RERA Rules- RERA is real estate regulatory authority. The real estate sector in India is largely unregulated and involves a large amount of black money. Most of the time builders and developers take undue advantages from the buyers. To control the real estate sector a new rule of RERA was developed. RERA helps property buyers from fraud, delay in the project, loss of money due to project cancellation, loss in rights due to government approval, etc. In short, RERA helps customers in protecting their rights. This act imposes few tight regulations on real estate developers and agents. As per this act registration under RERA is mandatory for real estate agents before selling and marketing any property.
If you are planning to purchase a new property you should check a few things with respect or RERA act. To help you, I have prepared a RERA rules list. This list includes important points for property purchases.
Project Registration with RERA
The first rule is about project registration with RERA. It is compulsory to register with RERA for the real estate project with a land area greater than 500 square meters or 8 apartments before launch. This rule applies to residential as well as commercial projects.
You will be able to check registration detail on the RERA website of respective states. A project builder has to provide details such as sanction plan, project layout, project location, carpet area and facility provided while registering on the website.
Updates about Construction status
Developers and builders must update about construction status quarterly. The update should be on vital information such as –
- Approval taken by the government and pending list.
- Completion schedule update and status.
- Number of unit sold and types.
The above information is to keep the buyer updated about the progress of the project.
As per RERA rule, promoter or builder cannot demand advance payment greater than 10% of the estimated cost of a project. In case a higher amount is required as advance formal agreement with the buyer is required by the developer.
RERA rule says that it is mandatory for the developer or transfer 70% of the amount received from the customers to separate account called an escrow account. This amount can be used only after getting the approval of the project. This is to safeguard money given by the customer and assure that the amount can not be used for other projects.
Defect Liability Period
RERA says that liability of defect lies with developer or builder for the first 5 years. This means if any structural defect is detected due to the use of poor material, the developer has to either pay for the repair or compensate a similar amount to the customer.
Consequences of False Information
Any false information shown in the advertisement of the project leads to several issues for the developer. The buyer can ask for the full refund of the amount paid as advance to the developer or builder. After knowing false information also if the customer decides to purchase a property the builder needs to pay penalty up to 5% of the property cost.
As per RERA, it is mandatory to disclose clear Title of the property. Any conflict found in the property title cause penalty implication for the builder. Here no upper limit is defined for the penalty.
Penalty against failure of possession
RERA rule says that builder or developer needs to give possession of the property in a timely manner as per the commitment. In case builder fails to complete the project and give possession on time, the builder has to pay monthly interest on the amount received, till possession is given.
Change in Sanctioned Plan
Any alteration or change in the sanctioned plan can be done after getting approval from the customer. If alternation is affecting the entire project, the builder has to take approval from at least 2/3rd of the total buyers of the project.
In case of any complaints or grievances, the property buyer can file a complaint with RERA. The complaint needs to be filed at the respective RERA state website. In case the buyer is not satisfied with the resolution provided by RERA, they can approach the Appellate Tribunal and High court or Supreme Court.
Over to You –
I hope the information given about RERA rules will help you while buying a real estate property. If you have any queries about RERA rules please write to us.