The Real Estate Regulations Act, 2016 (RERA), is created with the intention of protecting the interests of home buyers. The main focus is on leveraging an added sense of transparency in the real estate sector. Endeavoring to establish as a mechanism for speedy redressal to disputes, RERA covers both residential and commercial real estate segments. With the implementation of RERA, it is believed that real estate purchase will be much simpler with an enhanced focus on bringing in better accountability and transparency.

Home aspirants who are seeking to get a new home with a home loan can breathe a sigh of relief with this Act. One of the most influential aspects is it provides a unified legal regime for the purchase of flats, apartments, among others. Additionally, it also seeks to standardise the practice across the country.

Some of the points for RERA include:

  • With the involvement of RERA Act, there is a significant security layer of added protection for the home aspirants
  • Ensuring timely delivery of projects with quality property work. If the builder fails to complete the project on the due date of completion then the buyer has the option
    • To withdraw from the project, wherein he shall be entitled to full refund along with interest payable from the due date of completion till the amount is refunded
    • To continue with the project till the completion, wherein he will be entitled to compensation along with interest payable from the due date of completion of project till the project is actually completed
  • Developers and builders cannot ask for more than 10% of the property’s cost as an advance payment before the sale agreement is signed
  • Selling of properties based on Carpet Area (standardized definition of carpet area)
  • Builders are not supposed to make any changes to the plans without the consent of the buyer
  • After registration, all the advertisement for investments should bear a unique project wise registration number provided by RERA
  • In case of any structural defect or any defect in workmanship, quality, provision or service discovered within 5 years after the possession of the apartment, such defect will be rectified by the builder at no extra cost within 30 days

The implementation of the RERA Act will ensure transparency in real estate sector and the people who are opting to choose a housing loan based on home loan eligibility calculator can avail their dream home without any hassle.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.