[vc_row][vc_column width=”2/3″][vc_column_text]Knowledge is the most useful tool for the buyer as it helps him or her make a more informed decision during any sale. It also gives them a way to protect themselves if something illegal or unintended happens to your real estate investment. That is the reason you need to educate yourself on the benefits of the Real Estate Regulation and Development Act (RERA Act). You need to understand the benefits it offers you as a buyer.[/vc_column_text][vc_row_inner][vc_column_inner][vc_column_text]
[/vc_column_text][dt_vc_list dividers=”false”]
Need for the RERA act
- Need for the RERA act arose as the number of complaints increased from the buyers in the real estate industry. It got to a stage where people were scared of investing in real estate as they were not sure that they would be scammed.
- There was no transparency in the procedure of buying homes and this was often taken advantage of by the developers. Delayed handovers and demand for extra pay had become common.
- Houses were sold according to the super built-up area. Super built-up area is the area measurement of the house that includes the lobby, common areas and the width of the walls. This means that the area you pay for and the area you actually get to use is vastly different.
- You couldn’t complain if you were dissatisfied with the quality of work or equipment that was used. The entire procedure was in the developer’s control and you had no way to question if you had a problem with what was going on.
- Project delays were common. It was uncommon for a developer to hand over possession of the house on the pre-determined deadline. This would cause a lot of trouble to buyers as the loan duration would increase. Also, if the buyer had to move out of their current residence, the cost of temporary accommodation and shifting will be even higher.
- It is understandable that sometimes project delays are unavoidable. That said, as it is the builder’s responsibility to hand over the house on time. That is why he or she should provide compensation when there is a delay in the delivery timeline. That didn’t happen which meant that the extra cost of project delay must be taken care of by the buyer itself.
Payment delays from the buyer led to penalties. The buyer had to pay a penalty if the monthly installment of the buyer’s investment was delayed. This shows that the control was completely in the developers’ hands and the buyer had very little to say.
The most disturbing part of the real estate market before RERA was that the developers had complete control over the finances. The operated all the money that was invested in the project. Sometimes the money was siphoned from buyer accounts and then the projects were closed down. This would lead to a nightmare-like position for the buyer as he to go to great lengths to get his investment back.[/dt_vc_list][vc_column_text]
[/vc_column_text][dt_vc_list dividers=”false”]
How does the RERA act protect the buyer’s interests
The RERA act dictates rules that will help the buyer. It will help keep the developer in check so that there aren’t any malpractices during there interaction.
These rules include:
- All projects(even that ones that are under construction) MUST be registered with RERA. It needs to be done before the project is advertised and promoted if they are bigger than 500 sq meters or if it has 8 or more flats.
- Each phase of the project has to be registered as well if the project is take up in phases.
- If registration is not done, the penalty could be 10% of the project cost and if the offense is repeated, then it could lead to up to 3 years of imprisonment.
- It is mandatory for every state that is implementing the RERA act to have a State Regulatory Authority. It will be the place for the builders and developers to submit complaints about the builders too.
- The properties must be sold according to the carpet area and not according to the super-buildup area. Carpet area is the area that doesn’t include the lobby and the thickness of the walls.
- The builder can’t change the plans of the project without the consent of the buyer (if the house is bought before construction). This will reduce the chances of the builder increasing the price of the house later.
- If there are many buyers then the buyer needs the consent of two-thirds of the buyers before making changes to the initial plan. This is generally the case with
- The act also holds the builder responsible for the quality of work done. The builder handles any structural damage during the first year of the possession date.
- The builder has to stick to a predetermined timeline for the construction process. If there is a delay in the completion date, the builder has to pay the interest of the buyer until the completion of the project.
- 70% of the money that was invested in the project has to be placed in a neutral account and is to be used exclusively for the project. This will stop the siphoning of funds so the buyer will be a lot safer with this rule in place.
- The buyer NEEDS to take possession of the house within 2 months of the completion date.
- Developers have to mention the detailed plan for a project on the website of authority and they also have to keep updating it on a regular basis.
[/dt_vc_list][vc_column_text]
[/vc_column_text][dt_vc_list dividers=”false”]
Registering to RERA
If a developer claims to be registered to RERA, he or she needs to,
- submit his project related documents and pay the fee.
- receive a RERA registration number. This needs to be mentioned during advertising and sales.
- The record of expenditure needs to be maintained and verified every 3 months.
- share each and every detail regarding the sale to and provide a copy of the documents to the buyer.
- If any information is falsified, the agent will be suspended.
Outcomes of the RERA act
- Getting home loans have become a lot easier due to the RERA act. Even lenders are approving projects easily.
- The expenditure and the cash flow of the builder is a lot more accountable and trackable.
- The State Regulatory Authority keeps things in check between the buyer and the builder. This way all parties that are involved are answerable to a government authority.
- Project disputes are solved with greater ease.
[/dt_vc_list][vc_column_text]
[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_column_text]
MUPPA means trust
Muppa is a prominent real estate developer in Hyderabad that has built a reputation of trust and reliability. For instance, take the example of Muppas Indraprastha as a reference. RERA registration Number: P01100000141. It shows our fine workmanship and quality building. Don’t take our word for it. Come, see for yourself, talk to the residents and you will understand that we offer excellence and nothing less.
Conclusion
You are equipped with the knowledge needed to buy a home as an empowered buyer. Understand the power you have and use it to its fullest extent. If possible, educate others about this law. It will help spread awareness about the laws and no one falls victim to any wrong practices while buying a home.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_column_text el_class=”post-contact-form”][fc id=’2′ align=’center’][/fc][/vc_column_text][/vc_column][/vc_row]