Whether you’ve spent the better years of your life saving up to build a dream house or applied for a home loan to provide a house for your loved ones; buying a home holds a lot of sentimental value. However, purchasing property can be a stressful ordeal. To add fuel to the fire, corrupt home builders have been ruthlessly taking that dream away.
With the government sanctioning a law in the real estate sector, a sense of relief has washed over the home buyers in India. On 1st May 2019, the RERA Act was introduced to help home buyers escape dishonest builders. The Act was cleared by the Parliament in light of aggrieved home buyers being duped by developers who fail to complete their projects despite years of construction work.
Developed as a means to protect your interests and avoid exploitation, it is crucial to check if your builder is RERA registered. Here are some tips to safeguard yourself from shady developers.
What is RERA?
Before getting into the technicalities of RERA registration, we must understand what the RERA Act does. The Real Estate Regulatory Act (RERA) gives each state and Union Territory in India their own set rules and regulators. In a bid to enhance transparency in the real estate sector, RERA specifies certain norms that every builder needs to follow. It also makes provisions for several rights for the home buyers and helps them file complaints and get justice in event of malpractice.
Now that we know how RERA works, let’s see how you can verify whether the builder and their projects are RERA-compliant.
1. Legal Title
First and foremost, you must check whether your developer has the legal title of the land. If the property is owned by a third party, the builder must possess legal documents with authentication. This helps home buyers be cautious before investing their hard-earned money into fraudulent projects.
2. Project Transparency
Under the RERA Act, developers are supposed to disclose all details of the project such as the promoter’s name, address and proposed date of project completion on the regulator’s website. In case of delay, the website must state the revised date along with details about the project such as roads, water, electricity connection, number of apartments and the level of completion.
3. Escrow Account
Homebuilders are required to maintain a separate escrow account where 70% of the money collected from prospective home buyers will be deposited. The developer can only use this account to cover costs related to the project. This prevents developers from investing funds from Project A into Project B.
4. Paying Penalty
If a builder delays a project, they are liable to pay interest to the home buyer until project completion or refund the entire amount that was collected as a deposit. Developers caught in violation of the RERA Act can be face imprisonment up to three years.
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