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RERA Benefits for You as a Homebuyer

Take a look at some of the key ways in which RERA helps homebuyers:

1. Poor construction quality? Let the builder fix it

If you have been worried about the construction quality of projects these days, here’s a relief for you. As per RERA, if any structural defect occurs within 5 years from the date of possession, it will have to be fixed by the developer. The Act also states that such a defect will have to be fixed within 30 days of notice, without any charge. 

2. No more project delays due to diversion of funds

Before RERA, most developers were found defaulting on their project deadlines as they diverted the funds to start new projects. But, with RERA, the developers are now required to deposit 70% of the funds received from buyers in a separate account. This money can only be used for that particular project.

3. No more false promises by Builders

Under RERA, builders are now required to show their RERA registration number with their advertisements. They can not advertise anything that will not be delivered to the buyers. Additionally, if a builder wants to make a change to the original plan, they will have to seek the Buyers’ approval first.

4. No project to be sold until all clearances are obtainedAll the builders and agents are now required to register themselves with RERA. It is now mandatory for them to get all necessary clearances before they can promote the project for selling. This ensures protection of buyers from projects that get stuck later on for pending approvals.

5. Quick grievance redressal

If you have a complaint against a builder, promoter, agent, or contractor, you can file it with your respective authority for a quick redressal. RERA mandates builders to resolve these complaints within 120 days of filing. Also, the Act states that non-compliance with the regulations can lead to a penalty of upto 10% of the estimated project cost. Read: RERA Complaint Online Filing

6. Penalty for project delays

With RERA guidelines in place, if a builder delays the project, you can ask for your refund and withdraw from the project. Also, if you don’t want a refund, you will be entitled to an interest every month, starting from the due date.

7. Pay for the carpet area, not built-up area

RERA states that the value of a property is to be calculated on the basis of carpet area, instead of built-up area. Carpet area is the net usable floor area of a property. It excludes the area covered by walls, etc. This makes sure that you don’t have to pay an inflated price for the area that you are not even using.

Impact of RERA on Real Estate Agents

Real estate agents play a key role in the marketing of any project, acting as a bridge between the developers and the buyers. These agents are now required to comply with the guidelines of RERA – an Act introduced by the government in 2017 to bring transparency in the market. Let’s find out how this Act has impacted the property agents.

Why was RERA Introduced?
Indian real estate market was mostly an unregulated market until the Real Estate Regulation Authority (RERA) was introduced in May 2017. With the introduction of RERA, all the brokers and builders are required to register themselves with their state authorities, meaning they have to work within a framework of guidelines and rules. The Act was introduced with the aim of bringing transparency to the property market while protecting the interests of the buyers.

How RERA Affects Real Estate Agents
Here are some of the main impacts of this Act on the property agents:

1. Only registered agents can deal in registered properties
RERA has made it mandatory for all property agents to get a brokerage license from their respective state governments in order to deal in any real estate transaction. This means any broker who is not registered with RERA is no longer allowed to deal in a registered property. Also, the registration is not valid for lifetime; agents will have to keep renewing it as required by the Act.

2. Penalty for non-registration
The Act states that any unregistered broker, if found dealing in a registered property, will have to pay a penalty of Rs 10,000 per day for the entire period during which such default continues or a penalty of upto 5% of the value of the deal.

3. Maintaining books of records is now compulsory
The Act requires all the real estate brokers to create and maintain books of accounts, documents, and records as per the country’s Income Tax Act. Furthermore, such accounts must be maintained for every single real estate project that the broker deals in.

4. Registration number be displayed appropriately
RERA requires all the Agents to display their registration number at their place of business at all times. In addition, if they advertise or market any project, the advertisement should also carry their registration number.

5. No more false advertisements
The Act stresses on the need to maintain transparency in the dealings with buyers. Brokers, as well as builders, cannot promote or market a project that’s not in compliance with RERA. Any entity found mis-selling will be penalized.