Currently, majority of homebuyers are plagued with delay in delivery of their dream homes. In certain grim situations, this delay has gone up to even six years or more. With no rules in place and an absence of regulator, the builder-buyer disputes were extremely unfair to the buyers.
To address the grievances of homebuyers and regulate the real estate sector, government introduced a new act, i.e., Real Estate( Regulation and Development) Act, 2016. Every state and union territory has its own regulatory authority which are required to frame regulations and rules according to the Act.
Here are six important rules in RERA that will ensure timely delivery of possession of their homes.
The promoters can no longer make promises in air. Their promises will now have a legal backing The promoter of the real estate project is required to give a declaration along with an affidavit and state categorically the time period within which the project will be completed.
Promoters can no longer change the possession date. To secure the interest of homebuyers the rules have stipulated that the “agreement to sale” shall specifically state the date of possession and should also mention the rate of interest in case the possession is delayed.
The promoters are required to mention that they have clear title over the land. A lot of times constuction gets delayed because the titled of the land over which the project needs to be constructed is disputed.
Promoters need to ensure that the land is absolutely free from encumbrances. In a lot of scenarios the projects are delayed because of encumbrances which restrict the ability of the promoter to freely transfer the title of the property.
Most of the projects are delayed because the promoters divert the funds received to construct the homes. Now RERA requires that builders should keep 70% of the amount realised from the buyers of the real estate project in a separate account in a scheduled bank to cover the cost of construction and the land cost should be used only for that purpose.
If the promoters do not adhere with RERA then builder can lose registration of the project under the act and can also face imprisonment for a term which may extend upto three years or fine which may extend upto a further 10 % of the estimated cost of the real estate project.