12 Key Points from Real Estate Regulation Act (RERA)

  • 4 years ago
  • RERA
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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.

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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