What is RERA and Why Should You Know About It?

Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, is an important law that was introduced by the Indian government to regulate and govern the real estate sector. The primary objective of RERA is to protect the interests of home buyers and to ensure that real estate developers complete their projects on time and deliver them as promised.

Under RERA, all real estate projects are required to register with the relevant state Real Estate Regulatory Authority (RERA) before they can be marketed or sold to the public. The act requires developers to provide detailed information about their projects, including the layout, approvals, timelines, and financial details, and also mandates the creation of a separate bank account for each project to ensure that the funds are used only for the intended purpose.

RERA also provides for the establishment of an appellate tribunal to hear appeals against the orders of the RERA, and imposes penalties and even imprisonment for non-compliance with its provisions. The act has helped bring transparency and accountability to the real estate sector in India, and has given home buyers more confidence and protection when purchasing a property.

We will take a closer look at the important features of RERA that are designed to protect the buyers.

1. Mandatory Registration: RERA makes it mandatory for all real estate projects to be registered with the authority. The registration process requires the developer to provide detailed information about the project, including the land status, approvals, and timelines for completion. This helps in providing transparency and clarity to the buyers about the project they are investing in.

2. Escrow Account: RERA mandates that developers must open a separate escrow account for each project, and they can withdraw money only in proportion to the project's completion. This ensures that the money paid by the buyers is not diverted to other projects, and the developers are held accountable for the timely completion of the project.

3. Carpet Area: RERA has defined 'carpet area' clearly, which is the net usable floor area of an apartment, excluding the area covered by the walls, common areas, and balcony. This ensures that the buyers get what they pay for and that the developers cannot manipulate the actual area of the apartment.

4. Timely Delivery: One of the most significant benefits of RERA is that it ensures timely delivery of the projects. The developers must give a timeline for the completion of the project, and any delay beyond that would attract penalties. This ensures that the buyers get possession of their homes on time, and they are not left in the lurch due to delays.

5. Transparency: RERA has provisions for making the entire real estate sector transparent. Developers must disclose all relevant information about the project, including the timeline, project layout, carpet area, and approvals. This ensures that the buyers are fully aware of what they are investing in and can make informed decisions.

6. Grievance Redressal: RERA has provisions for the timely redressal of buyer complaints. A dedicated Real Estate Regulatory Authority (RERA) is set up in each state to handle complaints and disputes. This ensures that the buyers have a proper channel for grievance redressal, and their complaints are resolved in a timely and effective manner.

7. Quality of Construction: RERA mandates that developers must use high-quality construction materials and follow the building codes and regulations. This ensures that the buildings are structurally sound and are constructed using high-quality materials. Buyers can be assured that their homes are built to last.

In conclusion, RERA has significantly strengthened the real estate sector in India and has gone a long way in protecting the interests of home buyers. The various provisions of RERA, such as mandatory registration, escrow account, carpet area, timely delivery, transparency, grievance redressal, and quality of construction, ensure that the buyers are fully protected and that the real estate sector is transparent and accountable.