Advantages and Disadvantages of the RERA Act

Introduction

In 2016, the Real Estate Regulatory Authority (RERA) Bill was ultimately passed through Parliament, putting into practice the proposed RERA rules for different states. As per the RERA Act, the rules can vary across states; for example, rules for RERA Maharashtra will be different from the rules for RERA Haryana and RERA Gujarat.

The RERA Act makes it essential for all residential and commercial property projects where the area is above 500 sq m or eight flats, to apply with the respective RERA authorities in their states before launching a project. This rule was put into practice to offer better clarity in project marketing and implementation. Ongoing projects that did not acquire the certificate of completion on the date of passing of the RERA Act were required to obtain registration within three months.

As per RERA rules, there is a timeframe of 30 days, beginning on the day an application is submitted, during which it must decide whether or not to grant the registration form. After successful registration, the promoters of the project will be given a registration number, as well as a login ID and password, so that they can fill out the required information on the RERA platform. If you do not register your project, you could face a fine of up to 10% of the project's total cost or three years in prison. Registration under the RERA Act is required in advance for real estate agents who act as intermediaries in selling or purchasing estates.

Advantages of RERA Act

The decision to purchase a home is momentous for all individuals. Investors should look beyond the asking price when considering investing in a property. To stop all kinds of violations and provide homebuyers with some peace of mind, the Indian government took matters into its own hands and enacted the RERA Act. Several positive aspects of this act are extremely beneficial for the buyers. Listed below are some of the standout advantages of RERA Act.

Complaints will be Heard and Handled Quickly

Under the RERA Act, a purchaser has the right to register a complaint with the Appellate Tribunal if he or she has any issues with the building's construction or the unit itself. Once the Tribunal receives the file of the grievance, they will schedule a hearing date within 60 days. Further, the Tribunal must explain its inability to address the issues if it does not do so.

A small amount of fee is also charged for complaints and varies in different states. For instance, for RERA Haryana and RERA Gujarat, the complaint fee is Rs. 1000, but for RERA Maharashtra, the fee is Rs. 5000.

Property Information Rights

The access to property details guaranteed by the RERA act is one of the advantages of RERA for prospective homeowners. When purchasing real estate, it is imperative to learn everything that is there to know about the property you intend to purchase. Potential homeowners can benefit greatly from this kind of data when making long-term plans.

Payments in Advance

Developers are not allowed to charge more than 10% of the total price of the apartment as an application fee or advance payment before entering into a sales contract. Among other advantages of RERA, this is also one of the most important ones.

Builders Can't Delay Projects

Newly constructed apartments must have a possession date specified by the developer under the RERA Act of 2016. Furthermore, the developer will be liable to several fines if they are unable to finish the project by the specified date.

Rights of Buyers in Terms of Fraudulent Promises

It is the purchaser's legal right to take the builder to court if the builder's promises and the completed project do not match. After then, the purchaser can back out of the deal and get the money back, plus interest and anything else that was promised.

=> Read Also:- RERA Compliance Checklist for Real Estate - A Guide for Home Buyers

Disadvantages of RERA Act

Like two sides of a coin, not everything is rosy about the RERA Act. Several disadvantages of RERA can raise doubts about the suitability of the law. Here are some of the prominent disadvantages of RERA Act that you must know about:

Several Permissions are Required

Developers must now register all active and future projects with RERA Act to ensure their work complies with statutory requirements. The regulations also forbid pre-launches without proper authorisations. RERA rules mandate conforming to registration requirements for each stage of development if the project is being carried out in stages. Without a centralised clearance process, a project's completion is likely to be slowed because numerous clearances must be obtained by the developer.

High Penalty

If the builder does not comply with any part of this RERA Act, it faces fines of up to 10% of the entire project cost or imprisonment for up to three years, whichever is greater. Because of this problem, the purchaser can't move in during this process, and they have to wait till the issue is resolved before they can settle in.

Joint Venture Deterrent

A shortage of funds means that developers will have to depend largely on cooperative agreements with landowners. However, the RERA Act seems to hinder developers and landowners from working together by labelling the owners as promoters. Real estate owners are understandably reluctant to work with developers now that they must shoulder more of the risk when embarking on a new venture.

=> Read Also:- RERA Full Form: What is RERA? & Also Know about RERA Act

Conclusion

To put it simply, RERA rules are a blessing for buyers in the real estate market. Thanks to the advantages of RERA Act, buyers no longer need to spend time and energy investigating the legality of their investment by going over stacks of municipal records. This historic legislation paves the way for an equal playing field. In RERA-approved projects, both buyers and sellers may trust a level playing field. Although, like any other policy, there are some disadvantages of RERA, which might be problematic sometimes.

While you are at it, check the various projects launched by Adani Realty, as they are fully compliant with all RERA rules. You can also speak to their experts for all your property investment-related queries.