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Understanding Benefits Of The Real Estate Act (RERA) Of India
Before the implementation of the Real Estate Act (RERA) the analysis and studies conducted by the experts stated that implementing RERA Real Estate Act will bring in transparency in the real estate sector, and homebuyers will no longer have to feel worried about their investments. A similar analysis for the builders stated that builders will be made more responsible since they’ll have to meet the construction deadlines as well as the quality standards.
What to expect from RERA?
The primary objective of RERA is creating a transparent system between the homebuyers and builders, in a way that there’s benefit for both the parties. The benefits that buyers will get through the RERA Real Estate Regulations & Development Act include:
- Escrow Account: Under the act, builders will be required to make a deposit of 70 per cent of the collected amount in an escrow account to guarantee that this money is not diverted from one project to another. This money will be withdrawn as per the stages of construction, approved by engineers and chartered accountants of the builders. There will be fines and penalties if the developer does not adhere to delivery guidelines.
- Pay Only For Carpet Area – From May 1, ever since the RERA act has come into full force the buyers will be required to pay only for the carpet area (area within walls).
These points mentioned above clearly define the benefits of RERA, which will in the longer run affect the homebuyers, builders and agents, directly impacting the economy generated by the real estate sector.
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RERA THE REAL ESTATE BILL DECIPHERED
RERA Real Estate (Regulation & Development) Act which came to full force May 1, 2017 has a list of compliance requirements that make the act a success. Builders, brokers, and homebuyers will now be required to know these rules as well as the penalties associated with them.
Work of the builder and developers will be held transparent and the home buyers will have complete control over it.
CARPET AREA VS. SUPER BUILT-UP AREA
Buyers will be required to pay only for the carpet area – the area between walls. The builder can’t charge for the super built-up area.
Builders and developers will be asked to make a deposit of 70 percent of the collected amount in an escrow account to ensure that this money will not be diverted from one project to another.
NO MORE DELAYS
Builders will be strictly penalized for any delays caused by the project. Builders might as well have to pay the same interest the EMI paid by the consumers.
PLAN CHANGE? NO!
Builders can make no change to the original plan without consent from 2/3rd of the buyers.
New projects should obtain all approvals before launch of the project.
PENALTY AND IMPRISONMENT
Real Estate developer would be penalized including imprisonment up to 3 years in case of non-compliance with any RERA guidelines.
Real Estate Developers should provide all project details on RERA website and provide regular updates on construction progress.
5 YEAR GUARANTEE
The builder will ensure protection of flats from any issues highlighted by buyers in front of the regulator in this period including quality of construction and the provision of services for five years from the date of possession.
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