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All You Need to Know About RERA Act

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The Real Estate (Regulation and Development) Act, 2016 (RERA) has become effective in the country from May 1, 2017. It will act as the regulator of the real estate sector. Every state and Union Territory (UT) will have its own Regulator Authority (RA) that will be responsible for framing rules and regulations as per the Act.

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Real estate prices did not go down as expected. Builders have not been able to bring the rack rate down, except a few freebies and discounts to customers, due to a variety of reasons, such as, demonetisation, low demand, massive unsold inventory to name a few. Impact of RERA: “Before RERA, the risk of delays, quality, title, and changes were borne by the customer. These will now be borne by the developer and there will be a premium that the flat purchasers will have to pay for transferring this risk to the developer. There is no room for developers to absorb these costs and so they may be transferred on to the customers by way of price increase,” says MD of Gera Developments and VP Credai - Pune Metro, Rohit Gera.

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Up till now, the biggest problem that homebuyers have faced is delayed delivery of real estate projects. Almost all projects launched between 2010 and 2013 have defaulted in handing over possession within the time frame. This is mainly because of funds being diverted to new projects by developers and not using them to complete existing, ongoing projects. Impact of RERA: RERA will require promoters to maintain a separate bank account for each and every project, wherein they will have to maintain 70 percent of the buyer money. This fund can only be used as land cost and for construction purposes. The developers must furnish all additional information about the ongoing projects for benefit of the buyers, apart from depositing 70 percent of the unused funds in separate bank accounts for each project. This will ensure completion of all projects.

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For ongoing projects, developers must make public the original sanctioned plans and also the changes made later. In addition to this, they may also declare the money used, money collected from allottees, original completion timeline and also the time period within which the developer must complete the project. This will be certified by an Engineer/Architect/practicing Chartered Accountant.

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The role of every regulatory authority in the state is to register and regulate the projects and also the agents registered under the RERA Act. There will be a website for public viewing of all projects that have been registered.

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Projects’ quality of concern has been a matter to consider for numerous developers. RERA in fact provides protection against this for up to five years after possession has been granted. It is now the duty of the promoter to rectify any defect in construction within 30 days, if reported within this span of five years. The defects include any workmanship and structural defects, quality of provision of services and any other obligation as per the agreement.

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Until the promoter registers the projects under RERA, he is not permitted to market, advertise, book, sell, invite persons for purchase, and offer for sale any of his projects or part of it. Moreover, every advertisement must have the RERA registration number.

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Registrations of projects have become mighty important as a result of RERA implementation. All homebuyers must always go for projects registered with the RA. Once a particular state has finalised its RA, builders are required to register their projects by providing all information and this would include copy of legal title deed, financial statements and other such documents. The builders will be provided with a tower-wise registration number.

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Delayed delivery is not an option anymore as in case the promoter fails to handover possession of the property within the promised timeframe, he has to return the total amount along with interest as per the rate mentioned in the sale agreement. In case the buyer refuses to withdraw from the project, the developer must pay him/her interest for every month till he hands over possession.

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Once the builder has registered his projects under RA, he will be provided a login ID and password by which he can create a page on the RA website. He has to upload all project-related information on this website. The information will be updated quarterly that will have a list of number and types of plots and apartments booked.

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As per the RERA rules, a promoter will not be allowed to accept more than 10 percent of the property cost as application fee or advance payment. He has to first enter into a registered agreement for sale.

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Contact Details 080- 42427500 Mon-Sat: 9:30 AM → 8:00 PM

Summary: Sumadhura offers 1,2,3,4 BHK Luxury Apartments with Modern amenities around Whitefield and Hosa Road in Bangalore and Gachibowli Hyderabad. With over a decade of experience in the real estate sector, Sumadhura Group has established itself as a premier residential property developer in the country with significant presence in the metropolitan city of Bangalore. For More Information Visit or call +91 8431999444

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