RERA Approved Projects: Importance, Benefits, and Approval Criteria
RERA, or Real Estate Regulatory Authority, has become a game changer in the Indian real estate market. Being a regulatory body that ensures transparency, accountability, and protection of property buyers, it plays a crucial role in protecting the rights of the stakeholders at every step of the home-buying process.
In this blog, let’s take a look at the importance of RERA in the housing industry, its many benefits for buyers, and various approval criteria for a real estate project to get a RERA-approved certificate. Understanding all these factors helps you make informed decisions while buying a property.
What is RERA?
Enacted by the Government of India in 2016, the RERA Act is designed to regulate the real estate industry by protecting the rights of home buyers and setting guidelines for developers, agents, and buyers to ensure fair transactional practices.
Under the RERA Act, developers must register their projects under it to ensure no false advertisement, timely delivery of the projects, and efficient dispute resolution to establish trust in the process.
The RERA Act differs state-wise to address the construction needs in various states. Project developers must adhere to the policies and register themselves under RERA to create, promote, and benefit from the best real estate project that attracts the right customers.
Now, let’s take a look at the many benefits RERA offers to prospective homebuyers.
Benefits of RERA Approval
To prevent any possible delay in the handover of property due to delays in the project, RERA mandates developers to allocate a certain percentage of finance to an escrow account. The funds invested in this account can only be used for construction-related activities, thus reducing the risk of misplacing the funds, which results in further delays.
Clarity on Carpet Area and Pricing:
Setting a standard of property measurement, RERA requires developers to sell property solely based on its carpet area. This factor has made property buying more comparable and comprehensive as the customer only pays for the usable space while reducing additional costs, helping them in buying the most profitable property.
Structural Defect Liability:
RERA has the right to hold property developers accountable for any structural defects that might get customers into a physical and financial crisis. RERA can observe projects after completion for a certain period of time and mandate developers to fix any damages from their pocket, thus protecting buyers from incurring further expenses.
Protection Against False Advertisements:
RERA requires property developers to provide only the most accurate and verifiable information while promoting it to prospective buyers. Developers are held accountable for any exaggerated and outright false claims in any aspect of the project and can take legal action in case of failure to rectify misinformation from developers, making property purchases more trustworthy for buyers.
Importance of RERA Approval:
With all the factors mentioned above, it’s quite clear that RERA approval holds immense importance for developers. Being RERA Approved means a great deal for developers as a symbol of trust and authenticity. A well-informed homebuyer often prioritizes a project with RERA approval as it fulfils all the criteria mentioned by the Government with a promise of swift grievance resolution.
With that said, here’s why RERA approval is important for buyers:
Consumer Protection: RERA approval ensures that the project meets specific quality standards, protecting buyers from unscrupulous developers and substandard construction.
Transparency and Information Accessibility: RERA mandates that developers provide comprehensive information about the project, including details on the developer, layout plans, timeline, financials, and legal approvals. This transparency enables buyers to make informed decisions based on reliable information.
Timely Delivery: RERA establishes strict guidelines for project completion timelines, reducing the risk of delays. Developers are held accountable and must provide compensation for any delays, ensuring timely possession for homebuyers.
Dispute Resolution Mechanism: RERA provides an efficient dispute resolution mechanism through adjudicating officers and appellate tribunals. This helps resolve conflicts between buyers and developers swiftly and fairly.
Approval Criteria for RERA Projects
To obtain RERA approval, developers must fulfil the following criteria:
Developers are required to register their projects with the respective state’s RERA authority. This includes providing essential details such as project status, layout plans, timeline, financials, and legal approvals.
Developers must demonstrate financial stability and prove their ability to complete the project. They are required to disclose their financial statements and show sufficient resources to undertake and complete the development.
Adherence to Building Regulations:
RERA-approved projects must adhere to local building regulations and obtain all necessary permits and clearances from the relevant authorities.
Consent from Homebuyers:
Developers need to obtain the consent of a certain percentage of buyers in the project before applying for RERA approval. This ensures that the interests of buyers are taken into account and major decisions are made collectively.
Escrow Account Compliance:
Developers must adhere to the requirement of depositing a percentage of project funds into a designated escrow account. This ensures financial security for buyers and confirms that the funds are utilised for the intended project.
Compliance with RERA Regulations
Developers must comply with the regulations and provisions of RERA, including adhering to project completion timelines, maintaining transparency, and resolving buyer grievances on time.
RERA approval for real estate projects holds immense importance for homebuyers, offering transparency, protection, and accountability. The approval criteria are designed to ensure the utmost quality of the property by adhering to the pre-set standards. The RERA registration has become a strong tool to help customers better compare the property and demand just what is promised by the developer, thus expediting better decision-making while getting their dream home. All these factors will make the real estate market in India more trustworthy for years to come.