The Real Estate Regulatory Authority i.e. RERA is no less than a revolution in the Indian real estate sector. In fact, the homebuyers and the developers both received positive vibes from this act as the industry was unorganized before the inception of this law. But, even after two years of RERA introduction, many home buyers don’t have a clear view of this real estate regulatory. Thus, here we are letting you know the RERA rules that are important to consider before buying a home.
- Project Registration
Since the formation of RERA Act in 2016 it is mandatory for the developers/builders to register their township projects with the state RERA authority. The main reason behind this is to keep a track of developer and the project development status. This rule also restricts the developer/builder to get involved in any fraudulent activity. The project registration requires information of the developer such as name, company name, project location, and more. All this also prohibits the runway of the developer/builder. In case the developer doesn’t register a project with the RERA authority then he/she can be penalized with 10 percent of the property value.
- Proper Fund Utilization
After receiving several complaints from the homebuyers about the misuse of their money, the RERA Act has made it mandatory for the developers to have an escrow account. According to the act, the developer has to make proper utilization of funds that are raised from the homebuyers on the account of developing the project on time. The act directs developers to deposit 70 percent of the money in a separate account known as the escrow account. This prohibits the developers from allocating the project fund into another as it results in possession delay.
- Protect Consumer Rights
The biggest duty of the RERA act is to protect home buyers interest. The aspiring property owners have the right to file a complaint against the developers for the delay in possession and many other things. In fact, homebuyers can also complain about the developer for having incomplete clearances.
- Project Registration Cancellation
The RERA authority is rightful to cancel the project registration in case the builder/developer violates the rules and regulations. In case of violating norms, the developer/builder can face three years of imprisonment and 10 percent charge of the project’s total value. Hence, the home buyers have an upper hand in case the developer fails to offer possession on time.
- Quick Refund
There are two scenarios in this case. Firstly, the home buyer can claim refund along with interest in case the developer fails to offer possession on the date given in the Agreement of Sale. Secondly, in case the home buyer doesn’t make an exit from the project even after delay in possession, then the developer has to pay monthly interest to the home buyer till the possession of unit is offered.
Remember, there is a provision to cancel developer’s registration under these situations.