Till recently, buying a home was a road strewn with pitfalls as the homebuyer had very few rights. There were no standard norms for the builder to follow, and as such homebuyers often fell victim to exploitation by unscrupulous builders. All this changed with the introduction of RERA (Real Estate Regulations Act) in 2016.
The RERA Act aims to protect the rights of the buyer, prevent malpractices by builders and bring greater transparency in transactions in real estate. The RERA Act includes the creation of a Real Estate Authority and Appellate Tribunal in each state for addressing complaints by homebuyers against wrongdoing by their builders. Here is a look at some more benefits of the RERA Act:
1. The carpet area was not defined in a standardized manner earlier, and builders were fleecing homebuyers by inflating the carpet area. But with the introduction of RERA, carpet area now means the net usable floor area of an apartment within its walls, and excluding the balcony.
2. According to RERA, both the buyer and builder get to pay the same rate of interest when either of them defaults on the agreement. Earlier, the builders paid a lower rate of interest when they defaulted on delivery of property.
3. With the introduction of RERA, builders have to use funds raised for a project, for that project only. Earlier funds raised for one project were used for other projects, resulting in delays and even bankruptcy of builders. Thus, the risk for bankruptcy of builder is reduced.
4. If there is a mismatch in what was promised and what was delivered, RERA gives the homebuyer the option to withdraw from the deal – and get full refund along with applicable interest and claim compensation.
5. According to RERA, the builder cannot take more than 10% of the cost of the apartment/villa as advance payment towards making an agreement of sale.
6. If any structural or workmanship defect is uncovered within 5 years of taking possession of the apartment, the builder has to rectify the issue free-of-cost within 30 days, or pay compensation.
7. Delay in delivery date gives homebuyers the option to withdraw from the project with full refund, plus interest payable from the promised due date of delivery.