RERA Explained: The Ultimate Shield for Every Homebuyer
Let’s be honest for a second—buying
a home in India used to be a scary experience.
A decade ago, you would hand over
your hard-earned money to a builder, and then… you waited. And waited. Sometimes
the project got delayed by years. Sometimes the "Swimming Pool"
promised in the brochure turned out to be a small water tank. And sometimes,
the builder just vanished.
It was the Wild West out there. But
then, in 2016, everything changed. The Government of India introduced a
game-changer called RERA.
If you are planning to buy a
property, or if you are stuck in a stalled project, understanding Real Estate
Law—specifically RERA—is not just "good to know," it is absolutely
necessary.
So, grab a cup of chai, and let’s
break down what RERA is and how it protects you, in simple English.
What
is RERA?
RERA stands for the Real Estate (Regulation and Development)
Act, 2016.
Think of RERA as the
"Umpire" or the "Referee" in the game of Real Estate.
Before 2016, the builders held all the cards. They decided the rules, they
decided the timelines, and they decided the penalties (which were usually zero
for them).
RERA was created to level the
playing field. Its main goal is to protect the interests of homebuyers and to
boost investments in the real estate sector by bringing in transparency. It
ensures that builders and developers play by the rules. If they don’t, RERA has
the power to fine them or even put them behind bars.
How
RERA Protects You (The Homebuyer)
The biggest fear for any homebuyer
is: "What if the builder runs away with my money?" or "What
if they don't give me the flat on time?"
Here is how RERA acts as your
bodyguard:
1.
No More "Super Built-up" Scams
Before RERA, builders used to sell apartments
based on "Super Built-up Area." This included the lobby, the lift,
the stairs, and sometimes even the watchman’s cabin! You paid for 1500 sq. ft.
but when you walked inside, your house looked like 1000 sq. ft.
RERA Rule: Builders must quote the price based on Carpet Area
only. Carpet area is the actual area within the four walls of the apartment
where you can lay a carpet. This ensures you pay only for what you use.
2.
The 70% Rule (Escrow Account)
This is a masterstroke. Earlier,
builders would take money from "Project A" and use it to buy land for
"Project B." If Project B failed, Project A would get stuck.
RERA Rule: Builders must deposit 70% of the money collected
from buyers into a separate bank account (Escrow Account). This money can ONLY
be used for the construction of that specific project. This prevents
funds from being diverted and ensures the building gets completed.
3.
Protection Against False Advertising
Remember those glossy brochures
showing a Disneyland-like park and Italian marble flooring, but the reality was
totally different?
RERA Rule: If a builder promises something in the advertisement or
prospectus, they must deliver it. If there is a mismatch between what
was shown and what is given, you have the right to claim a full refund with
interest.
Your
Rights Under RERA
As a buyer, RERA gives you
superpowers that you didn't have before. Here are your core rights:
- Right to Information:
You have the right to know every detail about the project—the layout plan,
the execution schedule, and the completion status. The builder cannot hide
anything.
- Right to Possession:
You have the right to get your home on the date mentioned in the agreement.
- Right to Refund:
If the builder fails to complete the project, you have the right to get
your entire money back with interest.
- Right to Defect Correction: This is huge. If you find any structural defect
or poor quality workmanship within 5 years of getting possession,
the builder has to fix it free of cost within 30 days.
Rules
Builders Should Follow
To operate in India today, builders
have to follow a strict diet of rules. They cannot just do whatever they want
anymore.
- Mandatory Registration: No builder can advertise, sell, or book any plot or
apartment without registering the project with the state RERA authority.
If a project doesn't have an RERA Registration Number, do not buy it.
- Website Disclosures:
Builders must upload all project details on the RERA website. This
includes the number of flats, the carpet area, and even the names of the
real estate agents working for them.
- Taking Advance Payment: A builder cannot accept more than 10% of the cost
of the property as an advance or application fee without signing a
registered "Agreement for Sale" with you.
- Title Representation:
The builder must have a clear legal title to the land. If there is a legal
dispute on the land later, the builder is liable to compensate you.
The
Benefits of RERA for You
So, why should you be happy about
RERA?
- Timely Delivery:
Builders are now terrified of delays because they have to pay heavy
interest to buyers for every month of delay.
- Standardized Agreements: Earlier, sale agreements were biased. They would say, "If
I delay, I pay Rs 5/sq ft. If you delay payment, you pay 18%
interest." RERA standardized this. Now, the interest rate is the
same for both parties.
- Grievance Redressal:
If you have a complaint, you don’t have to go to civil court and fight for
20 years. You can file a complaint with your state’s RERA authority. They
are designed to resolve disputes quickly (usually within 60 days).
Be Smart, Check the RERA ID
Real Estate Law in India has come a
long way. RERA has brought much-needed discipline to the market. However, the
law only protects you if you are aware of it.
Before you sign that cheque or
transfer that booking amount, always ask one question: "What is the
RERA Registration Number?"
Go to your state’s RERA website,
type in that number, and check the details yourself. It takes five minutes, but
it can save you a lifetime of stress.
Happy House Hunting! Click Homes
 Act){kind=link}
1 Comments
Very informative♥️
ReplyDelete