As per reports, the Indian real estate market is expected to register a 30% growth within the next 10 years. The real estate sector is also expected to see a huge influx of both domestic and foreign investments in the coming years. To encourage prospective homeowners like you, RERA brings bring accountability and transparency to the real estate market, making this an ideal time for buying a home.
What is RERA and why was it introduced?
RERA stands for Real Estate (Regulation and Development) Act, passed by the central government on 10th March 2016 to address the various grievances of property buyers. The objective of the Act is to protect homebuyers from unscrupulous builders and channel investments in the real estate industry.
The Act, which came into force from May 1, 2017, stipulates that every state should have a RERA authority. The enactment of RERA was felt necessary because complaints from buyers being cheated by real estate companies were on the rise.
Moreover, real estate purchases were largely devoid of any accountability or transparency, which is why the need for regulation was imperative.
Take a look at how RERA is going to affect both the real estate market and homebuyers like you.
How RERA will affect you as a homebuyer
Here is a list of ways in which you will benefit as a homebuyer due to RERA.
- You can withdraw from the project and be compensated in full if the developer does not hand over the property by the due date mentioned in the sale agreement. Also, if you do not withdraw from the project, you will be compensated with interest for every month of delay from the due date.
- Builders or developers cannot advertise any new or on-going project in any media without first registering under RERA.
- Builders also require the sanction of two-thirds of allottees to carry out any additions or amendments to the project.
- The legal function of this Authority includes protecting your interest, understanding and solving grievances fast, and standardising a model sale agreement for you.
- For better clarity and to promote transparency, RERA allows you to question the developer on the steps taken during the entire process of development and promotion.
Additional Read: RBI Home Loan Guidelines
RERA’s provisions thus serve to caution builders against taking homebuyers for granted, or causing delays in projects without compensating you. Since it promotes efficiency and transparency, you are now in a better position to take a home loan and begin your journey as a homeowner. So, take a step forward by finding the right housing finance for yourself. Avail an affordable Home Loan from Bajaj Finserv to get a sanction of up to Rs. 15 crore* on nominal home loan interest rates to complete the purchase of dream home with ease and convenience.
How RERA will impact the Real Estate industry
With the RERA coming into force, builders will now have to pull up their socks right from the word go. Here is the list of regulations for builders and developers.
One of RERA’s important regulations is that all proposed projects exceeding an area of 500 square metres or more than eight apartments must be registered with the respective state RERAs. - It is mandatory for the builders to deposit 70% of the project money collected from homebuyers like you in bank accounts through cheques. This means builders can no longer engage in fraudulent transactions or in money laundering. From now on every rupee spent and every rupee gained has to be accounted for. - Builders have to update the status of their project development at every stage on the RERA website. This allows homebuyers to keep track of the progress of the project. - There will be one model sale agreement between all builders and homebuyers to prevent fraudulent or harmful terms.
In this way, RERA eliminates unscrupulous builders and promotes healthy competition of genuine developers in the real estate industry. More importantly, RERA has and continues to have a direct impact on the prices of homes and the home loan interest rates. This is owing to the fact that the transparency prevailing all across the real estate market has now encouraged more investment in the sector. This growing number of investment is bringing down the prices and thereby, the interest rates on home loans, spelling good news for prospective homeowners.
Additional Read: Home Loan Without Down Payment
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