From 1st May 2017, if you are a home buyer, you will be armed with several new rights specified under the Real Estate (Regulation and Development) Act, 2016 (RERA) such as the follows:
1. The right to obtain information relating to sanctioned plans, layout plans along with the specifications, approved by the competent authority.
2. Buyers will be entitled to know stage-wise time schedule of completion of the project, including provisions for water, sanitation, power and other amenities and services as agreed between the promoter and the allottee.
3. Buyers will be entitled to claim possession of apartment along with completed common areas such as parks, clubs, internal roads etc.
Previously, if the builder had specified that possession will be handed over within 36 months and if consumers were to approach them for completion details before that, the developer would simply ask them to come back later. Now the developer will be duty-bound to give a schedule-wise, time-bound progress report card of the project and buyers have the right to seek information as and when they want.
Earlier, most buyers would procure these documents through the Right to Information (RTI) route as it was not obligatory on the part of the developer to share all these documents but under RERA, they now have the right to ask for them.
Under RERA all allottees shall be entitled to claim possession of apartment, plot or building, as the case may be, and the association of allottees shall be entitled to claim the possession of the common areas, as per declaration given by the promoter. This means that the developer will now have to hand over the project with ready common areas that include parks, internal roads, club house and open spaces. Till now the developers used to complete the towers first and then start work on the common areas but often charging maintenance for all these facilities. It is now clear that no property can be sold in isolation but along with the completed common areas.
Homebuyers also have the right to know the completion plans, no-objection certificates from the fire department, airport authority, invoices of lifts, water pumps, DG sets and even those of air conditioners installed by the developer in the apartment.
Another major feature under RERA is that it specifies that if a buyer decides to cancel his booking, the developer will have to refund the amount along with interest within a period of 45 days. Currently, if the consumer applied for cancellation of allotment, the builder would immediately cancel the unit but delay the refund indefinitely with the excuse that he was unable to resell the unit.
Under the new law if the developer realises that after 15 months he is unable to continue with his business, he has to pay promptly. This provision clearly states the promoter’s responsibility is to inform consumers about any possibility of delay or non-completion of the project on time. It is now the duty of the developer to inform and return the amount to buyers promptly.
The RERA Bill, 2016 was passed by the Rajya Sabha in March this year, while Lok Sabha passed it on March last year. Until now 13 states and union territories have already notified the final real estate rules, while another 16 have prepared draft rules and legal opinion is being taken in respect of North-Eastern states given the land ownership issues there.
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Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata.He also manages a portfolio on the online platform Kristal. Find link to the strategy named ‘The Tortoise’