The Real Estate Regularity Authority (RERA)

Introduction

• To protect the interest of the consumers.
• To bring efficiency and transparency to real estate development.

Why was it Introduced(Problem)

• Delay in Construction time
• With low transparency, the probability of brokers/developers scamming the buyers were more.
• There was low trust and transparency between the buyer and the seller.

Eco-System

• The construction time of your building will keep on getting increased
• If the other property which they have invested with your hard-earned money goes into litigation or problem, the building you have bought will be further delayed, or worse the builder might declare insolvency.
• All this would happen without your knowledge, Buyers won’t even know who is the builder, or whether all the documents have been approved or not by the government, due to the lack of transparency in the real estate market.
• Buyers were not able to complain about the problems they faced.
• Most buyers take a bank loan to buy the apartment, believing it’s more affordable than a fully constructed building and appreciates its value in the future, when a problem like this occurs they have to face the consequences, the worst part is they still have to pay the bank loan, even if the apartment has stopped the construction.
• Buyers approached the court to resolve their issues, but due to the vast number of existing cases makes it a tedious legal process and caused long delays in resolving Buyer issues apart from the time and cost.
• In certain situations, the property consultant also face scrutiny, without his mistake.
• Due to all these problems, there has been low trust in the Real Estate market, resulting to the buyer suffering the brunt in the end.

How Rera is impacting the eco-system

• Improving Transparency: Under Rera Act, every builder has to give the following info about the property: Building info: To know about the information visit the “Rera website”, and search for the project name will get the list of information such as:

  • Project Builder, their past projects, Status of the building, Approved Date, Date of the project completion, Complaints/Litigation of the property.
• Property consultant: Every property consultant who wants to sell a property has to register through RERA like brokers in the stock market.
• Documents Approved by the government and other important things. If a builder has a project exceeding 500sq meters they must be registered in the RERA. If not, they must pay 10% of the total project cost as a fine.

Impact on buyers

• Advance payment: According to the RERA Act builders can’t ask for more than 10% of the building amount as an advance.
• Defect after possession: If a builder has constructed the building poorly, they must rectify it within 5 years from handover.
• Construction on time: If a builder is unable to finish the building on the projected time, they will be charged with a fine.
• Legal filing: If a builder has not constructed the building according to the Standard deviation/Proposed Promise the buyer can complain about it through RERA and the problem is sorted sooner also know the number of cases the builder is currently facing in court.

Conclusion