The Real Estate (Regulation and Development) Act, 2016 (RERA) came into force on May 1, 2017 in the entire country. Since then there has been confusion and buyers find it difficult to make a decision. Many buyers are baffled on how to ascertain if their projects are RERA-compliant or not.
One such buyer Baladhitya wonders, “Will RERA bring any hope for home buyers? I am looking for properties for my own use, should I wait for some more time?”
On May 1, 2017 Maharashtra notified the Act. The state launched its website and uploaded all relevant details as per the state’s RERA rules. The law mandates that once a project is registered, the developer will have to upload project details on the RERA website and provide updates on construction progress, commencement, occupation and other certificates before the flats are handed over to buyers.
“The situation is one where the positive aspects are apparent, and yet, there is an element of ‘wait and watch’ on the part of both home seekers as well as developers. RERA is a reality and has to be accepted. For stakeholders in real estate, the post-RERA necessary changes are being implemented. These are early days and we should see things firming up in the next few weeks,” says Dr Niranjan Hiranandani, co-founder & chairman, Hiranandani Group.
If you are a confused buyer and want to know whether your project is RERA compliant or not then you can check the following before you park your hard-earned money.
Legal TitleYou need to check that your developer has the legal title of the land on which the development is proposed, or has legally valid documents with authentication of the title if such a land is owned by another person. RERA has done away with the age-old practice where someone without having a legal title would sell to home buyers. Now buyers have to be cautious and see whether the project they are buying is RERA-compliant or not.
Detail of EncumbrancesIs the land free from all encumbrances? Check the details of the encumbrances on such a land, including any rights, title, interest or name of any party in or over such land along with details.
Possession DateRERA mandates that all projects have to be delivered as per the possession date mentioned by the developer. So, don’t forget to check the time period within which he promises to complete the project or its phase. With RERA becoming a reality, it is important for developers to prepare for the changes promptly. “We believe that improved project planning will help developers avoid delays and manage project funds efficiently. It would be prudent to hire planning professionals to ensure timely project completion. Making such preparations early should give developers an edge over rivals and boost buyer’s trust," said Surabhi Arora, Senior Associate Director, Research, Colliers International India.
Escrow AccountSeventy per cent of the amounts realised for real estate projects from allottees, from time to time, shall be deposited in a separate account. This account has to be maintained in a scheduled bank to cover the cost of construction and other costs related to construction. This means that the developer has to use the money for the same project for which the funds have been collected. If your developer has deposited the money it means he is willing to complete and deliver the project on time.