The purchase of a home is a very important expenditure, and homebuyers in Gurgaon need to educate themselves about the Real Estate (Regulation and Development) Act, 2016 (RERA) in order to make an informed decision. This law is arguably one of the most critical to emerge in the Indian real estate market, effectively furnishing buyers with protection from cheating and delays, and against low standards of construction, while fostering transparency and accountability on the part of developers. If you are even thinking about purchasing a home in Gurgaon, here is everything you need to know about RERA and how it will impact your contemplated property purchase.
1. What is RERA?
The RERA Act was created to regulate the real estate market, protect the interests of homebuyers, and create a system that is equitable and transparent. Prior to RERA, buyers were often deluged with issues such as delays in projects, airy promises by builders regarding the nature of the projects, and overall vagaries in agreements that were not in conformity with legislation. RERA aspires to reduce these issues by creating a marketplace with concrete standards in the real estate sector, while also enforcing strict regulations on developers.
Under the act, each of India’s states must establish a Real Estate Authority, which is charged with applying the law and providing a mechanism for home buyers to air grievances. In Gurgaon, for example, the Haryana Real Estate Regulatory Authority (HRERA) is responsible for implementing the Act, in addition to ensuring that developers comply with the law, all while protecting the interests of homebuyers.
2. Compulsory Project Registration
One of the most pertinent provisions of RERA is the compulsory registration of all projects in the real estate market with the authority in their respective states. Before a developer can market their project (which includes advertising, selling, or promoting) they must register the project with the authority, thus providing protections for buyers and safeguarding against fraudulent activity.
In Gurgaon, once registered, a project receives an RERA number it can publicize. Therefore, to verify a developer’s project status, you simply enter the project’s RERA registration number in your inquiry on the HRERA website. There, potential homebuyers and developers alike can obtain critical details about a project such as the registration number, the expected time of completion, relevant approvals, the builder, and the particular project being considered for purchase. At the end of the day, homebuyers can feel reassured that they are investing in a project that has been officially issued; this protects the interests of the homebuyer.
3. Ensuring Prompt Execution of Projects
Historically, timely execution of new building projects has been a major challenge in the real estate sector. RERA requires developers to adhere to the completion date that was specified at the time of project registration. If a developer fails to complete the project within the committed completion date, then the buyer can claim compensation, including applicable interest or refund of the investment.
In addition to that, RERA mandates that developers deposit 70% of the amounts they collect from the homebuyers into a separate escrow account. This contributes to timeliness because these funds can then only be used for the construction of the project and not diverted to other projects, which could contribute to construction delays.
4. Advertising and Agreements Transparency
RERA has required much needed transparency in the way developers advertise and sell their projects. Developers are no longer permitted to make outlandish claims or overly advertise their projects to mislead potential buyers. Developers are now held accountable to provide factual information about the project that specifies the project layout, the legal approvals, and the expected timelines. When the developer produces all advertising materials, and includes their RERA registration number, it provides at least the opportunity for potential buyers to verify the legitimacy of the project.
Furthermore, RERA has required transparency regarding the sale agreement between the buyer and the developer. These agreements must specify what happens if payments are late, construction will be completed on time, what happens if the project cannot be completed or takes longer than expected, when the developer is going to provide possession, and if the project cannot be finished completely (for whatever reason), what will happen to the buyers money. This type of information discourages disputes and lets buyers have full disclosures about a project prior to purchasing a home in the community.
5. Rights of Homebuyers
The RERA Act provides numerous protections for home buyers, which greatly expands their rights in the realm of real estate. The following are some important rights.
Right to Information: Home buyers have the right to complete information about the project, including the layout of the project, legal approvals, construction progress, and timelines for possession.
Right to Timely Possession: If a developer breaches the timelines of a project, the buyer has the option to either receive compensation, or withdraw from the purchase agreement and receive a full refund with interest.
Right to Quality: If a buyer experience structural defects or substandard construction within five years of possession, the developer has to remedy the situation free of charge.
These rights afford home buyers peaceful enjoyment and comfort that their investment is preserved, even after the purchase transaction has occurred, and they have taken possession of the unit.
6. Grievance Redressal
Under RERA, home buyers will gain access to a strong grievance redressal mechanism. Should you experience problems with a delay to a project, construction defects, or misrepresentation, you may file a complaint to RERA and the authority will be required to take action on the grievance within a specified period of time, offering resolution to the buyer’s grievance.
In addition, should a buyer dispute the decision of the RERA authority, they may appeal to the RERA Appellate Tribunal for an additional step towards resolution. The grievance redressal mechanism makes a streamlined avenue to justice available to home buyers, which had not existed prior to the enactment of RERA in the real estate sector.
7. The Effect of RERA on Gurgaon Property Market
The real estate market in the city of Gurgaon has seen a lot of growth in recently, with many residential and commercial projects being developed around the city. RERA has had a major influence on the direction this market is taking, moving it towards a greater degree of discipline and transparency. Many homebuyers in Gurgaon are feeling more secure in their investments than before, as there is a greater ease of accountability on the part of the developers. RERA has mandated stricter timelines and requirements for financial transparency by developers, homebuyers are seeing a reduction in delays and more overall quality of the projects in Gurgaon real estate market.
8. The Importance of Choosing the Right Real Estate Advisor or Consultant
Even though RERA has improved the real estate landscape, buying a home is always complicated for the homebuyer and will likely remain so regardless of the supposed challenges or time expectations. It is said that having a seasoned real estate advisor or consultant is always beneficial. An experienced real estate advisor will be able to advise you of properties that may be of interest, who are the top developers, and how you can be compliant with RERA.
For that reason, you may also consider looking for the Best real estate advisor in Gurugram who can help you navigate evaluating your property options and negotiating, and also dealing with the “to do” lists that arise during home buying. Your advisor should be willing to provide insight into the market that allows you to make informed decisions.
Likewise, the Best real estate consultant in Gurugram will assist in evaluating property choices considerations, negotiations, resolving homebuying issues, and market insight assurance to make informed and protected. A trusted real estate consultant will also help protect your investment with RERA contracts and guidelines of the governing agency for your peace of mind.
Conclusion
RERA has revolutionized real estate in your protection and transparency experience. Learning the main points of RERA and a good real estate advisor and consultant can mitigate risk, help inform you on making relative decisions vs common pitfalls, and help find property acceptable for your use.
