Promoting fair play in real estate transactions, check.
Protecting the interests of consumers, check.
Timely execution and completion of projects, check.
The Real Estate Regulatory Act, 2016 (RERA), which came into effect from May 1, 2017 covers all commercial and residential projects in every state in India. Delhi, with its sprawling growth of real estate and stable prices in the last few years is expected to bring more transparency for the homebuyers and discipline and credibility for real estate promoters and developers.
Read on to find out how it will impact you as a buyer of a property in the city of Delhi.
Some of the pertinent RERA rules in Delhi
- Looking at the amount of construction going on, the new set of rules notified on November 27, 2016 details that new construction projects as well as ongoing projects need to be registered with necessary documentation with the regulatory authority, an authority named under the Real Estate (Regulation & Development) Act.
- Any litigation or a legal recourse taken has to be disclosed by the developer or the promoter of the property in question. In order to safeguard homebuyers from investing in disputed property, this rule has been made mandatory.
- The regulator’s website will contain detailed information on a company’s litigations from the past five years which have been disposed of by courts.
- An escrow account must contain 70 per cent of the amount received from homebuyers. This money shall exclusively be used to complete the project.
- The regulatory authority has a right to undertake third party audit checks at regular intervals to ensure quality of materials and work.
- Other details apart from details on garage, plot, parking can be included in the sale agreement.
- In case of violations, the regulatory authority has a right to take legal action or penalise buyers and developers as they may deem fit.
Centre vs State
Though Delhi RERA rules are similar to the Central Government’s, the Delhi RERA has chosen to make specific arrangements keeping in mind the city’s set-up. For instance, inclusion of other details in the sale agreement has given buyers and promoters flexibility to include additional spaces like pool, private garden, gym etc in the agreement in case of luxury homes or furnished apartments.
However, what has been a matter of debate in the real estate industry in Delhi has been the one-sided disclosure of the disposed of cases of developers in the last five years.
Many feel that it is unjust and unfairly proves beneficial to the developer as it keeps the information on the on-going cases away from the public eye or the homebuyers. While authorities in the know-how of the Delhi RERA rules point out that the promoter might not have full details on all the cases filed and pending against the developer at the time of project registration, the rule has faced widespread criticism for not allowing the homebuyer to make an informed decision.
In spite of the tussle, experts point to the RERA rules as a unique legislation in the history of the real estate industry. They see the codification of the best practices in the industry as a mark of growth in the coming years.