The Real Estate (Regulation and Development) Act, commonly known as RERA, has been a game-changer in the Indian real estate market. Enacted in 2016, RERA was introduced to bring transparency, accountability, and efficiency to the real estate sector. This legislation has significantly benefited buyers by providing them with a secure and regulated environment to invest in properties. In this blog, we’ll delve into what RERA is and how it benefits the buyer.
What is RERA?
RERA is a landmark legislation passed by the Indian Parliament with the aim of regulating the real estate sector. It was implemented to safeguard the interests of homebuyers, promote transparency, and establish a uniform set of rules for the real estate industry. Under RERA, every state and union territory in India is required to establish its own regulatory authority to oversee the real estate transactions within their jurisdiction.
Benefits of RERA for Buyers
Transparency and Accountability:
RERA mandates that developers register their projects with the regulatory authority before advertising or selling them. This registration process requires developers to provide detailed information about the project, including project layout, approvals, timeline, and financials. This transparency ensures that buyers have access to all essential information before making a purchase.
In terms of home loans, this increased transparency has translated into a reduced risk for lenders. With verified and reliable project information available through RERA, banks and financial institutions are more willing to offer loans for properties registered under this act. This, in turn, has led to a smoother and more streamlined home loan application process for buyers.
Title of Property:
RERA mandates that the developer has clear and marketable title to the land on which the project is being developed. This provision protects buyers from purchasing properties that have legal disputes or unclear ownership.
Project Delays and Timelines:
One of the key benefits of RERA is that it sets strict guidelines for project completion and possession dates. If a developer fails to deliver a project on time, they are liable to compensate the buyers for any losses incurred due to the delay.
From a home loan perspective, this means that borrowers are less likely to face situations where they have to continue repaying a loan for a property that’s indefinitely delayed. Lenders can now have greater confidence in disbursing loans for RERA-registered projects, knowing that the risks associated with project delays have been significantly mitigated.
Advance Payment Protection:
RERA mandates that developers can only ask for a certain percentage of the property’s cost as an advance or booking amount. This ensures that buyers are not burdened with exorbitant upfront payments, and it also holds developers accountable for delivering on their promises.
Quality of Construction:
Developers are now accountable for the quality of construction and are required to rectify any structural defects or poor workmanship within a specified period after possession. This provision ensures that buyers receive properties of high quality and standards.
Defects Liability Period:
Under RERA, developers are responsible for any structural defects or poor workmanship for a specific period after possession. This period typically lasts for five years, providing buyers with a safety net, in case any issues arise post-purchase.
Advance Information on Changes:
If there are any proposed changes to the project plans, layout, or completion timelines, developers are required to inform the buyers well in advance. This ensures that buyers have all the information they need to make informed decisions.
Conclusion
RERA has significantly transformed the real estate landscape in India, making it more buyer-friendly and transparent. By providing a structured framework for developers and buyers, RERA ensures that both parties operate within a regulated environment. For buyers, this means increased confidence, reduced risks, and enhanced protection of their interests. Before making any real estate investment, it is crucial to verify whether the project is RERA registered, ensuring you reap the benefits that come with it. Its impact on the home loan industry is evident in the increased confidence of both buyers and lenders. With reduced risks and delays, home loans for RERA-registered projects have become more accessible and secure. As RERA continues to shape the real estate landscape, it’s safe to say that the future of home loans in India looks brighter than ever.