Living in an apartment complex named Prestige Park Grove in Whitefield, Bangalore, one may wonder about the safety and security of their investment. The fear of fraudulent activities in the real estate sector is a prevalent issue. However, the introduction of the Real Estate (Regulation and Development) Act (RERA) has significantly helped in protecting the rights of homebuyers and investors.
In this article, we will discuss the significance of RERA, its implementation, and its benefits in safeguarding the interests of homebuyers and investors.
Introduction to RERA
The Real Estate (Regulation and Development) Act, of 2016, came into effect on May 1, 2017. The primary objective of this act is to protect the interests of homebuyers and promote transparency and accountability in the real estate sector.
Implementation of RERA
RERA aims to bring transparency and accountability in the real estate sector by making it mandatory for builders and developers to register their projects with RERA before selling them to the public. The developers must also provide detailed information about their projects on the RERA website, including the project status, approvals, and completion date.
Additionally, RERA mandates that builders and developers deposit 70% of the funds received from homebuyers in a separate escrow account. This helps in preventing the diversion of funds and ensures that the money is used only for the specific project.
Benefits of RERA
The implementation of RERA has brought numerous benefits for homebuyers and investors. Let’s discuss some of them below:
Protection of Homebuyers
RERA provides several safeguards for homebuyers, such as the provision of a 5-year warranty period for any structural defects in the property. It also makes it mandatory for developers to disclose the carpet area of the property, which helps in avoiding discrepancies in the area sold and the area promised.
RERA also provides a grievance redressal mechanism for homebuyers, where they can register their complaints against the developers. The authority appointed under RERA is responsible for resolving these complaints within a specified timeframe.
Timely Completion of Projects
One of the significant advantages of RERA is that it ensures the timely completion of projects. As per the act, developers cannot advertise or sell any property before obtaining all the necessary approvals from the authorities. Additionally, they are required to complete the project within the timeline specified while registering the project with RERA. This helps in preventing any delays in the completion of the project, thereby ensuring timely possession for the homebuyers.
Transparency and Accountability
RERA promotes transparency and accountability in the real estate sector by making it mandatory for developers to provide all the necessary information about the project on the RERA website. This includes details such as the approvals, project status, and completion date. This helps homebuyers in making an informed decision while investing in the property.
RERA and its impact on the real estate industry in Karnataka
RERA Karnataka has significantly impacted the real estate industry in Karnataka. It has brought in more transparency and accountability in the real estate sector, making it more reliable for homebuyers and investors. Some of the key provisions of RERA Karnataka include:
Registration of real estate projects and agents
Under RERA Karnataka, it is mandatory for all real estate projects and agents to be registered with the regulatory body. This ensures that all the projects are genuine and have obtained all necessary approvals before being advertised or sold to the public.
Transparency in project advertisements
RERA Karnataka mandates that all advertisements for real estate projects must contain the RERA registration number. This helps homebuyers and investors to verify the authenticity of the project before investing in it.
Timely completion of projects
RERA Karnataka mandates that all real estate projects must be completed within the timeline specified by the developer at registration. This ensures that homebuyers and investors do not face any delays in the possession of their properties.
Escrow account for funds
Under RERA Karnataka, developers are required to maintain a separate escrow account for each project. This ensures that the funds collected from homebuyers and investors are used only for that particular project, and not diverted to other projects.
In conclusion, RERA has brought significant changes in the real estate sector and has helped in protecting the rights of homebuyers and investors. Its implementation has led to increased transparency and accountability in the sector, which has ultimately resulted in the timely completion of projects and a reduction in fraudulent activities. Homebuyers and investors should be aware of the provisions of RERA and exercise their rights to ensure that their investment is safe and secure.