Know About the Laws to Protect the Interest of Flat Buyers

“Ignorance of the law is no excuse in any country” – Thomas Jefferson.

People can take months and even years to zero in on that perfect dream home in a beautiful neighborhood. But it’s quite ironic that they hardly give a thought to the legal aspects associated with their property ownership. The urge to buy a home is so strong that other important factors are often relegated to the backside. Even the most educated are found guilty of this mistake.

You spend millions on buying and decorating your house. So it is important that the investment is done with great care & caution. Every minor but finer point should be examined carefully to avoid any problems and regret later. It is your hard-earned money, and it is only fair that you are extremely proactive while buying property. So what can the home buyers do to protect & empower themselves? Read on to know.

Certain Prerequisites Before the Legalities:

Regular site visits should be made by the buyer before and after the sale transaction. This gives you first-hand information about the project and its progress. The sale agreement specifies the date on which the flat’s possession is due to be given to the buyer. Payments are typically linked to the progress in construction. When you visit the site personally, you can check whether the project is progressing as per the schedule. You can also see the quality of materials being used for your apartment. Any delay, deviation, or default can be taken up immediately with the builder and regulatory authorities.

RERA is a Gamechanger:

The real estate sector in India is huge but largely unorganized. There was no single regulatory body to govern the rapid growth of this sector. There were no uniform standards applicable across the country. This led to significant delays and large-scale defaults by many property developers. Home buyers were left in the lurch, and many of them ended up paying both rent & EMI as they had availed of bank loans but did not get possession of their homes even after 8-10 years. This created lot of legal & financial troubles for the people in particular and the real estate sector in general.

The Real Estate (Regulation & Development) Act 2016 was passed by the parliament, and the Real Estate Regulatory Authority (RERA) was established with the primary objective of protecting the interests of home buyers and regulating the real estate sector. The act enforces greater accountability in property transactions by imposing several legal obligations on the builders. A builder can no longer take the customers for a ride under ambiguous clauses of the sale agreement.

With the RERA in force, every possible issue for the home buyer ranging from construction to delivery, can be quickly addressed by a competent authority. You no longer have to run from pillar to post to secure your interests. The RERA act mandates every state to establish a regulatory authority and an appellate tribunal to address the grievances of home buyers. Greater accountability, transparency, and efficiency in operations will pave the way for the holistic development of the real estate sector.

Salient Features of the RERA Act:

• Setting up a regulatory authority in every state to resolve all disputes related to the real estate sector through a fast-track mechanism.
• Mandatory registration of real estate projects with RERA to grant legal jurisdiction to the authority. Project sales can commence only after RERA registration.
• The builder cannot transfer the buyers’ rights in a project to a third party without the written consent of at least 2/3rd of the number of buyers and the permission of RERA.
• Both the buyer and the builder are required to pay an equal rate of interest as penal charges in the event of default by either of them.
• The builder has to compensate the buyer for any loss arising due to the defective title of the property.

Key Benefits to Home Buyers:

Some of the major benefits that new home buyers can derive from this landmark legislation are listed below.

1. Definition of Carpet Area: The law clearly defines the carpet area to calculate the price of the apartment. Builders cannot charge based on the super built-up area (SBA), and the price must be based on the carpet area.
2. Interest Charges on Default: Prior to the enactment of RERA, the interest paid by the buyers for late payment was higher than what the builder would pay them in case of late delivery. Now the rate of interest is the same for both parties.
3. Separate Bank Account: Earlier, the money collected by the builder for one project could be diverted to other projects. But RERA mandates that at least 70% of the amount collected for a project should be maintained in a separate bank account.
4. Limit on Advance Payment: A maximum of 10% of the apartment cost can be collected as advance payment before the sale agreement is signed.
5. Construction Quality: Any defect with regard to the apartment’s construction occurring within five years of sale must be rectified by the builder at no additional cost within 30 days of receipt of the complaint.
6. Grievance Redressal: Regulatory bodies and appellate tribunals are to be set up in every state to resolve disputes. Any person aggrieved with the authority’s order can approach the tribunal, which shall resolve the matter within 120 days.

You can file a complaint on the respective state’s official RERA website by paying a nominal fee. The state governments have clearly laid down the manner in which complaints can be filed.

Conclusion:

Buying a property is once in a lifetime decision for many people. You simply cannot afford to let your guard down on the legal aspects. A few precautions before buying a home can save your precious time, money & energy later. With the RERA act, home buyers have been empowered like never before. While the government has done its bit by enacting a strong law, it’s equally important for people to be aware of their rights before they can exercise them. With the overload of information today, ignorance is not a problem but a choice!