In the last couple of months, Indian real estate has been buzzing with RERA wind that has entirely changed the industry, giving a cheer for home buyers, but chill to developers. Real Estate Regulation and Development (RERA) Act was officially implemented on 1st May 2017 making every home buyer curious to know how it will impact in home buying process and is it right time to invest in the property? Though, there will be quite confusing over its implication, but two things are clear with its implementation- Firstly, it will see a great decrease in the number of delayed projects and increase in the quality of projects.
After its implementation, a section of home buyers applauded the decision, though a few are still confused its actual impact.
Change in the Market Dynamics
There is no doubt that the real estate market has changed dramatically, including the demand and supply scenario. The demand must benefit the expectation raised by the act. However, developers will have to wait to see how these new norms will affect the on-going and up-coming projects. Increase in the demand and limited supply position will help in ensuring that every city that faces high-unsold inventory will have equilibrium.
According to the act, every state after the implementation of the act needs to draft its own regulations and establish the act within a year.
Developers were given time till July to get their projects registered under RERA. For many developers this could be a setback because buyers who have invested on their projects will ask for the amendment set by the RERA. Meanwhile, buyers must now consider investing in projects which fall under the act.
Let us now explore why buying a home during RERA regime is the right decision:
- No More Delays in the Projects:
One of the biggest benefits home buyer will have is no more deferrals in the project. Now the builders will have to deposit 70% of the project funds in dedicated or escrow bank accounts to avoid delayed deliveries. In recent years, there has been a complaint from home buyers of getting late possession which eventually brings loss to the buyer financially. Developers have to provide complete details about the completion date or possession date of the project. Once this information provided in RERA, the developer has to follow the same. In case of delayed deliveries, the customer will now be entitled to a compensation equal to the EMI the buyer is paying to the bank.
- Getting Access to the Project Details:
Home buyers can now have access to complete details about the RERA registered projects. One can find complete details about the division, district, amenities, possession date and other information. So if you’re planning to invest in upcoming projects, then first check if it has been registered under RERA.
- Completely Legal Projects:
As per the RERA guidelines, developers will have to submit all the documents required about the project. Government approvals, land title status, project plan, and other official documents. This makes the project completely legal and builds the confidence in investing in the project.
- More Transparency in the Project:
Transparency is what the real estate sector lacks and RERA will help in bringing down this issue. RERA has made this mandatory for developers to mention complete details about the price per sq.ft including the carpet area and built-up area of the apartment.
Under RERA, home buyer has complete right over asking for after sales service in the project within one year of possession. It is the duty of the developer to offer complete after sales service to the buyer once the deal gets closed.
- No More Violation of Rules:
RERA allows home buyers to let their grievances heard. If the authority finds that the developer has violated the order of the tribunal or rule of RERA, then it will result to 3 years of imprisonment along with a hefty fine.
- No Compromise in the Quality of the Project:
Developers constructing the project need to ensure of high-quality material are involved. Recently, there have been cases of building collapsing resulting to loss of lives. To bring down this mishap, the act has made it mandatory to provide the material information used in the project.
Overall, for home buyers investing on a new residential project under RERA is a beneficial investment. Though in many states RERA rules still has to be notified, but in near months, rules will be levied on every real estate developer. Complete transparency and seamless procedure of the project will go a long way.