The real estate segment extends RERA assurance to the residential and commercial properties — mostly for newly launched and under-construction properties. But, then there is a third segment — that of resale properties. In this guide, we examine if RERA extends its benefits to the resale category or not.
What is RERA?
The Real Estate (Regulation and Development) Act, 2016 (RERA) regulates the real estate sector and protects rights of both homebuyers and developers. This was implemented by most states in India in 2017.
What are resale properties?
Resale properties are properties that have not been purchased directly from the developer but from another owner. These are second-hand properties in which transfer of ownership happens between the owner and the home-buyer by executing a sale deed. A resale property may or may not have been occupied by the owner and can be a brand new property or a very old one too.
See also: How does RERA help in case of project delays?
Does RERA cover resale properties?
The answer to this is both yes and no. This depends on the time and the owner from which the resale property has been purchased. Explained below in detail.
Buying resale property in under-construction property
In this case, you will be buying a property in an under-construction project from the home-buyer who may have paid stamp duty and registration but would not have got the occupancy certificate (OC) and possession. In such cases, the property is transferred to the new owner in front of the SRO, keeping the developer in loop as the developer will hand over possession of the property to the new home-buyer. Again, since this is an under-construction property that the home-buyer has invested in, even though it may be a resale, he is eligible to use all benefits prescribed under RERA with respect to that property.
Buying resale property in a new project after hand over
If you buy a resale property in a new project, then the property is covered under the RERA. This is because the project is a new project and it is mandatory for a new project to be RERA registered. So, even if ownership is transferred, the RERA guarantee, unless it has expired, will be valid to the new owner. He can enjoy the same RERA protection and advantages that the previous owner had until the validity lasts.
Like in the case of Ganesh Balan who invested in a 3 BHK in a gated community in Navi Mumbai. “The developer had handed over possession to the owners in 2023. According to the RERA Act, a five-year RERA guarantee is given to all new projects. Since the project is RERA registered, I still have three years of cover for my new property that I bought as resale. This way, in case of any issue that I face in my housing unit, I still have the option to seek legal guidance,” he said.
See also: How do you check if the real estate agent is RERA registered?
What all should you know if you consider a resale flat that is RERA protected?
- All resale flats must be registered with the relevant RERA of that state. For instance, if the property is located in Karnataka, it should be registered with Karnataka RERA.
- The developer must provide buyers information such as construction status of the project, project location, configuration, etc.
- The home-buyer should know that in case of any issue, he can file a grievance with the RERA.
Note that if you are exploring options to buy a resale flat, it’s important to be aware of your rights and protections under RERA and to take steps to ensure that you are fully informed and protected when making your purchase.
When is RERA not covered for resale flats?
RERA is not covered for resale flats if the property is not a new property and is not RERA registered. For instance, if a person invests in a standalone building whose possession was given in 2008, it does not fall under the definition of a new building and it is also not RERA registered. Hence, any resale property transaction happening here will not be RERA benefit-proof. In this case, if there is a heavy leakage or any other issue that the home-owner faces, he will have to first lodge a complaint with the housing society. In case of no response, he will have to file a case with the consumer court.
Points under RERA Act that resale flat buyers should know
RERA compliance
The resale flats should comply with the RERA and should be registered with them. In case a home-buyer is buying a ‘new’ resale property that is not RERA registered, it is a red flag that the property is involved in some litigation and has not complied with all RERA norms. It is safe to not invest in such properties.
Information disclosure
Under RERA, the seller of the resale flat should provide the new buyer with all property-related information such as layout plan, carpet area, approval status, etc.
Buyer’s investment protected
Under RERA, in case of a new resale property, the seller should hand over all property-related documents including original sale deed, etc., to the buyer. In case of resale, the seller must provide the buyer with the original title deeds and necessary documents related to the property, to ensure the protection of the buyer’s money.
Due diligence
It is important to do due diligence before getting into investment of any real estate project, and resale flats are no exception to this rule. In this case, it is more important to check if the owner has done any modifications to the blueprint, if the title deed is in place, no litigations, no pending money, etc.
What are RERA backed resale home buyers eligible for?
Grievance redressal
Under RERA, a home-buyer can lodge complaints with the regulatory authority in case of any issue with respect to the house, including non-compliance from the developer’s side.
Rectification
In case there are any defects in the construction of the resale flat, the buyers can approach RERA to get the developer to rectify the property. However, this should be done within the specified timeline until which the RERA guarantee exists.
Right to compensation
In case the house still has defects and has not been rectified and handed over like it should have been by the developer, then the buyers can file for compensation with the RERA.
Housing.com POV
The real estate regulatory authority (RERA) is very effectively implemented in India and the real estate segment has become an organised and transparent sector because of this. While investing in a resale property that is relatively new, an added advantage is if it is RERA registered. A RERA registration itself acts as a deterrent for a developer from defaulting as the penalties levied are huge.
FAQs
Are resale properties registered with the RERA?
All new properties that are part of the resale market are registered under RERA.
Should you invest in a non- RERA registered property?
Unless it’s a very old property, it is not advisable to invest in a non-RERA registered property.
Are projects that go under redevelopment RERA registered?
Yes, since the projects that go under redevelopment will be new buildings, they are all RERA registered. This also adds a safety layer for people who give their property for redevelopment.
