Why you should check RERA website before buying a property?: Government of India has brought the RERA act in place with a view to bring more transparency by safeguarding the interests of the home buyers. The conditions RERA has put forward for the realtors and property developers to adhere ensure that the investors are not affected by the unjust & lopsided practices the builders indulge in. We, in this post make it clearer how RERA if implemented properly by the states, is going to affect the property buyers in a positive way.
Why you should check RERA website before buying a property?
1. RERA makes the developers credentials more solid:
All the real estate projects where the total area set to be developed is beyond 500 sq mtrs or more than 8 apartments are set to be developed in any phase should be registered with the RERA of respective states. At the time of registration, details of property developers must be provided along with the key information such as financers, historical track record, to the authorities. These details will be made available to the public in RERA website of the concerned state. This ensures that the buyers will have all the verified information of the promoters which is a very important aspect in going ahead with any property purchases.
2. Separate reserve accounts for every project of the developers:
One of the major regulations brought by RERA is that the project promoters should deposit 70 per cent of the unused fund collected for a project in a separate bank account. And this fund must be used for land & construction cost of the same project. Hence there’s no way that the funds/receivables of one project are diverted to new projects by the developers. This will ensure that projects are completed within the scheduled time.
3. Periodic submission of details on project’s progress:
RERA makes it mandatory for the promoters to periodically submit the authorities the details regarding the progress of the project. This will help the property buyers to track the performance of the promoters in finishing the project within the scheduled time besides having continuous updates on project’s progress.
4. Stringent penal provisions for the promoters in default:
If the promoters make any delay in handing over the properties to the buyers within committed timelines, the Real Estate Appellate Tribunal can intervene in the cases to protect the interests of home buyers by levying fines of up to Rs 10,000 for each day (which may extend up to 5% of cost of unit) of default along with the imprisonment of up to 3-10 years.
5. Promoters can’t make any changes to the project without majority allottees consent:
If the promoters want to make any changes to the plan/property under construction, they must inform the same & get the consent of at least 2/3rd of the total allottees for the same. This feature will safeguard the buyers from lopsided alterations taken by the promoters.
6. Increased post construction responsibility of the promoters:
RERA makes the promoters to be liable for any defects in the property for the next 5 years. Any defects that are concerned with the quality of the construction should be handled and corrected by the developer for the next 5 years of the sale. This will give the home buyers additional security about the quality of the property.
7. Promoters can’t transfer the ownership without the consent of 2/3rd of the allottees:
As per RERA, if the existing promoters want to transfer the majority rights in the property to a 3rd party, they should obtain the consent of at least 2/3rd of the total allottees for the same. This feature makes it difficult for the developers to dilute their responsibilities in the midway.