Decoding RERA: What Every Buyer and Seller Should Know

The Real Estate (Regulation and Development) Act, 2016, popularly known as RERA, was enacted to bring transparency, accountability, and efficiency to the Indian real estate sector. Whether you are a buyer or a seller, understanding RERA’s guidelines can empower you to make informed decisions. Here’s a simplified breakdown of what RERA is and how it affects you.

What is RERA?

RERA is a regulatory framework designed to:

• Protect the interests of homebuyers.
• Promote transparency in real estate transactions.
• Standardize practices in the real estate industry.
• Reduce project delays and ensure timely delivery.

The act applies to both residential and commercial real estate projects across India, with each state having its own RERA authority.

Key Features of RERA

1. Mandatory Registration
   • Developers must register their projects with the state RERA authority before advertising, selling, or booking.
   • Projects over 500 square meters or involving more than 8 units require registration.
   • Buyers can verify project details on the official RERA website.
2. Transparency in Project Details
   • Developers must disclose important project details, including layout plans, approvals, land title status, and completion timelines.
   • Changes in project plans cannot be made without the consent of two-thirds of the buyers.
3. Escrow Account for Funds
   • Developers must deposit 70% of the project’s funds into a separate escrow account.
   • This ensures the money is used only for the project’s construction and land costs, reducing chances of diversion.
4. Timely Delivery
   • RERA imposes strict deadlines for project completion.
   • Developers face penalties if they fail to deliver the project on time.
5. Standardized Sale Agreements
   • The act mandates fair and standardized sale agreements to protect buyers from one-sided clauses.
6. Grievance Redressal
   • Buyers and sellers can approach the state RERA authority or Appellate Tribunal for dispute resolution.
   • Complaints are addressed within a specific timeframe.

Implications for Buyers

• Informed Decision-Making: Buyers can access detailed project information on the RERA website, ensuring transparency.
• Timely Possession: Strict timelines reduce the risk of project delays.
• Financial Security: The escrow mechanism safeguards buyers’ investments.
• Legal Recourse: Buyers have a dedicated platform to address grievances effectively.

Implications for Sellers (Developers)

• Compliance Requirements: Developers must adhere to RERA’s stringent guidelines, ensuring ethical practices.
• Accountability: Delays or non-compliance can lead to penalties or legal action.
• Credibility Boost: RERA registration enhances trust and attracts more buyers.

How to Check RERA Compliance?

1. Visit your state’s RERA website.
2. Search for the project or developer using the registration number.
3. Review details such as project status, approvals, and timelines.

Conclusion

RERA has transformed the real estate sector by creating a buyer-centric environment and encouraging developers to maintain high standards. As a buyer, always verify a project’s RERA registration before investing. For developers, adhering to RERA not only ensures compliance but also builds credibility in a competitive market.

Understanding RERA guidelines empowers both buyers and sellers, fostering trust and transparency in real estate transactions. Stay informed, stay secure!