With the implementation of RERA on May 1, 2017, the Maharashtra government is hopeful that it will bring more transparency and eliminate ill-practices in the real estate sector. It will not only enhance buyer’s experience but is also expected to change the entire home-buying process. So, how is it going to benefit home-buyers? Let us take a look at some key takeaways:
- Benefits To Buyer
The Act restricts developers to make any additions or alterations in the sanctioned plans, layout plans, specifications and the kind of fixtures, fittings, amenities etc. without approval from at least two-thirds of the allottees, apart from the promoter, who have agreed to take units in the building.
The developer cannot discriminate sale on the basis of caste or community. Also, buyer will pay only for the carpet area plus if the project gets delayed then buyers won’t have to pay the monthly interest on bank loans, the developer will incur the same. Under RERA, developer will have to open a separate account for project’s construction, in which 70% of the collected amount shall be deposited and developers can make withdrawal from it only for construction purpose.
If the buyer or allottee finds any construction defect within five years from the date of possession, the promoter will have to repair it without additional charges. If the developer fails to do so, then the buyer has the privilege to demand appropriate compensation from RERA. The promoter will also have to execute a registered conveyance deed in favour of the allottee within three months from the issue of occupancy certificate, or if sixty percent of total units in a building or wing have been paid in full to the promoter, whatever is earlier.
- Project Registration
The new law makes it mandatory for developers to register all residential and commercial projects with the newly formed Maharashtra Real Estate Regulatory Authority (MahaRERA) before 31st July, 2017. Till the time the project is not registered, the developer cannot advertise, market, book, sell or offer for sale. Failing to comply with this law may result in heavy penalties up to 10% of the estimated cost of the project. In case of repeated violation, the developer or promoter might be subject to imprisonment up to three years or penalty of further 10% of the estimated cost or both. Apart from registration, the developer is liable to provide quarterly updates regarding the status of the project.
- Full Disclosure and Transparency
Developers will have to share all details about the project like cost of land, development agreement, construction cost, and sanctioned plans etc. on their official website. They will also have to present a disclosure about the completion time of the project and submit the different phases of development plans, in addition to information about units and covered parking lots. While advertising their project, the developers will have to give out details about MahaRERA website where all these details will be uploaded.
- Filing of Complaint
If there is any discrepancy between what was promised and what was delivered, the buyer will have to contact respective authority. The complaints will be heard and a decision will be made within a specific time period and if the buyer is un-happy with the decision, then the buyer can approach Appellate Tribunal, and eventually the High Court.
- Guidelines For Brokers
Every broker is required to register with the authority and if they fail to do so, the broker shall be liable to pay a penalty of ₹ 10,000 for every day he continues to default, which might extend up to 5% of the cost of the plot, apartment or building which is up sale or purchase.
RERA was long-awaited and finally, it has been implemented, so in the coming months the picture will be clearer as to how the new Act will help the home-buyers.
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