With the execution of Real Estate (Regulation & Development) Act (RERA), a drop in new launches across the nation is on the cards. This is because only those realty developers who are confident enough of meeting timelines will take on new projects. According to Modi Builders Feedback here are a few ways in which home buyers will benefit from RERA.
The developer will have to transfer 70 per cent money given by the home buyers to an escrow account. The developer can then withdraw this money as per the stages of construction, permitted by engineers and CAs of developers. This will stop developers from using the amount taken for one project for any other project.
Pay For What You Get
As per Modi Builders Feedback, the buyer will have to pay only for the carpet area (area within walls). The builder is not allowed to charge for the super built-up area, where the buyer gets 900-1,000 sq. ft. carpet area if they book a 1,300 sq. ft. house (the remaining is balconies and other spaces). The new regulation is anticipated to stop this unfair practice.
Clearances Before Selling
Developers will be able to sell projects only after the necessary clearances. Under RERA, builders and agents will have to register themselves with the regulator and get all projects with more than eight apartments registered prior to launch. This will take care of widespread malpractices, for example, selling property before getting the necessary clearances. The builder will also have to reveal every aspect about the project – count of apartments, carpet area, etc.
The realty developer will have to provide for any structural flaw in the building for five years. However, the law doesn’t define structural defect clearly, which may result in disagreements amid builders and home buyers.
“Though RERA is a central law, but its implementation will be the call of state governments, as real estate is a state matter,” highlights an expert from Modi Builders.