The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, was introduced to regulate the real estate sector and protect homebuyers from fraud and delays. This landmark legislation ensures transparency, accountability, and efficiency in the real estate industry.
In this blog, we will explore the key provisions of RERA, homebuyers’ rights, developer obligations, and how this Act benefits property buyers in India.
What is RERA?
RERA was enacted by the Government of India in 2016 to address the growing concerns of homebuyers regarding delayed projects, misleading advertisements, and unfair practices by developers.
Objectives of RERA:
- Ensure transparency in the real estate sector.
- Protect homebuyers from delays and fraud.
- Regulate builders and developers to ensure project completion.
- Establish RERA authorities in every state.
- Provide a dispute resolution mechanism for buyers and developers.
Key Provisions of RERA
1. Mandatory Registration of Projects
- Every real estate project larger than 500 square meters or more than 8 apartments must be registered under RERA.
- Builders must disclose project details, approvals, and timelines.
- Without RERA registration, developers cannot advertise or sell properties.
2. Protection Against Project Delays
- Builders must complete projects within the promised deadline.
- If delayed, they must compensate homebuyers at the same interest rate they charge for late payments.
3. Transparency in Project Details
- Developers must provide accurate information on carpet area, completion date, approvals, and amenities.
- Any changes in plans require buyer consent.
4. Establishment of RERA Authorities
- Each state has a Real Estate Regulatory Authority (RERA) to monitor projects.
- Buyers can file complaints against builders for any violations.
5. Escrow Account for Builders
- Developers must deposit 70% of project funds in a separate escrow account.
- This ensures that the money is used only for the intended project.
6. Protection Against False Advertisements
- Builders cannot provide misleading advertisements or false promises.
- Homebuyers can seek a full refund with interest if misled.
7. Fast-Track Dispute Resolution
- RERA authorities resolve buyer-developer disputes within 60 days.
- Appellate tribunals ensure speedy justice for homebuyers.
Rights of Homebuyers Under RERA
RERA empowers homebuyers with multiple rights to ensure fair transactions and timely project completion.
1. Right to Information
- Buyers can access project details like layout plans, approvals, and agreements.
- Developers must update progress reports regularly on the RERA website.
2. Right to Timely Possession
- If a developer fails to deliver on time, homebuyers can claim compensation or a refund.
3. Right to Fair Pricing
- Builders must sell apartments based on carpet area, not super built-up area.
4. Right to File Complaints
- Buyers can file complaints with the RERA authority for violations.
- They can also approach the Real Estate Appellate Tribunal if unsatisfied with the verdict.
5. Right to Compensation
- If a builder misleads a buyer or fails to deliver as promised, they must refund the amount with interest.
How RERA Benefits Homebuyers
✅ Increased Transparency: Buyers get authentic information about projects before investing.
✅ Reduced Risk: Builders cannot misuse funds, ensuring timely delivery.
✅ Faster Dispute Resolution: Legal issues are resolved within 60 days.
✅ No More Misleading Advertisements: Buyers can trust what they see in ads.
✅ More Buyer Confidence: A well-regulated real estate sector attracts more investments.
Challenges in Implementing RERA
Despite its benefits, some challenges remain:
- State-Level Variations: Each state has different RERA rules, causing inconsistencies.
- Delayed Implementation: Some states have been slow in setting up RERA authorities.
- Limited Awareness: Many homebuyers do not know their rights under RERA.
Conclusion
The Real Estate (Regulation and Development) Act (RERA), 2016 is a game-changer in India’s real estate sector. It has transformed property buying by ensuring transparency, accountability, and fair practices. However, full implementation and awareness are crucial for homebuyers to fully benefit from RERA.
If you’re planning to buy a property, always check if the project is RERA-registered and be aware of your rights!