RERA – What is it and how you can benefit?

8 January, 2019 by SSRPL IT

There has been a constant talk among the public that real estate deals for a very long time have been very seller centric. The customer usually has to accept the seller’s demands whereas the opposite is supposed to happen. To put an end to this sort of a situation in the market and also to improve the investments in the real estate sector, the Government of India passed an Act named the Real Estate (Regulation and Development) Act. The main objective of this Act was to encourage greater transparency, accountability, financial discipline and customer centricity in the real estate sector.

The Real Estate (Regulation and Development) Act, 2016 (RERA) seeks to protect the interests of home buyers and aims to increase the investments made in the real estate sector. The Act came into force from May 1, 2017. Under this Act, the Central and State are expected to notify their own rules for their state apart from the master rules laid by the Act itself. Under the RERA Act, the Karnataka Real Estate Regulation and Development Rules, 2017 was approved by Government of Karnataka and notified on July 10, 2017.

Why RERA?

RERA itself answers this question through its policies and guidelines. Any real estate company wishing to sell in the market needs to be registered under this Act in its particular state.

The salient features of RERA include:

1. Establishment of Real Estate Regulatory Authority – This helps in monitoring the companies under one roof and also in solving issues with the help of officials of the authority.

2. Compulsory Registration of all projects – All the companies and individuals intending to sell any real estate property must register to be licensed to sell.

3. Public Disclosure of all Project details

4. Well-structured list of functions to be performed by the Promoter – The promoter is given a structured set of functions like:
a) To disclose all the information about the project for public reference.
b) To rectify all the defects which occur within 2 years of possession.
c) To refund the money paid by the customer in case of default.

5. Compulsory deposit of some percentage of money (defined by the state government) in a scheduled bank within 15 days of realization from the allotted person.

6. Well-structured list of functions to be performed by the Real estate agents – The agents are given a structured set of rules like:
a) To sell properties registered under RERA only.
b) To maintain proper accounts, documents and records.
c) To not indulge in unfair practices of trade.

7. Rights of Buyers – The buyers gain the right to obtain step-wise schedule of the project and also gain the right to receive and claim refund along with interest in case of default.

8. Fast Track Dispute Settlement – This includes the solving of disputes easily and effectively in the presence of adjudicating officers (Joint Secretary to State Government).