What are the Benefits of RERA Act for Property Buyers
To safeguard the interests of the property buyers and to ensure that they are not exploited by the builders, the government introduced the RERA – Real Estate Regulation Act on 1st May 2016 to protect the interests of the property buyers.
What is the meaning of RERA?
RERA stands for Real Estate Regulations Act and was introduced in 2016 to protect the interests of home buyers. The aim of RERA is to provide relief to the buyers from the malpractices of the builders. RERA brings some norms for building and development of real estate which will increase the transparency in transactions in the real estate sector.
Benefits of RERA Act :-
The builders used to inflate the net usable floor area of an apartment, or property which he constructed, as a result of which the cost of the property would rise up. However, now the method for calculation of the net usable floor area of an apartment or property has been clearly defined by RERA and so now the developers cannot manipulate the calculation of net usable floor area of a property in order to increase the prices.
Earlier in case the builder delays the possession of property, the interest paid by builder to the home buyer was less whereas in case the buyer defaulted the payment then the interest to be paid by the buyer to builder was higher. There was no equality in the interest to be paid by both the parties. The RERA Act has now clearly specified that the interest rate shall be the same for both the parties.
There have been certain cases where the builder took the funds from home buyers for constructing their homes but used the funds for other purposes. And if later they became bankrupt then were not able to complete the construction of the property. So according to RERA the funds can only be used for the purpose for which they have been raised, this will ensure that the funds are not used elsewhere, ensuring timely completion of the property.
In case there is dome faults in the commitments made by the builder and the actual project, the buyer have the option to withdraw from the project, where he is bound toget fullrefund of the amount paid by him or her.
The builder can take not more than 10% of the cost of the property as an advance, ensuring that the buyer is not totally scraped out of money.
Builder can not do advance booking or market his project until the map is approved and the project is approved by RERA.
Everyone is not able to afford a home as the real estate prices are very high. To add to the misery, every builder earlier had his own rules and there were no standard norms. Every builder followed different practices and made the builder-buyer agreement in such a manner that is in his favor. But now after this act things have somewhat come to track.