The Real Estate Act (Regulation and Development Act) also known as RERA came into effect on May 1, 2017. Since its implementation, RERA has impacted both developers and individual home loan buyers. The objective of RERA was to ensure that the real estate industry is more transparent and accountable while also regulating issues such as sales deeds, delayed allotment, questionable pricing and quality of construction, furtive title changes, fraudulent registrations and pending permissions. Before its enactment, the real estate industry operated highly in favor of developers, with individual loan buyers often receiving the short end of the stick. Two years later, we now look back at the impact that the RERA has had on individual loan buyers, both in the short and the long term.
1. Set up of the rate of interest on default on the project
A major impact of the RERA on individual home loan buyers has been that in case of any default on the completion of a project by the builder, the rate of interest to be paid is borne by both the parties. Hence before the RERA if the builder delayed the possession of property, the interest paid by the home loan buyer was much higher than that paid builder. However, after the RERA Act, there is parity in the interest rate being paid by both the parties.
2.Buyers rights in case of false promises
After the implementation of the RERA in case, there is a mismatch in the commitments made by the builder and the actual project, the buyer now has the right to withdraw from the project. The buyer is also entitled to a full refund of the amount that he/she has paid in advance along with interest and compensation. Furthermore, builders can also no longer take more than 10% of the cost of the apartment, home or villa as advance or in the form of application fees.
3. Buyers rights in case of delay in possession have improved
One of the major improvements brought around by the RERA is that the rights of the buyer in case of delay in possession has improved significantly. The buyer now has the option to withdraw from the project completely, while being entitled to a full refund and interest payable till the day this amount is refunded. Alternatively, the buyer can also choose to continue the project until the date of possession whereby, he or she is entitled to compensation and interest both.
4. Overall increased transparency
Due to the above mentioned short term impact of RERA, the real estate industry has become relatively more transparent. This means that builders are no longer able to do false advertising and promote a project that is based on false definitions of built up or super built-up areas. They are now required to quote the governmentally defined “carpet area” in all agreements. They also are required to show the status of the project the site plan, units sold, construction stage, possession date, on the RERA website.
Overall we see that the impact of RERA on individual home loan buyers has been very significant. Previously real estate as an industry largely favored developers. Buyers were often left in the lurch with no regulation to adhere to or protect them. While not perfect, RERA in both the short and the long term has done a lot for individual home loan buyers by protecting their interests and providing them with a platform to hold developers accountable. Given such a shift in the industry, now is a good time to invest in the development that will give you the home of your dreams. Forget financing worries thanks to Bajaj Finserv home loans available on Finserv MARKETS. On Finserv MARKETS you can get the best deals in a hassle-free, minus all tedious paperwork. All you have to do is choose the home loan best for you, apply online and have your loan approved in less than 3 minutes and within your bank account in 24 hours. Take advantage of attractive interest rates and enjoy 100% transparency in all the terms and you have the freedom to choose your own repayment tenure if you opt for loans available on Finserv MARKETS.
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