10 New RERA Rules for Builders – The Real Estate (Regulation and Development) Act, commonly known as RERA, was implemented in India in 2016 with the aim of bringing transparency, accountability, and efficiency to the real estate sector. Over time, RERA has undergone several amendments to strengthen its provisions further. In this article, we will discuss 10 new rules introduced by RERA that builders need to adhere to. These rules not only safeguard the interests of homebuyers but also promote fair practices within the industry. Let’s delve into these regulations that have transformed the landscape of the real estate sector in India.
10 New RERA Rules for Builders
- Timely Completion of Projects
- Separate Bank Accounts for Projects
- Escrow Mechanism
- Carpet Area Specification
- Consent of Majority Buyers
- Structural Defect Liability
- Mandatory Registration
- Penalty for Delayed Possession
- Standardized Sale Agreement
- Grievance Redressal Mechanism
Timely Completion of Projects
One of the crucial aspects introduced by RERA is the emphasis on timely completion of projects. Builders are now legally bound to complete their projects within the stipulated time frame, as mentioned in the agreement with homebuyers. Failure to meet the deadline can result in penalties and compensation to the buyers. This rule ensures that homebuyers are not left waiting indefinitely for possession of their properties. This is one of the RERA Rules for Builders.
Separate Bank Accounts for Projects
Under RERA, builders are required to maintain separate bank accounts for each project. All funds collected from homebuyers must be deposited in these accounts and utilized solely for the specific project’s development. This measure prevents builders from diverting funds and helps ensure that the money paid by homebuyers is used exclusively for the intended purpose. This is one of the RERA Rules for Builders.
Escrow Mechanism
To enhance financial discipline and protect the interests of homebuyers, RERA has introduced the concept of an escrow mechanism. As per this rule, a certain percentage of the project’s total cost must be deposited in a separate escrow account. This money acts as a guarantee for completing the project and can only be accessed based on the project’s progress. It ensures that funds are not misused and provides reassurance to homebuyers.
Carpet Area Specification
In the past, homebuyers often faced discrepancies between the promised area and the actual carpet area of the property. RERA has addressed this issue by mandating builders to sell properties based on the carpet area. The carpet area is the usable area within the walls of a property, excluding common spaces. This rule prevents builders from misleading buyers by including common areas and external walls while advertising the size of the property. This is one of the RERA Rules for Builders.
Consent of Majority Buyers
RERA has empowered homebuyers by introducing the concept of consent of the majority. In case a builder intends to make any changes to the project plans or specifications, they must obtain the consent of at least two-thirds of the buyers. This provision ensures that builders cannot unilaterally alter the project’s scope or features without the consent of the majority, protecting the interests of the buyers.
Structural Defect Liability
Under RERA, builders are responsible for any structural defects in the property for a specified period after the possession is handed over to the buyers. If any defects are identified during this period, the builder is obligated to rectify them without any additional cost to the buyers. This rule safeguards the homebuyers from faulty construction and ensures that builders maintain the quality of their projects.
Mandatory Registration
RERA makes it mandatory for all builders and developers to register their projects with the respective state’s regulatory authority. The registration process involves providing detailed information about the project, such as land title, project layout, financial details, and completion timeline. This rule aims to bring transparency to the real estate sector, enabling homebuyers to make informed decisions and safeguarding them from fraudulent builders. This is one of the RERA Rules for Builders.
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Penalty for Delayed Possession
To discourage delays in project delivery, RERA has introduced penalties for builders who fail to hand over possession within the agreed timeline. If a builder fails to meet the deadline, they are liable to pay compensation to the buyers at a prescribed interest rate. This provision not only provides financial relief to homebuyers but also acts as a deterrent for builders who tend to delay projects. This is one of the RERA Rules for Builders.
Standardized Sale Agreement
RERA has introduced a standardized sale agreement that builders must use while entering into agreements with homebuyers. The agreement includes all the essential terms and conditions of the sale, project details, timelines, and other important aspects. This rule ensures uniformity and clarity in the agreements, reducing the scope for ambiguity and disputes between builders and buyers. This is one of the RERA Rules for Builders.
Grievance Redressal Mechanism
RERA has established a robust grievance redressal mechanism to address disputes and grievances between builders and homebuyers. Each state has its own regulatory authority that oversees the implementation of RERA and resolves conflicts. This mechanism provides a platform for homebuyers to seek justice, ensuring that their concerns are heard and appropriate action is taken against errant builders. This is one of the RERA Rules for Builders.
Conclusion : RERA Rules for Builders
The introduction of these 10 new rules by RERA has brought significant changes to the real estate sector in India. Builders are now required to comply with stricter regulations, ensuring transparency, accountability, and fair practices. These rules empower homebuyers, protect their interests, and promote a healthy and reliable real estate market. As the real estate sector continues to evolve, RERA remains a crucial tool in maintaining the balance between the interests of builders and the rights of homebuyers.
FAQs
How can homebuyers seek redressal under RERA?
Homebuyers can seek redressal under RERA by approaching the regulatory authority established by the respective state. The authority oversees the implementation of RERA and resolves disputes between builders and homebuyers.
Are builders legally bound to complete projects on time under RERA?
Yes, builders are legally bound to complete their projects within the stipulated time frame as per the agreement with homebuyers. Failure to meet the deadline can result in penalties and compensation to the buyers.
How does RERA protect homebuyers from structural defects?
RERA holds builders responsible for any structural defects in the property for a specified period after possession is handed over to the buyers. Builders are obligated to rectify such defects without any additional cost to the buyers.
How does RERA address the issue of misleading property sizes?
RERA mandates builders to sell properties based on the carpet area, which is the usable area within the walls of the property, excluding common spaces. This rule prevents builders from misleading buyers by including common areas and external walls while advertising the size of the property.