News Point: Now that the Real Estate Regulatory Bill has been cleared for take-off and will be an enforceable law soon, the question that buyers are asking is how exactly they will benefit from it.
This is a fair question, considering that RERA was primarily formulated for their protection and in their interests. Let me answer it as clearly as possible, without sacrificing on the necessary details.
One of the most important things that RERA will do for homebuyers is to reduce their uncertainties when it comes to planning their finances around a home purchase.
If we assume that a buyer has booked a flat admeasuring 1,000 square feet, and that the developers has promised possession in three years. A flat of such dimensions (1000 square feet) in a location which is close to the city Centrex, or has good public transport connections to it, would potentially earn its owner anything between Rs. 1.5-2.5 lakh per annum.
If the developer keeps his promise and delivers the flat in the stipulated time, the buyer would be able to put the flat out on rent and draw an income from it to offset his home loan expense.
However, if the developer fails to deliver the property in three years and extends the delivery by a year or more without providing compensation for the delay, the buyer’s finances are thrown seriously out of whack. The Real Estate Regulatory Bill will safeguard property buyers from such eventualities.
In the latest amendment to RERA which was accepted in the final draft, real estate agents are also covered under its. Effectively, this means that property agents can no longer engage in deceptive promises, charge excessive brokerage or fail to perform their full duties in a property purchase. They will be held accountable for any deficient service or failure of omission or commission.
RERA will also ensure that home buyers will not be cheated on the promised layout, and that amenities and fittings will not change along the way. Notably, such unforeseen and unscheduled changes were a recurring nightmare and grievance for homebuyers in the past.
With RERA in force, the developer will not be able to make any changes in the layout, dimensions, amenities, facilities and fitting which were agreed upon at the time of signing the sale deed. If they still occur, affected buyers can appeal to a tribunal which has been specifically instated to address such incidences, and be assured that punitive or corrective action will be taken against the developer.
Also, RERA will require developers to quote their asking rates on carpet area instead of super built-up area, which has so far been the norm. This aspect will take some time to be fully implemented, as it is a huge change which will require countless developers to recalibrate their rates.
There are many more facets to this Bill which will work in favour of property buyers, but the above clearly indicate that property buyers are soon going to stop being victims and will in fact be much more in full control of their property investments.
By: Kishor Pate, CMD, Amit Enterprises Housing