The implementation of Real Estate Regulation & Development Act (RERA) was a defining moment in the Indian real estate sector. For those buying a property, it safeguards their interests, brings transparency, and ensures accountability and timely completion of projects.

Let us run through few pointers you must keep in mind while buying a property under RERA

1. RERA Registration

All commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, must register with RERA authority for launching a project.

The builders or developers have to publish all the details such as sanctioned plan, layouts, the location of the project with clear demarcation of land, carpet area, number and area of garage, etc. Developers have to get all the clearances before they advertise or sell any property. You can check online on RERA website about every detail of your chosen project.

Quarterly updates on Construction progress must be provided by the developer including number and types of units sold out, government approval taken or approval pending list & completion schedule. Any litigation related to that property must be reported and updated along with the documents of proceedings, by builder/developer.

2. Escrow Account

The developer has to transfer 70% of the money received from customers to an escrow account. The developers can withdraw this money, only post approvals from engineers and chartered accountants they appoint. This way the developer will use that money only for the project you invested in and not others.

3. Agreement of Sale 

Earlier only home buyers were penalized on any default as per sale agreement; not the developers. But, now as per RERA norms, a sale agreement has to be entered between promoters and homebuyers to ensure equality and protect buyers from various penalties and charges.

The agreement of sale specifies details of the project including the construction of buildings and apartments, along with specifications, internal development works and external development works, the date on which the possession of the apartment, plot or building is to be handed over, etc.

Developers must also provide Title Clarity over the property and project.

Also Read about budgeting and other basic factors to consider while choosing an apartment.

4. Advance Payments

The promoter cannot ask and accept a sum of more than 10% of the cost of project, plot, etc. as an advance payment or an application fee from the buyer without a written & registered agreement for sale.

5. Developer Liability

For any structural defect or poor quality, the developer will get it rectified till a period of five years. So, for any quality issues, the developer is liable.

6. Carpet Area

The area of a property is often calculated in three different ways – carpet area, built-up area, and super built-up area. Earlier this lead to a lot of disconnect between what home buyer was promised and what he actually got.

But, now it is mandatory for the developers to disclose the size of their apartments, on the basis of carpet area (i.e., the area within four walls). Usable spaces like kitchen and toilets are also included in carpet area.

7. Misleading/ False Information to Buyers 

Any advance payment done to the developer, on the basis of misleading/false information via prospectus or in advertisement will be refunded. And if the buyer wants to continue with the project then the builder has to pay penalty (up to 5% of the cost of property).

8. Possession Not Given in Time

If the developer fails to deliver the possession on time then, then they are liable to pay back the entire amount paid by the buyer (if you leave the property) or pay interest for every month of the delay till you receive the possession.

9. Alteration in Sanctioned Plans

Any alteration in plans and specifications in the buyer’s flat can be done post their approval. Any alteration in the entire project’s layout & common areas of society, approval is required from 2/3rd number of total buyers.

Besides these, the developer cannot transfer the majority rights and liabilities of the project to a 3rd party without the prior written consent from two-third allottees (except the promoter) and without the prior written approval of the RERA authority. Also for any grievance redressal, the buyer may file a complaint with RERA which must be resolved within 60 days. If not satisfied you may complain with Appellate Tribunal or High Court and Supreme Court.

When buying a property under RERA, the buyer’s interests are well protected. So before you book one ensure its RERA Registration.