Almost a decade after the idea for law in Real-Estate was proposed (by The National Conference of Ministers of Housing, Urban Development and Municipal Affairs of States and UTs held on 20th, January 2009), the real estate regulatory act came into force on 1st May 2017. Buying a House has been a roller coaster ride for the past many years, a ride comprising mostly of unpleasant twists and downs. The transactions were rarely limpid and hardly ever in favor of the buyers; thus, by bringing in a Regulator in real-estate we expect purchases to be painless while establishing accountability and transparency in the sector. Following are few highlights projecting benefits for buyers:
- Builders/ can’t delay the project – Liable to 2%Â above SBI prime lending rate.
- The builder is liable not to charge anything for the area outside the walls – Buyer shall only pay for Carpet Area.
- Builders are responsible for defects in the house – No inferior quality of construction, as compulsory DLP of 5 years for any structural and workmanship defects on all projects, is imposed.
- Builders can’t use your money to build some other project – 70% of Buyers’ money is to be kept in a separate designated account, which shall be withdrawn by the builder in proportion to the project stages completed and approved by Engineers and CA’s.
- Builders shall deliver what they exhibit – any change/alteration requires approval from â…”rd of allottees.
- Builders are bound to continual disclosures – Buyers can observe the progress of the project on the RERA website since the promoter has to compulsorily submit documents to the regulator on a periodic basis.
- Builders to attain Title insurance.
- Real Estate Agents to get registration – Non-Compliance by brokers and agents could attract a penalty up to 10% of the said unit cost or a jail term of 1 year.
- Quick redressal – A quick legal redressal is assured in case of faulty business practices.
- Importance of documentation – Act cannot help those buyers who continue to trust verbal promises/commitments made by agents/brokers. Hence it is advised to document all the claims and promises and get the signature of both the parties, thus mitigating the risk for exploitation.
Rights of Buyers:
- To obtain approved project documents (sanctioned plan, layout plans, etc.)
- Knowledge of stage-wise completion schedule of the project.
- A claim of the refund amount along with interest (at some prescribed rate) if the builder fails to comply or is unable to give possession of the said unit.
- To have the necessary ownership agreement with title insurance for the said unit.
Duties of a Buyer:
- It is the responsibility of the buyer to make the necessary payments as scheduled in the Agreement for Sale and timely pay the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, etc.
- Interest is to be paid on the sum delayed for payment at a rate as may be prescribed.
- Within two months of issuance of OC, the buyer shall take physical possession of the said unit.
- The buyer shall participate towards the registration of the conveyance deed for the said unit.
- The Buyer shall participate in formation of allottee association.
