for withdraw from my booking and I signed this penalty paper with Builder.
Could you please advise as per RERA rule what I need to do because I am leaving in gulf country and currently no job security and I can’t pay 75% balance amount and I want to withdraw my booking how many % penalty I need to pay builder.
Regards,
Tony
Read the Sale Agreement and check it with a legal advisor. Generally, if they have applied for Completion certificate, you cant do nothing.
I booked a flat in August 2011. 95% payments have been made. The project is still incomplete. Developer demanding 18% interest on late payment.According to agreement,the developer has to pay penalty @ 5₹ per square feet per month after 30 months. Developer yet not paid any money to buyer . How much percent of interest developer will pay on penalty to buyer ?
Builder not possession flat more then 97 percent money given what remedy available.
I have a question.
If a building doesn’t have OC. And It is an old project without OC,CC . And OC is in Process So, This law can be take place in this case. Or Not.
Hi.. It does't come under RERA act until unless he has obtain CC for the project as on date and if CC is issued before RERA act builder is enrolled with ACT….!
In theory the act sounds good. But what about the implementation part? Is there any standard which says that all the clauses need to be mentioned in the agreement?
For example- lets say there is a delay in possession from the developer. And if there is no clause mentioned in the agreement about the terms of penalties in case of delayed possession. Then can the buyer make claim for the penalty from the developer?
The builder buyer agreement is also a part of the act
Why Builders are charging VAT & Services tax after completion of Occupation certification. Please cover this point in RERA and what will be future action .
What about the older projects which are yet to be completed
The more process driven the real estate sector,the better it is for the country
Dear sir/ madam
This new RERA is effecting 01 May means all projects launched after said date, but what about the old projects since 2011 which is not completed till to date.
People who have suffered or suffering which rules will followed and who will guide me to approach to an appropriate authority.
Nice
Sir,sell/buy pricing to be on carpet area is applicable for resale flats too?will buyer get benifit if getting resale/old flat at carpet rate price?
IS THIS ACT APPLICABLE ON THE PROJECTS WHICH ARE STARTED IN 2014-15. IF YES PLEASE CONFIRM
Useful
Nice
Hi there,
Nice article ..keep up the good work !!
Currently buyers pay on build up area is it ?
Lets say buyer books a property with X developer and 2 bhk size is 1000 sqft and we as a buyer pay for complete 1000 sqft but actual covered area is arnd 80% depending on city we are buying in
So from now are we going to pay only fot 80% i.e covered area ?