Here is good news for all the homebuyers who have ever faced the problem of delayed projects, have felt cheated by the developer or even scared investing money in new projects. The Real Estate Regulatory Act has finally come into force on May 1st, 2017 to give more power to all the homebuyers. The best among all the good news is that homebuyers would not be entitled to get 10% interest from the developer in case of any delay in project completion. Read on to know more about RERA, what it does and how it would benefit the homebuyers.
RERA: A Brief Overview
The Real Estate (Regulatory and Development) Act was rolled out on May 1st, 2017 with all the 92 sections notified. The act is one of the biggest steps taken by the Indian Government to protect the homebuyer from the developers. The RERA bill was initially introduced by the Indian National Congress to both the houses, Rajya Sabha and Lok Sabha, during their rule in 2013. The Bill got examined by the Rajya Sabha Committee and underwent 20 major amendments in December 2015, which were later approved by the Union Cabinet of India. After getting approval by the Rajya Sabha on 10 March 2016 and Lok Sabha on 15 March 2016, the RERA Bill came in partial enforcement on 1 May 2016 with 59 out of the total 92 sections getting a notification about it. Every state would have to notify and set up their Real Estate Regulators with their own rules to help the homebuyer out with their grievances.
What Would The Act Do?
The Real Estate Regulatory Act was passed by the government to empower the homebuyers who have always felt cheated by the unscrupulous developers. The act would make it mandatory for all the builders to register with the State Real Estate Regulatory Authority and post all the necessary information regarding the project with the same. The homebuyer would get various rights like seeking information for the project stages, getting their ticket money back for delayed or discontinued projects and even getting an interest if the buyer intends to buy the home even after the project delay.
Buyers of delayed projects to get 10% interest, the biggest gift from RERA
There is a plethora of good news for the homebuyers under the RERA Act. The biggest of them being the interest paid to the buyers if they want to continue with the purchase even after project delay. While earlier, the homebuyer was at the suffering end in case of project delay and no provision was made to soothe their problems, with the rolling out of RERA, every homebuyer can take a sigh of relief. The buyer is now entitled with the right to either leave or exit from any project if he/she finds defects with the ongoing project or there is an uninformed delay. If even after the delay in project completion, the buyer still wants to keep the property, then he/she would be entitled to get an interest of 10% from the developer.
This interest would be calculated according to the regulatory authority’s prescribed rates and would be two percent points above the SBI’s (State Bank of India) MCLR or marginal cost of fund based lending rate. This would encourage buyers to stay with their projects instead of just leaving them mid-air even after any delay. This compensation allowed to the buyer would make up for the delayed project completion and the problems faced by the buyer as a result of the same. In fact, the homebuyer, who is unable to make the entire payment in the committed, would now have to pay only 10% interest on the delay, which was earlier set by the developers as 12% to 18%.
With the enforcement of the RERA Act, all the homebuyers who have or are planning to buy property in India by investing in ongoing or upcoming realty projects can simply relax their minds now. The government has taken strong initiatives and would definitely bring a positive change in the Indian real estate sector by making property transaction more transparent and trustworthy.