Ever since the grant of infrastructure status to affordable housing during the budget 2017, the government has passed yet another rule for the real estate sector. The Real Estate Regulatory Act (RERA) which will come into effect on 1 May 2017. If you’re looking to buy a new home, then we suggest you to hold your horses till 1 May 2017. The reason is government has notified all the states to adopt Real Estate Regulator Act (RERA), which will benefit the interest of home buyers.
In fact, the act is said to bring transparency, improve liquidity, reduce capital and lead to significant re-rating, according to a report by HDFC Securities.
Here are some of the benefits home buyers can derive from RERA:
Complete confidence while investing:
To ensure that home buyers, invest in home with confidence the act has mandated all developers to provide information regarding completion of a project, facilities and whether they are meeting the quality standards.
Eschrow account provision:
The new law states that 70% of the money acquired from buyers must be used by developers to meet construction cost of project. This will lessen the chances of diversion of money. There have been cases were developers use the money to finance their new projects. The new regulation ensures transparency in housing transactions.
Speedy redressal of disputes:
In case there are any disputes, home buyers can directly raise their concerns to RERA. The regulatory tribunals have to address the issue within 60 days without extending it beyond the required days.
Limit on the receipt of advance payment:
When it comes to advance payment for booking a home, developers are requires to accept a sum of not more than 10% of the cost of apartment, plot or building.
Sale on carpet area:
Under the RERA act, the sale of a property will now based on a carpet area rather than super-built-up area. A carpet area is basically a net usable area of apartment, which does not take into consideration open terrace area, exclusive balcony, external walls and areas under service shafts.
The act is aid to stabilize housing prices, therefore boosting domestic and foreign investment in the real estate sector.
Refund & Alteration:
The RERA Act also mandates that home buyers have the right to seek a refund in case there is delay in possession of an apartment. Developers cannot make any changes to any structural design, or specification without taking the permission from home buyers.
Now the concern for developers is whether completion certificate is necessary for ongoing project. A time period of months have been granted to developers to get completion certificate for ongoing and under-construction projects.
As of now, Gujarat, Madhya Pradesh, Odisha and Uttar Pradesh have finalized rules under the RERA act, while other states like Bengal, Tamil Nadu, Karnataka, Rajasthan and Maharashtra have framed their draft rules.