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Investing in real estate can be a lucrative venture, but it also comes with its own set of challenges and complexities. The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted to bring transparency, accountability and efficiency to the real estate sector in India. In this blog, we will explore the key aspects of RERA and how it benefits real estate investors.
What is RERA?
RERA is a regulatory framework established by the Indian government to protect the interests of home buyers and promote fair practices in the real estate industry. The act mandates the registration of real estate projects and real estate agents, ensuring that all stakeholders adhere to a standard set of guidelines.
Key Provisions of RERA
- Registration of Projects: All residential and commercial projects exceeding 500 square meters or eight apartments must be registered with RERA. This ensures that projects are developed in accordance with approved plans and timelines.
- Transparency in Marketing: Developers must provide accurate project details, including layout plans, project status and timelines. Misleading advertisements are prohibited.
- Advance Payments: Developers cannot demand more than 10% of the property's cost as an advance before signing a sale agreement.
- Timely Completion: Developers are required to complete projects on time and hand over possession to buyers as per the agreement. Delays can result in penalties.
- Escrow Account: A significant portion of the funds received from buyers must be deposited in a separate escrow account, ensuring that the money is used for the specific project.
How RERA Benefits Real Estate Investors
- Enhanced Transparency: RERA mandates the disclosure of project details, providing investors with accurate and reliable information to make informed decisions.
- Legal Protection: The act provides a legal framework for addressing grievances, ensuring that investors' rights are protected.
- Timely Delivery: With stringent regulations on project timelines, RERA ensures that investors receive possession of their properties on time.
- Reduced Risks: The requirement for an escrow account minimizes the risk of fund diversion, ensuring that the money is utilized for the intended project.
Conclusion
RERA has significantly transformed the real estate landscape in India, making it more transparent and investor-friendly. By understanding the provisions and benefits of RERA, real estate investors can navigate the market with confidence and make informed investment decisions. If you have any queries or need legal assistance regarding RERA, feel free to contact Advise Wise Associates. Our team of expert RERA Lawyers is here to help you.