RERA: Real Estate Act 2017

RERA: Real Estate Act 2017


Real Estate Act 2017

To regulate real estate sector Real Estate Regulatory Authority(RERA) Bill has been approved. It will bring more transparency in the system and will safeguard the interest of buyers of residential and commercial properties. Each state and union territory need to set up Regulatory Authorities. In addition to other responsibility, it will also maintain website with records of all projects registered with it. Due to RERA act 2017, investment in real estate industry will also increase because now real estate investors will be more confident.

All real estate and commercial projects with over 500 square meters of land or eight apartments have to be registered with regulator before launching the project. Builders and agents both have to register with the regulator bodies. Developers have to put 70% of the amount collected form buyers into a separate account called escrow account, to meet construction cost. If a real estate project is to be developed in phases, then each phase will be considered a standalone real estate project.

Buyers of residential and commercial properties will benefit a lot because developer side risks are minimized. Builders will be liable for repair structural defect for 5 years. Earlier it was 2 years. Issues of project delays and poor build quality will be address more strictly. In case of any deficiency in the project, buyers can contact developer in writing within 1 year of taking possession.

Buyers need to pay for carpet area(within walls) only, not for super build up area such as balconies. Any changes to the plan cannot be made without prior written consent of the buyer. Developer will no longer be able to escalate the cost of the project which is a common practice now-a-days..

Disputes between builder and buyer will be resolved within 120 days. Buyer and builder both can reach to regulator in case of any issue. Penalty can be imposed on buyer if dues are not cleared within time. In case of project delays, developer have to pay interest on amount paid by the buyer.

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