RERA Act from the Homebuyer’s Perspective: Benefits, Rights & Duties
- What is The Real Estate (Regulation and Development) Act, 2016?
The Real Estate (Regulation and Development) Act (RERA Act) came into force in 2016 in order to regulate and promote the real estate sector, and to protect the interests of the consumers. The RERA Act attempts to standardize the sector and to make it one that upholds the qualities of transparency and fairness. The Act further established a Real Estate Regulatory Authority, also known as RERA, in each state, for the regulation of the real estate sector and to act as an adjudicating body for speedy dispute resolution and grievance redressal.
- Why is it important to be aware of RERA as a homebuyer?
Prior to the RERA Act of 2016 and the establishment of the Real Estate Regulatory Authorities, navigating the real estate sector as a buyer was next to impossible. Without rigid laws and a clear regulating body governing the sector, there was no standard for builders and promoters to follow, creating a culture of malpractice. While it cannot be said that such malpractices no longer occur, through the RERA Act and its established authorities, there is now a set of rules and a platform that aggrieved parties or buyers can look to in order to receive redressal. Many current buyers, however, are not fully aware of the rights and other benefits they can claim, and the duties they may have to perform, under the RERA Act. This could allow builders or promoters to get away with their malfeasances and potentially even put the buyers at risk.
- What are some sections of the RERA Act that a homebuyer or a potential homebuyer must know?
• Section 3 – As per this section of the RERA Act, every project that has a plot size of at least 500 meters or eight apartments must be registered with the Real Estate Regulatory Authority. It is therefore important as a potential buyer to observe whether a property has been RERA registered before purchasing the same.
• Section 2(k) – Before the RERA Act, there was no legal definition for carpet area. Section 2(k) of the Act defines the same as ‘the net useable floor area of an apartment, excluding the area covered by the external walls, areas under service shafts exclusive balcony or verandah area and exclusive open terrace area covered by the internal partition walls of the apartment’. This standardized definition reduces the chances of buyers being cheated through a promoter or builder’s personal carpet area measurement. In fact, RERA now mandates that any registered apartment shall be advertised only on carpet area basis as defined in the RERA Act, and not any other measurement, such as super area basis.
• Section 4(2)(l)(D) – The Act requires that seventy per cent of the money received from the buyers must be deposited by the promoter to a separate account in a scheduled bank, which can only be used to cover the cost of construction and the land cost. If it is observed that a majority of the money accumulated from the buyers is being used for any purpose except the ones mentioned above, a complaint may be filed.
• Section 18 – As per this section of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment, plot or building, due to any of the circumstances noted in the Section, such as it being in contravention to the agreement between the parties or due to the revocation of a promoter or builder’s RERA registration, a buyer is entitled to withdraw from the project if they wish and also to be returned the amount they paid for the project, with interest.
• Section 31 – This section of the Act states that ‘Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder, against any promoter, allottee or real estate agent, as the case may be’. In Karnataka, complaints can be registered through the Authority’s online portal. The link for the same is as follows: https://rera.karnataka.gov.in/home
- What are the rights and duties a buyer has under the RERA Act?
• Section 19 of the RERA Act states the rights and duties that a homebuyer possesses. Some of the important sub-sections of Section 19 have been listed and stated below. It is important to note that the term ‘allottee’ used by the Act refers to the buyers.
Rights of the buyer:
• Section 19(2) – The allottee shall be entitled to know the stage-wise time schedule of completion of the project.
• Section 19(4) – The allottee shall be entitled to claim the refund of amount paid along with interest and compensation in certain circumstances, which have been mentioned under this Section, such as the failure on the part of the promoter to deliver physical possession of the property in accordance with the terms of the agreement.
• Section 19(5) – Once the property, plot or apartment has been handed over by the promoter, the allottee shall be entitled to be given the necessary documents and plans.Duties/Liabilities of the buyer:
• Section 19(6) – Every allottee shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale and shall pay at the proper time and place.
• Section 19(7) – Every allottee shall be liable to pay interest for any delay in payment towards any amount or charges to be paid, as mentioned under the Act.
• Section 19(10) – Every allottee shall take physical possession of the property within a period of two months of the occupancy certificate being issued.
- Conclusion:
It is imperative that homebuyers are aware of their rights and duties under the RERA Act of 2016. This protects homebuyers by keeping them away from the risk of being manipulated, frauded or ignored by the builders and promoters that they put their trust in. The RERA Act was drafted keeping the interests and protection of the homebuyers in mind. In order to make use of the qualities of transparency and fairness that the RERA Act promises, and the Regulatory Authorities seek to uphold, the homebuyers must be aware and proactive. They can do this by claiming their rights, performing their duties, and filing complaints when they have been aggrieved.
