What does RERA hold for Home Buyers and Real Estate developers

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What does RERA hold for home buyers and real estate developers?

RERA is one of the most significant and crucial aspects which can positively impact the entire real estate sector of the country. With the introduction of Real Estate (Regulation and Development) Act, 2016 (RERA), an organized structure has resulted in transparency and accountability in a regulated environment. Endeavoring to safeguard the interest of home buyers and also augment the transparency factor, RERA would culminate in clear and fair practices. This would enable the home aspirants get the home of their dreams with the best housing loans.

When it comes to understanding the impact of RERA, one can focus on the primary stakeholders such as home buyers and real estate developers

For home buyers:

No delays: There were always the complaints of home buyers getting late possession of the project. With the introduction of RERA, there will be protection to buyers as the builders will need to pay compensation and penalty in cases of delay
Accountability: From the developer’s end, there will be more accountability and compliance as RERA will punish the non-compliant developers who do not abide by the regulations
Security: Home buyers using the service of real estate agent or broker will be protected as under RERA, agents and brokerage firms will have to ensure that they are duly registered with the Regulator
Resolution: Each state will have regulatory bodies to resolve disputes between builders and buyers within 60 days
Loans: Home buyers can acquire home loan seamlessly from any of the financial institutions

For Real Estate developers:

Registration: All residential and commercial projects developed on a land exceeding 500 sq. mt. or 8 Units have to be registered with the Regulator before the project launch
Area: Real estate developers need to clearly mention the Carpet Area as per the standard definition. Additionally, developers are liable to undertake repairs of structural defects brought to notice of the promoter within 5 years
Completion: Builders need to keep funds in a separate account wherein 70% of the money will be used exclusively for the project. This will ensure speedy and timely completion
Approval: Any new project launched will have to be RERA approved and the developers will need the RERA license to start the project

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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.