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The real estate sector in India is not an organized market. It is not governed by an overseeing body nor does it require sellers to be registered. Any individual, irrespective of their qualifications can act as a broker to find you a house or an apartment for sale or rent. There have been many cases in the media where home buyers have been cheated by middlemen who have sold properties with unclear titles. Moreover, homebuyers had to face bureaucratic delays to have their grievances addressed. Most often, developers also got away with a slap on the wrist.
In light of such issues, the Real Estate Regulation and Development Act (RERA) was introduced in 2016 with a view to protecting home buyers through greater transparency and accountability, while at the same time, give a lift to the real-estate sector investment by building confidence among the public. The Act covers not only new projects but also on-going projects as well. Prior to the implementation of RERA, it was the customer who had to bear the risk amounting from delays in developing and constructing the project.
Let’s explore the impact of RERA on consumers.
Impact of RERA on Home Buyers
It is important that home buyers are aware of their rights, so they are not taken for granted by the developer. RERA established a common legal framework for the buying and selling of property across the country.
As a homeowner who has invested in the project, are you aware that you can claim a refund of the amount along with interest if the developer defaults on the agreed timelines? With a view to standardizing such measures, RERA made it mandatory for states and union territories to establish their own regulatory bodies so that developers may register their property and also ensure that required contractual commitments are fulfilled. A vigorous grievance redressal system was also put in place to address issues.
Buyers have the right to be apprised of their stage-wise development of the housing project including the status of essential amenities such as sanitation, provisions for electricity, and water by checking on the RERA website. The Act made it compulsory for developers to provide periodic submissions about their registered projects.
Promoters and property developers are expected to first register their property with RERA before beginning promotional campaigns. Further, property promoters are held responsible for the advertisement they put out. They cannot mislead potential investors with false information related to the property through any channel, be it model apartments, flyers, or any other form of advertisement. The promoters can be held liable for propagating false information and in such cases, they may even have to return the entire amount to investors.
When it came to the sale of the property, RERA brought in a standard structure for sale agreements, which was earlier tilted towards the developers. To also ensure checks are in place, the Act also implemented a monetary penalty including a jail term, if applicable, for any such violations.
Any future discovery with regard to title misdeeds is the responsibility of the promoters.