RERA Act: 10 Major Benefits for Property Buyers

To have a dream home of one’s own is a dream that few can realise. The rising real estate prices, inflation and high cost of living are some major barriers that obstruct this basic need for most of us. Moreover, till not so long ago, builders and realtors set their standards and practices according to their whims. Homebuyers had to sign on the dotted line that were mostly structured in favour of the builder while the homebuyers had almost nothing in their favour.

Therefore, to set things right, the Govt of India introduced the RERA Act. Thus ensuring that the interests of the home buyers could be protected. The Act aimed to ensure that the developers/builders did not exploit them. In this blog, we shall explore the top 10 benefits of the new RERA Act for property buyers.

What is the RERA Act?

The Real Estate (Regulation and Development) Act, or the RERA Act, was introduced by the Government of India in 2016. The primary goal of the Act is to regulate the real estate sector and bring transparency to home or property buyers. Consequently, the Act ensured and made it mandatory that builders follow specified standards during construction and delivery of projects. 

It became mandatory for builders to register their projects and disclose all necessary information about the project. This includes project plans, approvals, agreements, and timelines. Therefore, the RERA Act has brought transparency to the real estate sector and is helping buyers make informed decisions. Additionally, the RERA Act also specifies the creation of a Real Estate Authority and Appellate Tribunal for states. Thus if there are any malpractices by the builder/developer – the property buyer can file a complaint to this authority.

10 Major Benefits of the new RERA Act for Home Buyers

1. Timely Completion

According to the new RERA mandates, all builders have to complete projects within the given timelines. Therefore,  avoiding delays and ensuring that buyers receive their properties on time. Thus, the implementation of RERA has led to a nearly 50% increase in project completion in seven major cities in India. According to a recent report, the act has led to a reduction in project delays and legal disputes and reduced costs.

2. Standardised Carpet Area

RERA has introduced standardisation to the real estate sector. Now, builders have to sell properties based on the carpet area or the actual usable area of a property. So, there is no confusion and it has helped buyers compare properties easily. Before the RERA registration check, builders used their formula for determining the carpet area of a property. Consequently, with the introduction of this act, there are clear guidelines on how a builder should calculate carpet area.

Also, the Act has made it a rule for builders to use standard agreement formats for sale agreements, lease agreements, and other contracts. Therefore, preventing unfair terms and conditions in agreements.

3. Protection of Buyers’ Interests

The RERA Act has laid the rule that requires builders to maintain a separate escrow account for each project. Therefore, it ensures that the money collected from buyers is used only for that project and cannot be diverted elsewhere.

Moreover, the builder is bound to rectify all defects at no extra cost within 30 days.

If the buyer sees any structural defect or any defect in workmanship, quality, provision or service within 5 years after the possession. In case, the builder does not comply, the buyer shall be entitled to claim compensation for the same.

In case the project is delayed, then the buyer has the option:

• To withdraw from the project with a full refund along with interest payable from the due date of completion till the amount is refunded.
• The buyer may choose to continue with the project till the completion. In such a case, he/she will be entitled to compensation along with interest payable from the due date of completion of the project till completion.

Also, if the buyer gets a defect in the title of the property then he/she can claim compensation from the builder. 

RERA implements that the builder may not demand an advance payment or application charge greater than 10% of the assessed value of the Property before entering into a sales agreement.

4. No More False Promises

RERA has explicitly prohibited builders from advertising or selling properties before getting all necessary approvals. Consequently, preventing builders from making false promises and cheating buyers.

Most importantly, RERA provided for a state-level Real Estate Regulatory Authority and a Real Estate Appellate Tribunal to hear and resolve disputes between buyers and builders. This protects buyers’ interests and provides a mechanism for dispute resolution. Now the buyer has the right to file a lawsuit if the builder’s promises or agreements are false. 

5. Clear Project Details

RERA mandates full transparency on the part of builders to provide clear details of the project, including the land title, layout plans, and approvals. Therefore this enables buyers to avoid investing in projects with legal issues. Consequently, complete transparency and the right to property information are some of the most significant advantages of the RERA statute. Moreover, it offers you the right to get full details about the property you are investing in. 

Therefore, all real estate projects have to be registered and their details available on the RERA website. This includes project plans, approvals, agreements, and timelines. Buyers can access this information and make informed decisions. Moreover, it has brought relief to the buyers from the malpractices of unfair builders.

6. Standardized Agreements

RERA ensures that builders use standard agreement formats for sale agreements, lease agreements, and other contracts. This helps in preventing unfair terms and conditions in agreements.

7. Redressal Mechanisms

RERA Act provides a state-level Real Estate Regulatory Authority and a Real Estate Appellate Tribunal. Now there is a regulated platform to hear and resolve disputes between buyers and builders.

Therefore a complainant can file complaints to the state-level regulatory body established under RERA to resolve all complaints. However, if there is any disagreement, the complainant may submit it to the Appellate Tribunal, which will resolve the same within 60 days. 

Also, the builder is required to pay at least 30% of the fine, including interest and any monetary damages charged to him/her.

8. Reduced Cost

RERA has brought great relief to investors and property buyers as it has reduced the costs of real estate projects and ensures that the builders complete the project on time and with all necessary approvals. Therefore, limiting unnecessary delays and legal hassles, resulting in reduced costs.

9. Improved Quality of Construction

RERA Act has laid down mandatory instructions and that builders follow certain quality standards while constructing buildings. Therefore, it has led to an improvement in the quality of construction and reduced the chances of accidents.

10. Validating the Clearances

Before the strict changes in the RERA Act, builders used to sell the projects before receiving the necessary clearances. Consequently, property buyers faced a lot of issues related to the title of the property. However, the RERA Act, brought significant changes, now, the builders can only sell the property once the necessary clearance has been validated from their end. Also, now they are required to submit the relevant paperwork to the registrar.

Some more Benefits of the RERA Act

More Credibility: 

The real estate industry now has greater credibility and transparency because of the RERA Act. Also, it has ensured more increase in investment in the real estate industry. Thus, supporting the sector’s expansion, and growing demand is driving down prices. Consequently, bringing down housing interest rates. Therefore, the Act has increased the security of the real estate market for buyers as well as investors.

Applicability of RERA

RERA applies to all Builders and Developers except the following:-

• Where the area of land to be developed is not more than 500 sq meters or the no. of apartments to be developed is not more than 8
• If the Promoter has received a completion certificate before the RERA was introduced.
• Renovation or Repair or Re-development which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building.
• RERA applies to the development of property and not to the renting of property.
• RERA applies to residential and commercial projects, including shops, offices and buildings.
• RERA ensures that every family has a house of their own. Moreover, the government has also introduced the Pradhan Mantri Awaas Yojana to benefit the public.

Conclusion

Now that you have read through the blog, you must have a fairly good idea about the benefits of the RERA Act. Thus, you know how it has been a game-changer for the real estate industry in India.

Consequently, you understand that the act has brought transparency, standardisation, and accountability to the sector, resulting in increased trust between buyers and builders. Moreover, the implementation of RERA has resulted in a reduction in project delays and legal disputes, leading to reduced project costs. Therefore, considering all the benefits it brings, RERA has become an important tool for property buyers in India.

Looking for residential projects in Guwahati? Get in touch with the experts at Ridhi Sidhi Group today! As a trusted RERA-approved builder and developer, we have the experience and knowledge to guide you through the home-buying process. RERA Assam provides important protections for property buyers like yourself.

Contact us at +91 8822797071 to learn more about our current projects, or schedule an appointment online to meet with our team. We’re ready to help make your dream of owning a home in Guwahati a reality!