It is illegal to buy into a project that is not registered with RERA, if it is not yet complete. Banks have been asked to stop funding them either at the project level or at the retail level. That means the bank can refuse to release any more instalments of the loan amount if the project is not registered with the RERA authority in the state.
Benefits for home buyers under RERA
When you invest in a project registered with RERA, your rights are protected as a buyer. Bringing transparency in the sector, RERA mandates:
1. That the developer has to deliver what has been promised. The builder will also have to disclose every detail about the project – like the number of units, carpet area of each unit, etc.
2. The developer will have to transfer 70% money received from homebuyers into an escrow account.
3. This will ensure that the money meant for your project is not siphoned off to other projects.
4. Developers will be able to sell their projects only after necessary clearances.
5. The amenities and specifications that a developer promises have to be present in the project. He cannot make any changes to the plan without the written consent of buyers.
6. The builder will have to provide for any structural defect in the building for five years, from the time possession is given.
7. In case of project delay, the developer will pay the same interest to the consumer as the EMI being paid by the consumer to the bank.
8. In case of any deficiency in the project, the buyer can contact the developer in writing within one year of taking possession for after-sales service.
Narendra Kumar, Advocate on record with the Supreme Court, says that RERA takes care of everything involving developers and consumers in the real estate sector. “RERA is a fool-proof scheme to rebuild trust, bring in transparency and safeguard consumers’ interest,” says Kumar.
“If a builder fails to register his project with RERA, it is his fault. In case buyers approach RERA for grievance redressal regarding a project not registered with RERA, they will be asked – while accepting their complaints – why they opted for an unregistered project,” added Kumar.
It is mandatory for developers to quote their RERA registration number in all their promotions, which means they cannot advertise a project unless it is registered with RERA. You must, therefore, check that the project you are interested to buy has been advertising in media or not.
On the RERA portals, the details of commercial and residential projects are mentioned. A developer has to list all the details and updates about the project, number of units, floors and how many are sold or unsold every three months. Commercial or residential projects with eight units and more come under the ambit of RERA.
All new and current projects fall under RERA. The authority ensures that a developer delivers what he promised to a buyer as mentioned in the sale agreement, including adherence to the completion schedule.