10 Basic Rules in RERA That Will Stop Builders to Do Willfulness

By Admin May 05, 2017 project-reviews
10 Basic Rules in RERA That Will Stop Builders to Do Willfulness

From Monday (1 May 2017) RERA comes into force in all over India, and the day will be memorized as a turning point for the home buyers who have been investing the largest chunk of their life for their biggest dream in life.

RERA has been founded for regulation and encouragement of the realty sector in India and to ensure the deals in properties, in a well-organized and transparent way. The main concern is to care for the interest of buyers in the real estate sector and to establish a system for fast dispute redressal.

Here are 10 important basic under the RERA guidelines: 

1. Informing the consumer at the time of booking 

The builder at the time of the booking and issuing the allotment letter shall be accountable to provide to the possessor, the following information:

(a) Sanctioned plans, layout plans, with specifications, permitted by the concerned authority.

(b) Phase wise deadlines for completion of the development, as well as the provisions for civic infrastructure like water, power and sewer line etc.

2. Booking amount 

Now as defined by RERA, a builder cannot demand more than 10 % of the cost of the property, as an advance payment or application fee, before actually entering into a registered agreement for sale.

3. Getting the project registered 

Ahead of a project gets launched, a registration number has to be acquired against it. www.indrealestates.com has made your registration easier. Few important documents that the builder has to give to RA will comprise:

(a) Background details of the builder

(b) A short detail of the developments launched by the developers, in the last five years counting ones which are already completed or being developed. The present status of the mentioned developments, any delay in the possessions, cases pending, type of land and payments pending etc.

(c) A genuine copy of the authorizations and commencement certificate from the concern departments. And, where the development is planned to be developed in phases, a copy of the sanctions and commencement certificate from the related authority for each of such phases, is also to be provided.

(d) The sanctioned plan, layout plan and specifications of the proposed project or the phase and the whole project as sanctioned by the competent authority.

(e) Proforma of the allotment letter, an agreement for sale, and the conveyance deed proposed to be signed with the allottees.

(f) The number, type and the carpet area of apartments for sale in the project along with the area of the exclusive balcony or verandah areas and the exclusive open terrace areas with the apartment, if any.

(g) The number and areas of the garage for sale in the project.

(h) The names and addresses of the contractors, architect, structural engineer, if any and other persons concerned with the development of the proposed project.

(i) A statement, supported by an affidavit, which shall be signed by the developer or any authorized person by the developers, mentioning:

(A) That the developer has the legal title to the land.

(B) That the land is free from all hindrances.

(C) The time frame within which he undertakes to complete the development or the phase.

(D)That 70 % of the amount realized for the project from the allottees, from time after time, shall be deposited in a separate account to be maintained by a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose.


4. Ongoing projects 

This real estate act will not only cover the new residential & commercial developments but as well ongoing development. Real estate developers have been given three months to get their ongoing developments registered with RERA i.e. until 31st July 2017.

For this now they have to declare the original approved plans with specifications and alterations made later, total amount collected from allottees, money used, actual timeline for completion, appropriately certified by an Engineer/Architect/practicing Chartered Accountant.

For example, Central Park 3 Cerise Suites an ongoing residential project from a reputed name “Central Park” in Delhi NCR real estate. For this residential project, Central Park Developer have acquired all the necessary approvals as per the RERA Guidelines.

5. Registration of projects 

Always take care that the property you are going to buy after 1 May 2017 is registered with RA body. With the registration builder will have to submit all the information regarding financial statements, the copy of legal title deed and other necessary documents. The developer will get a registration number project-wise i.e. tower wise.

6. Online information 

After registration with RERA body,  a login id will be given to the developer on RA's website, where developers will have to upload every project’s related information on this website. This site will update every quarter of the year.

7. Home buying advertisement 

house for sale


No builder shall present, advertise, book, sell or offer for sale, or encourage persons to buy in any manner any empty land, flats or entire complex, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act. Every act of promotion has to carry the registration number provided by RERA.

8. Interest on default 

The state RA has to fix the rate of interest on a failure to pay by either the builder or the investors. Such a rate could be the interest rate of SBI's maximum Marginal Cost of Lending Rate plus 2%. Odisha state RA has already declared about this in its regulations. Such payment has to be completed within 45 days of it becoming due.

9. Construction Quality 

The construction quality has also been a subject of concern with several real estate developers. The RERA regulation provides for protection against bad construction quality up to 5 years after possession. For structural defect, defect due to workmanship, quality or any other commitments of the developer as mentioned in the agreement for sale is brought to the notice of the builder within the time frame of 5 years, it shall be the duty of the promoter within a period of five years, it shall be the responsibility of the developer to fix such defects without further charge, within 1 months.

10. Possession Delayed – compensation

Delayed


Delayed delivery has been the standard all these years. But now, if your builder fails to complete or is incapable of giving possession of the unit within the fixed timed-period, he has to give back the whole amount you paid with interest at such rate as described in the agreement to sale. And, in case the home buyer does not want to take out from the project, he shall be paid, by the developer, interest for every month of delay, till the possession of project.

Conclusion 

Delayed in possession of the development, bad quality of the construction, residential & commercial development with proper sanctioned plans, were some of the main problems damage the real estate industry. Till 1 May 2017, there wasn't any supervisory body and neither were the regulations of the game in place. In the lack of a supervisory body, the homebuyer was exactly at the mercy of the developers.

RERA is a big step forward and many expectations will be there for the state RA to structure the regulations in line with the Act and not dilute them in developer's favor. Let’s see, how far RERA is capable of bringing back buyer's confidence. 

About the Author - Admin
Admin
Baldev Singh writes the content on real-estate from several years and he is one of the few writers who provide the thought-provoking content on best properties deals.
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