The Real Estate Regulations Act (RERA) is a consumer-centric law introduced to protect the interests of property buyers in India. The Act sets up a legal framework, interprets obligations of developers and imposes penalties in instances of unfulfillment. Since its implementation in 2016, the Act has brought about the much-needed accountability and transparency in realty-related transactions.

In the blog, we list five advantages for property owners following the enactment of RERA:

1 Uniformity in Carpet Area Calculation

The value of a property is calculated by multiplying the net usable floor area of a property, known as the carpet area, with the prevalent per sq. ft. price. In the past, there was much ambiguity relating to carpet area calculation since developers approached it in multiple ways. The RERA Act addressed this problem by defining a clear method of calculation for this important parameter.

2 Reduced Risk of Project Insolvency

As per the RERA Rules, builders are liable to deposit 70 percent of the amount realised for a project into separate bank accounts. Amount from this account can be withdrawn only for specific project-related purposes. This rule goes a long way in ensuring the timely completion of projects and the quality of construction. Further, the RERA Act empowers realty buyers with the right to information – entitling them to all information about the project at any time during pre-possession stage.

3 Protection of Buyers’ Rights

The RERA provides to protect buyers’ interests and rights in wide range of situations of default by developers. For instance, buyers are entitled to full refund if the developers make false promises at the time of selling the project or if the latter fails to deliver the project on time. Any defect in the title of the property can also lead the buyers to claim compensation from builders. This defect is not time restricted.

4 Ensuring Quality of Projects Delivered

Structural defects or any flaws in the quality of construction, workmanship, or provision of service, noticed within the first five years of possession, should be rectified by the developer within 30 days without any additional charges. If the builders fail to do so, buyers can claim compensation from them.

5 Establishment of Grievance Redressal Committee

The RERA also has the power to redress all grievances that property buyers may face with the developers. Consumers who are unhappy with the proposed resolutions can also move to the Appellate Tribunal, which will redress their grievances in a span of 60 days.

Indeed, the RERA Act has empowered Indian realty buyers in an unprecedented manner. It has brought forth a paradigm shift in the approach to property dealing in India.