December 14th, 2020
What is the RERA Act?
RERA ACT is a government Act that was set up to help investors in buying property. This has made it easy for both homebuyers and sellers by providing information about the Indian real estate industry laws. The main objective of RERA is to create a better market and economy for the country. By setting up criteria for lending, the government has ensured more stability in the property market. The RERA Act's main intention is to make a better feel of uniformity in the real estate sector and protect the property buyers' interests.
PROVISIONS OF RERA
- 1. With introducing these ACT in force, there is now no scope for builders to commit any mistakes on home buyers. RERA's ten significant provisions are: The first one deals with giving the new homeowners' equal rights concerning the title. By setting out equal ownership of the title, the investor can have full control over the property.
- 2. The provision in Rera is equally essential for home buyers, allowing them to get registered. Registered buyers enjoy several benefits, including protection from registration fees, statutory notice for inspection and title search, and tax benefits. Besides, they also enjoy some tax relief under the first condition and a registration certificate of ownership. The third condition, statutory notice, makes it mandatory for all real estate buyers to register under RERA.
- 3. Another significant inclusion in RERA Act is the Board of Agreement, which is the body that decides on the terms and conditions of the agreement between the developer and the home buyer. The Authority includes prominent personalities from various industry professions, such as economists, lawyers, and accountants. Its members are subject to confirmation by the Governor.
- 4. The Board of Agreement has the power to bind the developers in different states of India, and its decision is final. There is another necessary provision of the RERA Act that enables the developer to include clauses in the contract with the home buyer related to future building costs. It allows the developer to incorporate an additional cost clause in the contract.
- 5. The next important provision of the RERA Act is the Buyer Protection Fund, which is meant for helping buyers with various problems related to buying a property. According to this provision, the developer will get support from the Buyer Protection Fund for multiple reasons, such as the inability to find an affordable property, loss of deposit, and other similar problems.
- 6. The Buyer Protection Fund is administered by the National Association of Realtors in every state. Most states have their laws to buy or sell properties, but the rules may vary from state to state. Therefore, the Buyer Protection Fund is important for ensuring buyer protection in all kinds of real estate transactions.
- 7. The final provision of the RERA Act that is being looked into at the moment is the Real Estate Settlement Procedures Act, which was introduced by the Federal Trade Commission to protect home buyers from unscrupulous real estate agents who try to overcharge or work illegally.
The intention behind introducing this act was to strengthen consumer protection in real estate transactions. In other words, it was supposed to prevent the practice of unethical and illegal real estate practices, which often lead to big losses for home buyers and sellers.
If you are looking to buy property in Delhi/NCR, then you need to ensure that the buildings are RERA registered.