What is RERA or Real Estate Regulatory Authority Act? | Propira

What is RERA or Real Estate Regulatory Authority Act? | Propira

What is Real Estate Regulatory Authority(RERA) Act & Its Benefits?

The RERA stands for Real Estate Regulatory Authority. This act was passed by the Indian government in March 2016 in order to guarantee that real estate transactions are efficient and transparent. The RERA Act safeguards the rights of builders, homebuyers, real estate agents, and other real estate sector players.

RERA has provided the Indian real estate business with its first regulator, thanks to its numerous changes. Understanding RERA's laws and guidelines, which are required in every state and union territory, can assist you to navigate the otherwise confusing real estate market.

What is RERA?

All ongoing projects that are under construction that do not have a completion certificate must register with the authority under the terms of the Act. No developer or promoter may book, market, sell, or offer to sell property in a real estate project without first registering it with the Real Estate Regulatory Authority, according to Section 3 of the Act.

Importance of Real Estate Regulatory Authority (RERA)

RERA ensures the sale of a plot, building, or apartment, as well as the sale of any other real estate project, through far more transparent and efficient commercial transactions. RERA also serves as an adjudicating tool for quick conflict resolution and assists in the establishment of the Appellate Tribunal. It is required to hear appeals from the Real Estate Regulatory Authority's judgments, instructions, or decrees. RERA, in brief, protects the interest of the consumers in the real estate industry.

RERA also assures that transactions between buyers and sellers of houses in the main market are fair and equitable, making the home-buying process considerably easier. In a word, the RERA promotes openness in the real estate industry and works to eliminate current inconsistencies and inefficiencies.

Projects that are Being Considered for RERA

RERA will apply to all real estate developments after all states and union territories have adhered to it. When a project is subject to RERA, however, the following criteria must be met:

• RERA applies to projects that were finished prior to the RERA Act's adoption but do not have a completion certificate.
• The RERA Act does not apply to projects that are undergoing rehabilitation, repair, or redevelopment and are not re-assigning, promoting advertising, selling, or allocating any flats, plots, or buildings.
• Construction projects, on the other hand, must keep a report on each step of construction as a separate project through a new RERA registration.

Advantages Offered by Real Estate Regulation Authority (RERA)

The buyer, the developer, and the industry as a whole benefit from the Real Estate Regulation Authority. The RERA statute seeks to safeguard the interests of purchasers and developers, as well as consumers and sellers because the laws apply to both domestic and commercial buildings. Let's look at what they are in more detail—

Benefits to the Buyers

• Builders are required to publish every element of their project on RERA's official website under RERA. They must also keep the material on the website up to date on a regular basis. This also gives purchasers more information about project schedules.
• Under RERA standards, buyers pay for the building depending on the carpet area or the space contained by walls. As a result, builders are unable to charge homeowners for the extra built-up space, which includes balconies, elevators, stairwells, and lobbies.
• Builders must deposit 70% of the homebuyer's funds into a separate account that is exclusively utilized for construction. Buyers may be certain that their funds are safe and that their use is transparent.
• Builders are prohibited by RERA from taking more than 10% of the project's cost as a deposit or application fee from the buyer.
• RERA ensures that projects are finished on schedule. Developers must pay purchasers 2% interest above SBI's MCLR if a project is delayed.
• Homebuyers have up to five years after receiving a handover to notice construction flaws and ask developers to correct them. Developers must settle filed issues within 120 days under RERA.
• The builder or developer cannot make changes to the design requirements without alerting two-thirds of the owners unless a majority of the homebuyers agree.
• The Act forbids developers from demanding more than 10% of a home's purchase price as a deposit.
• Homebuyers who find a mismatch in the title deed after taking ownership are entitled to reimbursement from the developer.

Benefits to the Developer

• Due to the requirement of state registration, RERA has resulted in a consolidation of the industry.
• It has increased real estate developers' confidence in investing in projects, resulting in increased investment.
• Developers have benefited from the sector's coordinated funding.
• RERA has made corporate branding viable, and developers have gained greatly as a result.
• RERA's model code, which attempts to establish more equitable and fair dealings between the buyers and sellers, has a limited scope of the lawsuit.
• All developers and buyers will be bound by a single model selling agreement, ensuring greater consistency.

Benefits to the Industry

RERA guarantees that real estate transactions are run efficiently and transparently. RERA's requirement that builders and developers register before starting a project has resulted in a significant reduction in project delays and misspellings, as well as more reliable project delivery and efficiency.

In India's real estate business, the RERA Act has increased accountability, consistency, quality, and standards. The RERA Act has aided the property market in attracting more investments and private equity money. 

RERA has aided in the preservation of a controlled environment since its creation. Every state's RERA is split into numerous smaller regulatory organizations responsible for the growth of the real estate sector in that state or union territory; this guarantees better openness and facilitates commercial transactions in the industry.

What is the Procedure for Registering with RERA?

Realtors and builders can register with RERA through their local states' RERA portals. They might register under the name of an individual or an entity. For registration, you must provide all of the required documentation.

States that have Enacted RERA

Under RERA, every state and union territory is required to have its own regulator. Realtor developers are not permitted to promote their existing or planned projects until they have enrolled with the permanent or interim regulator in their respective states, according to RERA. Since its inception, the RERA legislation has been followed by more than 22 Indian states and six union territories to resolve complaints and disputes arising from the state's real estate sector.

A homeowner should pick a RERA-registered project to guarantee that their money is in good hands. The Real Estate Regulation Authority safeguards homebuyers' and investors' interests while also improving the organization and transparency of the real estate sector.

So this is all about Real Estate Regulatory Authority Act (RERA). At Propira, we always try to aware property buyers & sellers about the new updates in the real estate industry. If you have any questions related to RERA, you can contact us. We will try our best to clear all your doubts related to Real Estate Regulatory Authority Act (RERA) and help you understand it in a better way.