RERA – Important Things to Know for Home Buyers - Home Loan Stories

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What is RERA?

The Real Estate (Regulation and Development) Act, 2016 or “RERA” is an Act by the Indian Parliament to protect the interests of home buyers and boost investments in the real estate sector. According to RERA, every real estate project (where the land exceeds 500 sq. mtrs. or more than 8 apartments is proposed to be developed in any phase) must be registered with RERA.

What is the purpose of RERA?

Purpose of RERA is to protect customers especially through the period of the construction of the project. It is to provide relief to the buyers from the malpractices of unfair builders

What are the benefits of RERA for the home buyer?

The RERA Act serves as a big benefit to eliminate deceitful builders.

It prevents insolvency by taking declaration from builders that 70 percent of the amount realised for the real estate project from the buyers, from time to time, shall be deposited in a separate account to be maintained by a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose
Along with all the required documents, the promoter has to give a declaration stating the time period within which the project will be completed
“Agreement of sale” will have to carry the date of possession and the rate of interest in the case of any default
A written affidavit has to be provided by the promoter that the land has a legal title on which the development is proposed along with the legally valid documents with authentication of such title, in case of property owned by another person.
A written affidavit has to be provided by the promoter that the land is clear from all encumbrances and details of the encumbrance of the property including any rights, title, interest or name of any party related to that land.

If you wish to buy a home with the help of a housing loan, there are various factors to be considered while choosing the right lender and safeguarding your money. Once your home loan eligibility is established by the Bank (or the NBFC), rest assured that you have taken a wise decision in opening the doors to your aspiration of buying your dream home.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

Realty queries associated with RERA

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