April 10, 2019 at 8:18 am #1045
April 10, 2019 at 8:19 am #1047
The introduction of RERA in the modern era has brought a huge change in the real estate industry. Now the builders as well as the buyers need to follow a strict framework while buying a property – apartment, villa, flat, etc. However, RERA registration is not a tough task and registration can be easily done with the help of a RERA consultant.
Effects of RERA on the builders are as follows:
- Standardized carpet area is followed for the price.
- Rate of Interest on default (both for seller and the buyer) is the same.
- Reduces the risk of builder insolvency.
- Buyer protected in case of false promises.
- Any grievance against the builder can be taken to the state authority set up under the Act to redress all the grievances.
- Advance Payment can’t be more than 10%.
- Buyer protected in case of the defect after possession.
- Delay in Possession is not allowed.
- Right to information related to project.
April 10, 2019 at 8:21 am #1049
The following points will tell us about the effect of RERA on buyers and builders:
- All the ongoing and the upcoming real estate projects needs to be registered with RERA now, which needs to be done by the real estate developers/promoters on an urgent basis.
- Now, home buyers will have to pay only for carpet area.
- Developers/promoters can’t hide any project related details now. It means they need to disclose all the details such as project plan, layout, and government approvals related information to the customers such as sanctioned floor space index (FSI), number of buildings and wings, etc.
- 70% of the money received from buyers (for particular project) needs to be transferred to an escrow account by the developers/promoters. These funds should be used only to cover the cost of construction and land cost.
- Before advertising or marketing, developers have to register their projects with RERA.
- In case of non-compliance with the Act, RERA 2016 recommends imprisonment for a term which may extend up to three years, or fine which may extend up to 10% of the estimated cost of the real estate project, or both.
- Developer/promoter providing false information or contravening the provisions of registration of real estate projects has to pay penalty up to 5% of the estimated cost of the project.
- Developers/promoters have to update project details quarterly on the RERA website.