Real Estate Regulatory Authority
The Real Estate Regulatory Authority was formed to bring transparency and accountability in the real estate sector. The RERA aims to protect the interest of property buyers and resolve their problems.
The main objective was to create fair and square transactions between property buyers and developers.
All the builders must register the project under RERA before the commencement of the project.
Each state has its own Real Estate Regulatory authority to monitor and adjudicate all the issues related to real estate projects.
All the builders must register their projects with RERA and abide by the rules and regulations of the authority.
The RERA aims to establish a fast-track mechanism to settle all the disputes between developers and homebuyers through the appellate tribunal.
RERA Act
The Real Estate Regulation and Development act 2016 was formulated under section 84 to set up the rules to carry out the provisions associated with the act by the state government.
It extends to entire India except for the state of Jammu and Kashmir.
The Rajya Sabha passed the bill on the 10th of March 2016 and Lok Sabha passed the bill on the 15th of March 2016 after several amendments.
The RERA act was executed on 1 May 2016. Fifty-nine of the ninety-two sections were notified in 2016 while the remaining sections were notified in March 2017.
Benefits of RERA
Cost calculation based on carpet area
The developers must reveal the carpet area and define the price based on the carpet area, not the super area. The act also defines that the carpet area includes usable spaces.
Risk Cover through the Escrow account
As per RERA, seventy percent of funds raised need to be deposited in an escrow account. These funds can be withdrawn per guidelines issued by RERA and after due certification by the architect, Engineer, and Charted accountant. This will reduce the chance of insolvency.
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Rights of a home buyer in case of structural damage
If any sort of structural damage occurs in a building, within five years of possession offered, the developer has to rectify these defects within thirty days without any charges.
Interest payment in case of default
In case of default from the side of the developer and home buyer, both will be liable to pay an equal rate of interest. Now there is the same rate of interest for both parties in case of delay.
In case of a defect in the title of the property
If the home buyer finds any sort of defect in the title of the property, he can claim compensation from the developer. The act doesn’t define any limit on the compensation amount.
UP RERA Complaint:
Buyers, developers, and agents all have equal rights to file a complaint with RERA in case of any issues and grievances. If they are not satisfied with RERA’s decision, they can further file the complaint with the Appellate Tribunal.
Penalties
Under section 63 of the RERA Act, the authority can impose penalties up to 5% of the project cost for non-compliance with RERA orders by the promoters.
The Real Estate Regulatory Authority can impose penalties up to 10% of the project cost if the promoters do not register under RERA.
Non-compliance with the Appellate tribunal can cause a penalty of approximately 10% of the project cost or one-year imprisonment.
The real estate regulatory authority of Uttar Pradesh has imposed penalties of Rs.2.5 Cr. against several developers for failing to comply with authority orders.
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