The Real Estate (Regulation and Development) Act (RERA) is aimed at bringing promotion to the real estate sector. It will bring more transparency and accountability in terms of procedures to both developers and buyers.
According to this Act, the builder has to keep 70 percent of the money collected from the buyers in an exclusive bank account (ESCROW account), only to meet the construction purposes of that particular project. The builder cannot accept more than 10 percent of the property’s cost as booking amount/application fee before the execution agreement for sale.
As per RERA rules, the builder ensures protection to buyers up to five years after the possession. If any issue brought to notice by the buyer during this period including quality of construction/defect in workmanship/provision of services, the builder is responsible to rectify such defects within 30 days.
According to this Act, it is mandatory for builders to publish all the information about their projects, such as project plan, project layout, land title and status, government approvals, contractors, schedule and completion of the project with clients and RERA.
RERA mandates that carpet area have to be clearly mentioned before sale. The builder cannot charge for the super built-up area. The area for balcony/terrace should be mentioned separately before the sale.
The act clearly states that the builder will be able to sell the project only after registering the project with RERA. Any advertisement inviting a person to purchase or investment should carry the unique RERA registration number. All the ongoing and upcoming projects will come under the purview of this.
It is mandatory that the agreement of sale should mention the date of possession. RERA imposes strict guidelines on the builder and ensures on-time delivery of the project.
In case of any complaint against the builder, the buyer can go the real estate regulatory body for redressal. For a builder, if they come across any delayed payment, they can also approach the regulatory body.