The real estate industry has seen a lot of exciting changes over the past year. Big changes like the curbing of black money through demonetisation and the promising future through the smart city initiative have given more than enough reasons to purchase a home in 2017. One of the biggest reforms is the release of the Real Estate Regulatory Authority (RERA) Bill. As of May 1, the bill is officially in effect and is expected to have a huge impact on the real estate market. Here are a few things you should know about the RERA bill.
Why was the RERA Bill passed?
Owing to a surge in property development and the massive amount of money that flows into the real estate sector, the Government sought to introduce the bill in order to keep tabs on general real estate practices, thereby nullifying any chance of fraudulent activity.
Real estate developers will now have to register with RERA every time they plan to build a commercial or residential project that exceeds 500 square metres of land. On successful registrations, the developers will be provided with a login ID and password through which they have to fill out an application with the project’s details.
RERA licenced developers must quote their registration number to home buyers on every transaction that is being made. Altogether, RERA ensures increased transparency of real estate dealings for both developers and home buyers.
Increase in demand for housing projects
The RERA Bill has been touted as a buyer- friendly bill; most of the major reforms are angling towards increased support for potential home buyers which enable them to make more informed decisions before purchasing a dream home. Buyers now have an incredible amount of power during the pre-purchase and post-purchase of their home. Developers must get written consent from buyers ahead of making any last-minute changes to the infrastructure of the property and buyers can approach the developer regarding changes and improvements to maintenance services one year after the handover.
With such a big advantage for home buyers, the demand for housing projects is likely to increase, with recent studies showing a surge in real estate stocks. Developers can easily meet the demand by clearing up any unsold inventory.
Real estate brokers have a bigger role to play
Apart from developers, it is mandatory for real estate brokers as well to register with RERA. Brokers need to contact their state’s authority and will receive a registration number through which all sales made by the will be quoted. There are still a huge number of home buyers who depend on facilitators to make purchasing decisions for them; brokers can now sell properties more confidently because all available properties will be registered under RERA.
Projects have strict completion timelines
Developers tend to make lots of promises to sell as much of their property as the can to potential home buyers. One of their biggest promises is the timely handover of a completed project. However, due to unforeseen cases, the completion of a project may be delayed. In the past, there was no penalty for delayed handovers, making it quite difficult for home buyers to settle into their homes as expected. With the RERA Bill coming into effect, developers have to comply with the project deadlines they set; the Bill ensures this by making it mandatory for developers to open a bank account for each project and transfer 70 percent of the funds they receive to the respective accounts. In the case of a delay, the developer must pay off the pre-EMI charges that were initially being paid by the consumer to the bank.
Change in project pricing
Developers normally price their projects based on the sure feet of the super built-up area- the entire area of the compound, inclusive of the outer walls, common hallway and, in some cases, the recreation areas. RERA has forced a change in pricing by asking developers to price their properties based solely on the square feet of the carpet area- home interior space. While this reform may force developers to increase pricing per square foot, it will not affect the total price of the property, as carpet area only comprises of 65-70 percent of the total living space.
Improved quality of housing projects
With the RERA Bill in full effect, the onus is now on developers to improve the standards of their projects. RERA has given developers a period of five years to rectify any structural defects. Home buyers will find it easier to make purchase decisions when assured that their potential future home is in tip-top condition.
Purchasing a home can prove to be a tough task; the RERA Bill has made that task a whole lot easier with its numerous reforms. Radiance Realty is one such builder that is always a step above the rest when it comes to complying with all the latest real estate laws and trends. When you find a home you love, make sure to apply for property insurance. If you love decorating your home, here are some unique ways to go creative with your blank wall.
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