Purchasing a home is everyone's dream. However, not everyone can buy a home because real estate prices remain relatively high in comparison to income levels.
To make matters worse, each developer/builder before had his or her own set of standards, and there were no industry-wide standards. Every builder used a separate set of procedures and framed the builder-buyer agreement in a way that favored the builder.
The average person who used their life savings to buy real estate had very few rights. To protect and safeguard the interests of home buyers and to ensure that they are not exploited by developers/builders, the government enacted the RERA (Real Estate Regulation Authority) Act.
The RERA Act was enacted in 2016 to defend and safeguard the rights of the average citizen who invests his life savings in purchasing a home. RERA defines particular standards for establishing and developing real estate, which will improve transparency in real estate transactions.
It has given home buyers certain rights and has also set specific norms and regulations that all builders/developers must obey. It also calls for the establishment of an Appellate Tribunal in each state to investigate and resolve home buyer grievances.
The carpet area is the actual usable space that will be carpeted, or the apartment area minus the thickness of the inner walls.
Prior to the Rera Act, builders used their own technique or computation for calculating the carpet area of a flat/property. RERA, on the other hand, has regulated or standardized how a builder estimates carpet area. As a result of the RERA, a builder must now disclose how much carpet area they are providing as a result.
The carpet area currently determines the price of a home in India. This act has an immediate impact on the price a builder charges for a piece of real estate. A builder uses the following formula to estimate the cost of a home:
Cost Of Property = Carpet Area x Rate Per Square Fit.
One of the most essential benefits of the RERA laws for house buyers is the right to the property information.
As a house buyer, you must be well informed on the property you are purchasing. When making future decisions, a home buyer might benefit greatly from this type of knowledge.
The Developer or Builder has the authority to provide all project information, such as the layout plan, execution plan, construction stages, completion status, and so on.
In the event of a buyer defaulting in payment or a builder defaulting on project completion, both parties will pay the same rate of interest.
Previously, if the builder delayed possession of the property, the interest paid by the builder to the home buyer was lower, and if the buyer failed, the interest was substantially higher. Now after RERA, the interest to be paid by both sides is equal.
A developer typically has numerous projects under construction at the same time. Previously, builders were permitted to move cash generated from Project A to Project B's building. This would no longer be possible following the implementation of RERA.
The builder is required to deposit 70% of the project's funds in a separate bank account. He may withdraw funds from such an account only upon completion of the project, as certified by a civil engineer, architect, and a CA in practice.
RERA will ensure that funds gathered for a project are used for the same project, reducing the likelihood of bankruptcy. It will also ensure that the money is used correctly and that the property is completed on time.
If there is a mismatch between the builder's commitments and the actual project, the customer has the right to withdraw from the project, in which case he is entitled to a full return of the sum paid as advance or otherwise, as well as interest and compensation.
Before entering into a sale agreement, the builder may accept no more than 10% of the cost of the apartment, villa, etc. as an advance or application fee.
If a fault is identified within 5 years, the builder must repair it free of charge. The defect could be structural or it could be a flaw in the workmanship, quality, offering, or service. Within 30 days, the builder will correct all such flaws at no extra charge. If the builder fails to do so, the buyer has the right to seek compensation.
If the builder fails to finish the project by the deadline, the customer has two options:
Even after taking ownership of the property, the buyer's rights remain protected. If the buyer discovers a flaw in the property's title, he or she may seek reimbursement from the builder. There is no time limit for the buyer to report the fault.
If the buyer is dissatisfied with the construction or has an issue with the apartment, he or she has the right under the RERA Act to submit a complaint with the Appellate Tribunal.
Your case will be heard by the Tribunal within 60 days after receiving the Grievance case files. Furthermore, if the Tribunal is unable to settle the difficulties, it is required to explain why.