The Real Estate (Regulation and Development) Act, 2016 (RERA) seeks to protect homebuyers as well as boost investments in the real estate sector. RERA has come into force from May 1, 2017. Here’s a look at how the homebuyers will be benefited under the RERA.

SITUATIONS FACED BY HOMEBUYER BEFORE RERA:

* Property builders advertised and sold properties based on ambiguous super built up area. A lot of homebuyers ended up spending more but actually deriving lesser benefits and useful space.

* Homebuyers had to pay a booking charge to block their investment in an apartment and later pay the total purchase consideration in one go or in instalments without even knowing that how and where their funds were being utilised.

* Homebuyers did not have a point of contact to check the progress of the project invested in.

* Homebuyers had no mechanism to know the credibility of the project and had to merely rely on the brand of the property developer or promises made by the property developer.

* There was no redressal mechanism for either delay in obtaining occupancy certificates/ possession or for the realisation of sub-standard development in the future.

HOW RERA INTENTS TO TAKE CARE OF THE ABOVE SITUATION:

* A property has to be sold based on carpet area only (selling of property based on super built up area is prohibited under RERA). To avoid confusions and tweaking at the end of property developers, RERA has specifically defined ‘carpet area’ to mean net usable floor area of an apartment which includes area covered by the internal walls and excludes the area covered by the external walls, areas under service shafts, exclusive balconies, verandahs or open terrace areas. This will give an assurance to homebuyers that they will pay for the actual space that they are getting.

* Property developers will have to park 70 per cent of the total consideration received in a separate bank account. The aforementioned amount can be withdrawn only for the purpose of cost of land and cost of construction in the specific project. The amount can only be withdrawn in proportion to the percentage of completion of the project. Further, the withdrawal can be made only after obtaining requisite certificates from an Architect, an Engineer and a Chartered Accountant in practice. This will give an assurance to homebuyers that their money is being invested specifically in the project and not used for any other purpose, thereby, guaranteeing the quality of development.

* It has been made mandatory for the property developers to maintain a website and provide details of the registration granted by RERA, quarterly updates on number and type of apartments or plots booked, approvals granted, the status of the project, etc. This will ensure that the homebuyers are updated on each and every aspect of the development and is no longer duped by the developer.