All you need to know about the RERA Act

Real estate is a booming market in India. Buyers, small and large, have been developing commercial and residential projects at a very fast rate, with unbidden support from the government. However, as the developments have increased in the market, so have the problems. In this article, we focus on the myriad of problems faced by homebuyers. Across the country, the same umbrella of issues unite us. Problems with possession, faulty construction, corrupt builders, exorbitant real estate prices (here’s looking at you, Mumbai), and more. To add to it, there’s no legal regime to address and tackle these issues. Well, there wasn’t until the RERA Act. Read on to know more about it:

What is RERA?
The Real Estate (Regulation and Development) Act aka RERA, was passed on 26^th March, 2016 by the Government of India to redefine the real estate laws of the country. The Act establishes a regulatory authority in each state and UT with the responsibility to register real estate agents and projects in their respective territory. As per the mandate of the Act, the builders are to upload all details of their project on a website for public access. The RERA Act was designed to not only address and resolve the issues faced by homebuyers, but also provide justice to the wrongdoers.

What are the benefits of the act?
1. Standardized practice: RERA Act is aimed at standardizing the real estate sector in the country, which earlier had no gatekeepers. With RERA, all builders and developers are mandated to follow the same practices and rules as dictated by the government.
2. Transparency: All real estate projects, commercial and residential, are mandated to be registered with RERA. Now any homebuyer will not be unaware of the status of their investment. For example, if you have invested in a Lodha Apartment still in construction, you can check the status of the project on the RERA website. All you need is the project’s MahaRERA number, which you can easily get with a customary search for ‘Lodha Group RERA’.
3.  No delays in possession: Under the RERA Act, the builder has to comply with the agreed upon date of possession. If the developer fails to deliver the project within the specified date, they will be liable to pay the money back to the buyer, along with the interest rate mentioned in the contract. If the homebuyer refuses to accept the money the developer will have to pay monthly interest for each delayed month.
4.   Penalties: In case of failure of compliance with the Act, a heft monetary penalty is levied (10% of the project cost) and imprisonment of three years against violators.