With housing loans being easily available, purchasing one’s own home has never been this easier. With home loan interest rates so low, now just seems a perfect opportunity for interested home buyers. And the implementation of RERA act is a BONUS!
What is RERA?
The Real Estate Regulation and Development Act which first came into the formulation in 2016 was finally implemented from May 1, 2017. The RERA news has brought a change for both the sides in the real estate sector i.e. Buyers and Builders. The Act is expected to bring accountability and transparency in the real estate sector. It also seeks to bring a uniformity and a chain of fair practices that would protect the interest of buyers and take firm decisions like imposing penalties on builders in case of sub-standard quality of construction or inordinate project delays.
Moreover, RERA looks forward to addressing issues like price, the quality of construction and other changes that will protect home buyers from unethical players.
Let’s understand how will RERA impact home buyers?
Interested buyers who are in search of purchasing an ongoing project or a project that is yet to be finalised or registered are now ensured better protection under the implementation of RERA act. This is because of the terms of project supply as per the RERA bill.
Pricing is highly impacted and comparatively well managed due to RERA rules. The home buyer will now have to pay only for the carpet area, that is the area that falls within the walls and the builder cannot charge for the super built-up area, which at present is the practice.
As per RERA India, the builder has to transfer a minimum 70 percent of the money received from buyers to an escrow account. This RERA rule is bought to ensure that the builder does not spend the money on other projects since they can only withdraw money from this account after approval from engineers and chartered accountants they appoint. This simply means that the builder cannot use one’s money to build someone else’s house.
How will RERA affect builders and developers?
The thumb rule for builders and developers is that they cannot advertise or promote their project without mentioning a RERA registration number and RERA’s website address after three months. The builders have to provide a 5-year warranty for any defect in the building. He is responsible for any defect in the house.
These RERA rules for developers prove to be a boon for potential buyers. The developers need to provide necessary clearances before selling a project like financial statements, legal title deed with supporting documents, through which malpractices by buyers is expected to terminate. Given this, builders will not be able to take buyers for a ride.
The RERA Act 2017 is expected to boost demand in the real estate space and with factors like accountability and transparency assured; the homebuyers can now invest confidently.
For further security of buyers, RERA instructs that developers can’t ask more than 10 percent of the property’s cost at the time of advanced payment booking amount before actually signing a registered sale agreement.
With such positive changes for homebuyers, there is a scope that RERA act will boost demand for affordable housing. With RERA’s security for home-buyers, it’s just the ideal time for interested buyers to avail a home loan and get a house of their own!