What is RERA?
RERA (Real Estate Regulation and Development) Act, The act was passed by parliament last year. RERA seeks to bring clarity and fair practices that would protect the interests of home buyers and also boost investments in the real estate sector.
RERA requires builders to submit the original approved plans for their ongoing projects and the alterations that they made later. They also have to furnish details of revenue collected from allottees, how the funds were utilised, and the timeline for construction, completion, and delivery that will need to be certified by an Engineer/Architect/practicing Chartered Accountant.
How will RERA impact Homebuyers?
Some of the important compliances are:
• Informing allottees about any minor addition or alteration.
• Consent of 2/3rd allottees about any other addition or alteration.
• No launch or advertisement before registration with RERA
• Consent of 2/3rd allottees for transferring majority rights to 3rd party.
• Sharing information project plan, layout, government approvals, land title status, sub-contractors.
• Increased assertion on the timely completion of projects and delivery to the consumer.
• An increase in the quality of construction due to a defect liability period of five years.
• Formation of RWA within specified time or 3 months after majority of units has been sold.
The most positive aspect of this Act is that it provides a unified legal regime for the purchase of flats; apartments, etc., and seeks to standardise the practice across the country.
Which projects come under RERA
• Commercial and residential projects including plotted development.
• Projects measuring more than 500 sq mts or 8 units.
• Projects without Completion Certificate, before commencement of the Act.
• The project is only for the purpose of renovation / repair / re-development which does not involve re-allotment and marketing, advertising, selling or new allotment of any apartments, plot or building in the real estate project, will not come under RERA.
• Each phase is to be treated as standalone real estate project requiring fresh registration.