In today’s world, every home buyer has all the legal rights to take a strict action against the injustice meted out to him by unscrupulous builders. It is not easy to make fool of the potential buyers even if they are investing in property for the first time. However, the situation wasn’t the same always.
Earlier, a buyer had limited rights in the real estate market as there was no standard law for the builders to be followed across the country. In the view of this, Government of India introduced the Real Estate Regulatory Authority (RERA) Act in May 2016 to protect the interests of the home buyers and to make sure that they are not exploited by any developer or builder.
With the launch of this act, there is no place for developers to do any mistake to the home buyers.
On that note, take a look at these 10 major benefits of RERA 2016 for the buyers:
1. Standardized carpet area
Before the implementation of RERA, the carpet area on which the builder calculates the price of the property was not properly defined. Every builder had his own method of calculation of the Carpet Area. But RERA has standardized how a builder calculates the carpet area. According to this act, the carpet area includes the net usable floor area of the apartment, excluding the area covered by the external walls, areas under services shafts, balcony or verandah area, and open terrace. However, it does include the area covered by the internal partition walls.
2. Rate of interest on default
In case of any default in completion of the project by the builder or default in payment by the buyer, the rate of interest to be paid shall be the same for both the parties.
Earlier, when a builder used to delay in handing over the apartment, the interest paid by him to the home buyer was less. On the other hand, in case the buyer defaulted – the interest to be paid by the buyer to builder was higher.
3. Reduces the risk of builder’s insolvency/ bankruptcy
A builder usually has several projects in his list which are being constructed simultaneously. Earlier, developers were free to transfer the funds raised from Project A into the construction of Project B.
However, things have changed now. With Benefits of RERA 2016 in action, builders are liable to deposit 70% of the funds paid towards a particular project into a single account. Furthermore, the are allowed to use this amount only for the construction purpose or to pay the land costs.
4. Right of the buyer in case of false promises
If a builder somehow fails to fulfill his commitments regarding the property or he didn’t deliver all the facilities and amenities that he promised, a buyer has the right to withdraw from the project. In such cases, the home buyer is also entitled to get full refund of the amount paid by him as advance or otherwise along with interest and claim compensation.
5. Advance payment
Another benefit of this act for the buyers is that the builder can’t take more than 10% of the apartment’s cost as advance payment before entering into the proper sale agreement.
6. Right of the buyer in case of any defect in construction
Under the RERA 2016, if there is any fault or defect in the construction of your home, then the developer has to rectify the issues at no extra charges within 30 days. This is for the structural defect in the property discovered within 5 years from the date of possession. If the developer fails to do so, a buyer has the legal right to claim compensation for the same, Benefits of RERA
7. Builders can’t delay the projects
According to RERA 2016, every builder has to give a delivery date for the handover of the possession of the property. In case if the builder is not able to complete the project till the delivery date, he will be entitled to pay the penalties.
8. Rights of the buyer in case of any default in title
At any point of time, if the buyer suspects any defect in the title of the property after the possession, he can claim compensation from the builder. There is no specific time period within which you have to discover the default.
9. Right to Information about the property
This is another noteworthy advantage and Benefit of RERA in the favor of buyers. Right to Information can help you on multiple fronts. The developer is entitled to share all the details regarding the residential project, be it layout of the building, plan of execution, completion stages, the status of competition, or any other detail.
10. Grievances will be addressed
Any grievance or complaint against the builder can be taken to the state authority set up under RERA, which shall have the power to solve your problem as soon as possible. If you are not satisfied with the construction of the apartment, you can file an appeal with the Appellate Tribunal who will redress your case within 60 days.
Applicability of RERA
This is a major point to be noted. RERA is applicable to all Builders and Developers except the following:-
- Where the area of land proposed to be developed does not exceed 500 sq meters or the no. of apartments proposed to be developed does not exceed 8
- Where the buyer has already received completion certificate before the implementation of the RERA
- For the purpose of Renovation or Repair or Re-development which does not involve marketing, advertising, selling or new allotment of any property.