Buying a home? Beware of these regulations!5 min read
Real Estate Regulatory Authority (RERA) is the government authority that oversees the real estate transactions especially homes and properties newly built or developed. One must be aware of the necessary legal requirements before making any investment in real estate. Check out the list of regulations below.
- RERA Registration – RERA makes it mandatory for every builder to get his project registered in RERA if the land on he is developing the project to exceed 500 square meters or more than eight units. As per section 3, no builder can do a sale or advertisement without getting his project registered in RERA.
- Separate account– As per section 4(2)(I)D), every promoter is required to open a RERA separate account in a scheduled bank to cover the cost of construction and land cost of the project. Every builder has to open a separate account in which he has to deposit 70 percent of the amount collected from allottees. Withdrawal from this account can be done after the submission of the certificate of CA, architect, and engineer.
- Disclosure of carpet area -Now as per the RERA, every builder needs to disclose the carpet area of the inventory for sale in brochures and agreement to sale. Carpet area has been defined in section 2(g) as “carpet area is defined as ‘the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment’”.
- Defect Liability – Section 14(3) of the RERA Act, 2016 provides the remedy to the allottees in case of any structural defects incurred in the five years from the date of giving the possession then the promoter is liable to rectify the defect at his own cost. Further, in the event of the promoter’s failure to rectify such defects within 30 days, the aggrieved allottee is entitled to receive appropriate compensation which is to be decided by the concerned state RERA Authority.
- Standard Agreement to sale – RERA has given the specified format of an agreement to sale. So every builder will be using the format provided by the RERA of the concerned state.
- Quarterly update on construction – Builders has to do Quarterly update on which they have to update project details including the number of units sold, approval taken to date, Certificate from professionals. It will help buyers to track online the progress of the project.
- Advance agreement to sale – Builder cannot take more than 10% of the total cost of the unit before entering into a written agreement.
- Complaint filing– If the buyer has any complaint about the builder /agent, he can make a complaint to RERA. The RERA will resolve the complaint within 60 days.
- Approval for alteration in the sanctioned plan – If a builder wants to make any changes in the plan and common areas of society, then he has to take the approval of 2/3 allottees.
- Agent Registration – Every agent /property dealer is required to get registered in RERA.