How RERA Impacts Homebuyers: Key Compliances

The Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced to protect the interests of homebuyers and ensure transparency in the real estate sector. Here are some key compliances under RERA that significantly impact homebuyers:

1. Project Registration

All real estate projects must be registered under RERA before any advertisement or sale. This ensures that only approved projects with valid documentation are marketed and sold, protecting buyers from fraudulent schemes.

2. Transparency in Advertising

Developers are required to provide accurate and complete information about the project, including the layout plan, carpet area, and the status of approvals. Misleading advertisements can result in penalties, ensuring buyers receive truthful information.

3. Timely Project Completion

RERA mandates developers to adhere to the timelines provided at the time of registration. In case of delays, buyers are entitled to compensation, ensuring that projects are completed on time.

4. Advance Payment Limits

Developers cannot ask for more than 10% of the property cost as an advance before signing a sale agreement. This regulation protects buyers from excessive upfront payments.

5. Structural Defects Liability

Developers are liable for any structural defects or poor construction quality for up to five years from the date of possession. Buyers can claim compensation or request rectification of defects during this period.

6. Escrow Account for Funds

Developers must deposit 70% of the project funds received from buyers into an escrow account. These funds can only be used for the construction and land cost of the specific project, ensuring financial discipline and reducing the risk of fund diversion.

7. Dispute Resolution

RERA provides a robust mechanism for grievance redressal. Buyers can file complaints against developers for any violations of the Act, and the Real Estate Regulatory Authority is obligated to resolve these disputes promptly.

8. Standardized Sale Agreements

RERA mandates the use of standardized sale agreements, which include detailed terms and conditions. This reduces the chances of unfair practices and ensures clarity in the transaction process.

9. Information Disclosure

Developers must regularly update project details on the RERA website, including construction progress, sales status, and completion timelines. This ensures that buyers have access to up-to-date information about their investment.

By understanding these key compliances, homebuyers can make informed decisions and feel secure in their real estate investments. RERA has significantly contributed to increasing transparency, accountability, and trust in the real estate sector.