This is good news for home buyers who have been subjected to unethical trade practices of some builders. In March 2016, the Rajya Sabha passed the Real Estate Regulatory Bill. ‘RERA’ (Real Estate Regulatory Authority) was thus brought into existence. This new authority introduced a set of new rules in the buying and selling process of real estate. With this move:
1. RERA protects the buyers in the real estate projects. They are the king now.
2. Every developer has to park 70% of the project funds in one separate account called ESCROW account. This keeps a tight check on the funds and its whereabouts. It also stopped the builders from using the booking money of one project as investments in other projects.
3. In case the developer wants to make any structural changes after the start of the project, it needs to take 2/3rd of the buyers consent.
4. Carpet area of the project has to be clearly defined instead of the super-built up area.
5. The developer should provide all project details on Real Estate Regulator Website and provide regular updates on construction progress.
6. The buyer can now call the developer anytime within 5 years after taking possession to demand after sales services or seek redressal for any inadequacies in the project.
7. In case of delay in possession then the Builder will have to pay interest or rent to the customer along with heavy penalties to the government.
8. Any developer found violating the order of appellate tribunal of RERA, could face a jail term of up to three years and a fine.
9. RERA rules are very stringent and would definitely bring more transparency between buyers, developers and real estate agents. Experts believe that since real estate sector contributes 9% to gross domestic product to India’s growth, this would definitely boost investment in Real Estate Sector.
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