What is RERA?

What is RERA?

Let us take a better insight of RERA today. The real estate market of India sees a lot of changes that too on a regular basis. RERA is one of their changes that is very important for them. RERA which is also known as the Real Estate Regulation and Development Act was implemented on the Indian society in the year 2016. Since then the builders, as well as the houses that you see for yourself, are RERA certified. If there is any case where you are given a house without this certification, do not take that place. There are a few areas and boundaries under which this act governs and if you want to know more about it, just check out the article written below.

As told above, RERA is the development act that affects the real estate market very much. This act was implemented in the year 2016 by the parliament of India in order to protect the people who are planning on buying home. Now, this does not just benefit the home-buyers. It also gives a lot of profit to the builders as well. In one or the other way, it helps in boosting the power investment of people in the real estate market.

What is the RERA certificate?

RERA certificate is an approval given by the local authorities to the ongoing projects in the area. If you are going to build a residential place or a commercial building in India which is more than 500 sq. ft and 8 apartments, then you need to get this certificate as this is the proof saying that you have checked things with the authorities. Moreover, this act helps to increase the transparency of the marketing of the product as well as the execution of it.

What are the benefits of RERA?

Apart from the transparency between the builder and buyers, the RERA also is known for many other things that are important in the real estate market. The best benefits of RERA are listed below:

Standardization of the carpet area

One of the best things that RERA has bought into consideration is the standardization of the carpet area. Previously it used to happen on a random basis. Earlier the calculation on the basis of which the property was done wasnt defined. Every builder used to have their own sets of methods that they used for carpet area calculation. The carpet area is actually the net area that can be used by the person living in the flat. So now the standard method which is the only method by which the cost is calculated is:

The total cost of the property = rate per sq ft in area X the carpet area.

Also read: Understanding Closing Costs: A Guide for Sellers

Every builder has to follow this thumb rule to take out the cost of the flat.

RERA has also reduced the risk of bankruptcy for the builder

It happens usually that a builder is not just working in one project but many. So this was also common that these builders used to divert their funds that were raised from Project A to invest in Project B or C, wherever needed. But with RERA into action, they cannot carry out this process. They will have to keep and freeze 70% of the revenue generated in a separate account. Then this money can only be taken out of the account once the builder finishes the building and get a sanction from a civil engineer, architect or chartered accountant. This is one of the most important RERA rule for builders.

No room for false promises with the buyers

There have been many incidents in which the buyers find out that all the promises are not made correctly and completely. RERA has taken care of such fraudsters as well. If you find that the promises made by the builder and the promises completed by him have some difference then you can simply withdraw from the project. Even after doing this, the builder will have to pay the entire downpayment amount without any deduction.

Payment in advance

RERA has also restricted the advance payment that you make for the project. According to this act, one can just ask for 10% or less than the actual cost of the house. So you will be paying just 10% of the amount and can apply for the possession of the house.

Get all the information about the project

If you have given the token money to the builder and have frozen your apartment, then the builder is liable to give you every information about the house that is possible. Right from the plan layout to the execution of every plan.

Why is RERA important?

RERA is important in more than one way and you need to understand each one of them. Check out the RERA rules pdf for more information, you can get them online on various websites. Just check out them. For more content on such topics you can visit the website of Planmyproperty. They have a lot of options and you can check them out whenever you want.