Property investors are often taken for a ride by small builders as well as huge developers. Realty experts from Imperia Structures review the current scenario as “disturbing and unfair’’ for buyers. However, the implementation of the Real Estate Regulation and Development Act (RERA) since May 1, has bought a wave of change in the Indian housing sector.
Here is how the RERA Act benefits property investors, especially home buyers, in four major ways:
Increased regulatory vigilance
Unlike advanced global markets, the Indian real estate sector is largely unorganized and unregulated. In some cases, the real estate brokers are not even registered or certified to carry out a realty transaction. RERA introduces the requisite regulatory vigilance to enhance the accountability and transparency of the sector.
As the RERA Act filters out inexperienced and unprofessional brokers,home buyers will no longer suffer huge monetary losses. Under the regulation, agents will now have to disclose all the necessary property-related information to the buyers. Moreover, brokers will not be able to make any false promises in terms of amenities or services to the investors.
Lesser risk of developer defaulting
It is common among builders to collect funds for a particular project and invest it on another. The practice invariably leads to delays in offering possession to the investors. Therefore, to minimize the chances of developer defaulting, RERA makes it mandatory for builders to set aside 70% of the funds meant for every construction site. Besides that, delay in project completion will incur heavy penalties for developers.
No ambiguous charges
Under RERA, builders can only charge for the carpet area of the property. This is extremely beneficial for home buyers,because earlier the prices were based on super built-up area, which included the terrace and other common places. The act, thus, restricts property prices to the actual usable area.
Undoubtedly, realty investors in India had no access to an adequate redressal system in the previous arrangement. “With RERA, such challenges can be overcome, leading to greater trust for developers among property buyers,” says a senior advisory consult at Imperia Structures.
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