The Real Estate Regulatory Authority (RERA) protects the interests of property buyers. The authority’s objective is to avoid disputes between buyers and builders. One of the rules under the Real Estate Regulation and Development Act of 2016 is the mandatory RERA registration for all new and upcoming projects.
Investing in a project that is not registered with RERA may cause trouble for buyers. However, there are scenarios in which buyers have been led into purchasing properties not registered with RERA.
In this article, we share tips on what buyers can do if they have invested in such projects.
Check this guide to first time home buying in 2024
What is a RERA registered property?
A RERA-registered property refers to any residential or commercial property registered with the state RERA and adheres to the RERA regulations. The RERA Act mandates developers and promoters to register all new and under-construction projects with the state RERA before advertising or selling them.
What happens if you buy a property not registered with RERA?
Properties under the ambit of RERA must adhere to the specified standards, timelines and financial transparency. Purchasing a property not registered with RERA can result in disputes with the builder.
In an RERA-registered project, the project details, including the number of units, floors and area, are mentioned on the state RERA’s website. This ensures that the developer delivers what he has promised as per the sale agreement. Without RERA registration, the buyers may face issues, such as not getting the promised amenities.
Moreover, the absence of RERA registration can affect the property’s value and buyers may face difficulties in securing loans from financial institutions.
Should you buy a property if it is not registered with RERA?
A buyer may face certain risks by investing in a property not registered with RERA. Without a RERA registration, disputes may arise due to the lack of regulatory control. Moreover, the buyers may face project delays or fraud.
If a project is RERA-registered, buyers will be able to track the project’s progress and file complaints against the builder.
Thus, it is crucial to invest in RERA-registered properties, which help safeguard one’s finances and ensure transparent property transactions.
Exemptions on property registration under RERA
According to the RERA Act, builders and promoters are required to register their projects intended for booking, advertising or selling. However, some projects are exempted from adhering to this requirement, as mentioned in Section 3(2)(a) of RERA, if they meet the following conditions:
- The land area must not exceed 500 square metres
- The total number of apartments must not be more than eight
- If the promoter has already obtained a completion certificate for their real estate project before the RERA enactment
- When the construction work is limited to renovation or redevelopment and does not involve any new allotment of apartments, plots or buildings
- Any project that does not fall within the planning area’s boundaries, including specific regions designated by the government or competent authority for potential future development initiatives
In addition to these exemptions, there may be additional exemptions applied by Central and state governments.
What should a buyer do if a project is not registered with RERA?
Buyers stuck with unregistered projects have the right to file a case against the developer in a consumer court. They can seek a refund from the developer by filing a lawsuit in a high court. They can approach the state RERA and register a complaint.
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According to the RERA, promoters and developers must mention the registration number for promoting a project. Thus, RERA registration is mandatory before they can advertise a project. Homebuyers should be cautious when investing in projects and must check if the project is RERA-registered. This will safeguard their finances and save them from hassles.
FAQs
Is it safe to buy property without RERA approval?
Purchasing a property without RERA registration can lead to risks, such as disputes, not getting the promised amenities and difficulties in securing loans.
What is the effect of non-registration under RERA?
Project registration is mandatory before a builder can start promoting and advertising a project. Builders have to pay a penalty for violating RERA rules. For buyers, it can pose risks, resulting in various disputes with the developer.
Can I buy a property if it is not registered under RERA?
One should avoid buying a property not registered under RERA as it can lead to financial and legal challenges.
What happens if a plot is not RERA-approved?
If a plot is not RERA-approved, it may not adhere to the legal guidelines and pose legal and financial challenges for the buyer or investor.
Can RERA take action against unregistered projects?
RERA is authorised to take action against builders or promoters over unregistered projects by imposing penalties. It can stop construction work until the project registration is completed.
| 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 |
