The Guardian of Real Estate Buyer- Rera

Introduction

Real estate is something in which everybody loves to invest their hard-earned money as a saving or for their living. A property is something which a person thinks of owning in his lifetime for his earnings but what if the builder takes the money and don’t give the possession on time, what if the builder does some malpractice by giving something else than what is promised and confuses the buyer by using some technical terms and justifies his act. All these things were happening a lot in the real estate sector and there was an urgent need for a regulation which was aimed at providing safeguard to the buyers. This urgency led to the enactment of Real Estate Regulatory Authority Act in 2016 with only 67 out of 90 sections notified at that time. All the rest sections were notified in 2017 and the act came into force from that time. It was a revolutionary act aimed at providing protection to real estate buyer.

RERA ACT

RERA Act is a comprehensive legislation which is aimed to protect the rights of buyer and to regulate the real estate sector and make sure that the developers don’t misuse their position and dominate the buyer as per their wish.

The act consists of 92 sections and are divided into 10 chapters and is applicable in whole of India.

The act lays down various provisions regarding what the builder has to do and not do, it has also made it compulsory to register all their properties under the act, it also lays down the establishment of a trial appellate to hear the issue and pass judgements.

Section 2 of the act also provides legal definition to carpet area, buildup area etc to make sure the buyers don’t get into any confusion and face loss due to any confusion.

The act also talks about registration of real estate agents and talks about the functions and role of agents.

Important Provisions

The act mandates the registration of all real estate project with their respective state real estate regulatory authority even before they advertise those projects for the buyer (Section 3) and the project which has been registered with the authority cannot be changed after registration and the plan can only be changed in special circumstances with the consent of 2/3^rd buyers.

The developers also have to disclose all the important information about the project like the sanction plan, carpet area, amenities to be provided, location of the project, etc and make an application for registration of the project (Section 4)

The act mandates the money received by the developers for the project must be kept in a separate account and 70% of the money has to be used only for the work for which it is intended.

The power of the government to establish a state regulatory authority under this act is given under Section 20 of the said act.

A real estate appellate tribunal is established under section 43 of the RERA act to hear the grievances and punish the offender.

The punishments for offences under this act are given from section 59-68.

Issues faced earlier and their punishment under RERA

• Constant change in the development plan: – Earlier the builders made projects as per their wish and floors were also decided as per their wish creating security issue and other issue. By the enactment of this act the builders have to first register their project. The government will then check and pass the project and the developer will be allowed to work as per the disclosed plan and working differently without the prior permission is made punishable making the project more transpirable.
• Late Possession of Property: – One more major issue faced by the investors was the late delivery of the possession of the project, but the enactment of this has solved the problem by making an obligation on the developer to provide the possession on time or pay compensation to the investors.
• Use of the money received by builder in different tasks: – Earlier the builder used to take money from the investors and instead of investing the money on the project they would earlier spend on their personal needs and wants. But the act mandates that 70% of the money received by the builder for the project has to be used for the project and money has to be received in a separate account.
• No platform to hear grievances: – The setting up of tribunal also provided people with a platform where they could complain their grievances and their issues could get solved and setting up of a tribunal also makes sure that the disputes are solved soon.
• Over Pricing by builder: – The act also mandates that the developer must charge according to total carpet area and not as per the super buildup area to make sure that builders don’t charge excess and misuse their power.

Conclusion

RERA is a comprehensive legislation which has empowered the buyer against the ill practices of developers. The act provides citizens with several rights and the developers are given various duties which they have to do. This act has also made the real estate sector more systematic to make sure that nobody takes undue advantage over anyone. The act also establishes an authority to make sure the provisions under this act are followed and also establishes a tribunal to hear all the grievances of people. The publication of all the details regarding the project also helps in making the whole project more transparent and also make sure that developer doesn’t charge in excess.

Author:- Abhishek Ramanuj, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or   IP & Legal Filing.

REFRENCES

https://www.bajajfinserv.in/insights/know-all-about-rera-act

https://en.wikipedia.org/wiki/Real_Estate_(Regulation_and_Development)_Act,_2016

https://www.indiacode.nic.in/handle/123456789/2158?locale=en

https://blog.ipleaders.in/real-estate-regulation-and-development-act-2016-2/