CREDAI Bhopal Vice Prez Nitin Agrawal lists 10 reasons why RERA poses a win-win situation
The RERA Act was implemented by the Government of India with the aim of protecting consumer interest and bringing efficiency and transparency into the country’s real estate sector. Ever since its implementation, the Act has been in the news for some or the other reason.
For the uninitiated, the RERA Act is being touted as pro-consumer law since it is aimed at addressing the grievances of property buyers who at times are cheated by developers in the form of delay in delivery of under-construction properties, execution of said project plans, legitimacy of properties, etc.
The Act had initially met with some resistance on part of realtors and builders, since their initial perception of it was rather skeptical. However, over the time, things have improved with respect to both the realtors as well as customers.
According to Nitin Agrawal, Vice President of CREDAI Bhopal, RERA will improve the governance on the real estate sector by reducing disputes and making the system more transparent and robust. “The setting up of a Regulatory Authority in each state will bring in increased accountability in markets,” he says.
- All real estate developers and promoters will register ongoing and upcoming real estate projects with RERA to ensure greater transparency.
- Home buyers will now have to pay just for carpet area.
- Developers and promoters will disclose project details beforehand, which includes project plan, layout, and government approvals related information to the customers such as sanctioned floor space index (FSI), number of floors in each building, number of buildings and wings, etc.
- Developers and promoters will also have to transfer 70% of the money received from buyers for particular project to an escrow account.
- The RERA Act includes projects that are ongoing on the date of commencement of the Act i.e. May 1, 2017, and for which the completion certificate has not been issued yet.
- Developers or promoters have to register their projects with RERA before advertising or marketing.
- In case of non-compliance with RERA, the Act 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 realty project, or both.
- If any customer is provided with false information, he/she penalty up to 5% of the estimated cost of the project.
- Developers and promoters have to update project details quarterly on the RERA website.
- Any structural defect, or any other obligations of the developer/promoter as per the agreement for sale, brought to the notice within five years from possession to be rectified free of cost.