How does RERA help sellers?

In case of any grievance, one can register a complaint with RERA online through the state RERA portal.

The Real Estate Regulatory Authority (RERA) was introduced in 2016 to bring transparency to the real estate sector and safeguard the interests of homebuyers. The regulatory authority lays down specific guidelines for real estate developers and agents, such as several disclosures related to project registration, complete project information, financial details, etc., and takes accountability for any construction defects. Before investing in a project, homebuyers can equip themselves with relevant information about the project and these RERA guidelines. Similarly, RERA protects the interests of homeowners or property sellers, including developers and real estate agents.

 

What is RERA?

RERA refers to the Real Estate (Regulation and Development) Act introduced by the government to safeguard the homebuyers’ interests and ensure transparency in the real estate sector in India. Under the RERA Act, every state has its real estate regulatory authority (RERA) that sets guidelines and a mechanism to address the concerns of homebuyers, brokers, builders, real estate agents, etc.

 

How does RERA help developers?

Before the implementation of RERA, the real estate sector was largely unorganised. The regulatory authority not only works towards protecting the interests of homebuyers but also helps developers by laying down guidelines to streamline how businesses operate. Here are some of the major benefits of RERA for developers.

 

#1. Project efficiency, quality and timely delivery

Developers must adhere to various rules and regulations regarding the project construction process, including project timelines, legal approvals and construction quality norms. Developers are responsible for any deviations from the agreed-upon terms and conditions. Real estate developers are required to adhere to project timelines and disclose the details when registering projects with the authority. Registration ensures monitoring of the project’s progress from its commencement to the completion stage, thus ensuring efficiency. The authority ensures standardisation with property quality standards, construction norms, and other regulations in place.

 

#2. Common best practices

Whether it is a commercial or a residential project, including a plotted development, every developer must get the project RERA registered if the area exceeds 500 square metres or if there are more than eight units. Registration of projects is a move towards bringing transparency and making information about the projects readily available to homebuyers on the official RERA portal. Without the registration, developers cannot sell the properties. Otherwise, they are responsible to pay a penalty of up to 10% of the project cost.

Moreover, RERA encourages several best practices, such as using green building practices like rainwater harvesting, energy efficiency, etc. According to RERA, developers must obtain clearance before launching projects.

 

#3. Organised funding

Before RERA was implemented, there were a significant number of delayed projects, mainly due to the lack of funds. The funds collected from one project would invariably be diverted to fund new, different projects. The sector had witnessed many builders going into insolvency. However, with the implementation of RERA, it is mandatory for property developers to deposit 70% of the funds raised in a project into a separate bank account, thus streamlining the processes and ensuring timely project completion.

 

#4. Reduced litigation

Owing to a regulatory framework within which developers are required to operate and greater accountability towards consumers, there is a high level of trust among homebuyers who feel secure investing in a project. This also reduces the chances of legal issues. At any stage, buyers can approach the RERA and register a complaint against developers for non-compliance or for causing financial or emotional distress.

 

#5. Increased credibility

Real estate developers must register their projects with the authority before they can market, book and sell them. This also increases their credibility and trust among prospective buyers. It adds a level of legitimacy and accountability to the projects.

 

How does RERA help real estate agents?

RERA also helps licensed real estate agents who are authorised to buy, sell, or rent properties.

 

#1. Increased credibility and legal authorisation

According to the RERA rules, real estate agents/ brokers must register themselves with the authority. This gives them legal authorisation to market, book and sell projects registered under RERA. This also increases their credibility among prospective buyers and sellers and boosts their reputation, distinguishing them from other unregistered agents in the industry.

 

#2. Fair practices and compliance

RERA registration ensures consumer protection and brings transparency and accountability in real estate transactions. Fraudulent activities are less likely due to the regulatory framework and fair practices. Moreover, agents remain updated about the latest rules and obligations, reducing non-compliance risk and associated penalties.

 

#3. Access to RERA projects

Only registered agents have the right to deal with RERA-registered real estate projects. Hence, real estate agents get access to a wide range of projects and are able to expand their business opportunities.

 

How does RERA help property owners or sellers?

#1. Compensation for construction defects

Property owners who have had possession of their house within the past five years are safeguarded against any structural defect or defect in workmanship, quality, provision or service related to the property. The developer must rectify such defects without extra charges within 30 days. If the developer fails to do so, the property buyer has the right to claim compensation.

 

#2. Protection against unauthorised structural changes

According to RERA regulations, developers cannot make any changes, alterations or modifications to the property plan and specifications without the homebuyers’ consent. The buyers have the right to know about any possible change by the developer and to prevent changes that might impact the value or functionality of the property.

 

Housing.com News Viewpoint

RERA projects the interests of homebuyers while laying down clear guidelines that help streamline business operations for real estate developers and sellers or agents. In case of any grievance, one can register a complaint with RERA online through the state RERA portal. The RERA ensures quick access to relevant information regarding the project, construction status, etc.

 

FAQs

What is the purpose of the RERA?

RERA was set up to safeguard the interests of buyers and developers by promoting transparency, accountability and efficiency in the real estate sector.

Can builders sell without RERA?

Builders are not allowed to sell a property without RERA registration.

 

Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com
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