A survey by Magicbricks, a housing portal, reveals that around 74% home-buyers in India are unaware of the online process to check a realty project’s compliance with the Real Estate Regulatory Act (RERA). This is partly due to lack of awareness and partly because many states have yet to set up a RERA Authority or create a website for uploading information
However, in states where RERA has been implemented, it has empowered people with critical information before buying their most precious asset —a home. It ensures their investment is protected and also provides a dedicated tribunal to address their concerns. The law requires developers to register their projects and upload extensive details, including details of permissions, financing and completion schedule, before they can advertise the project, take bookings or start construction. The Act has eliminated confusion by standardising information that is uploaded; for instance, all measurements will be on the basis of carpet area only. The breadth of information that requires to be disclosed in the public domain benefits buyers as well as financiers of realty projects.
RERA applies to anyone who intends to sell a project commercially and is not constructing for personal use; hence, it does not apply when the project has less than eight apartments or on land that is under 500 square meters. It also does not apply to projects that have already obtained a completion certificate prior to 1 May 2017.
For home-buyers in states where RERA has been successfully implemented, it makes great sense to check out details about the property and understand its benefits and drawbacks before making an investment decision.
JLL India, a large realty services company, says that Maharashtra, with almost 16,000 project registrations, has seen excellent implementation of RERA in just one year since its launch. MahaRERA has also had a good track record of redressing customer complaints and queries and is among the first to have started the mutual conciliation process for dispute resolution as well. This has set a good example of how a regulator can be practical, proactive and fair to buyers and sellers of property.
Here is how you can check the key documents for a project registered in Maharashtra on the
MahaRERA website. Select the Registered Projects tab and fill in the exact name of the project, if you know it, or simply write the promoter’s name.
For example, when we insert the name ‘Lodha’ as the name of the promoter, it throws up a list of about 35 projects undertaken by the builder in and around Mumbai. After clicking on the desired project, a new page opens up, giving details like name of the promoter, project name, date of completion (proposed and revised), litigations (if any), complete address of the project site, total area, open area available for recreational purposes, built-up area as per approved floor space index (FSI), number of covered parking or garages, common areas and facilities and amenities, and details of proposed apartments with carpet area. It also provides details of litigations, if any, and their current status. A buyer can also see the specific documents to back these details.
You can also check all the documents uploaded by the promoter, such as the legal title report, proforma of the allotment letter and agreement for sale, details of encumbrances, building plan approval, layout approval, commencement certificate, and certificates from architect and status of formation of housing society or similar body.
You can check the past experience of the promoter or builder and projects completed in the past five years. This will give you a fair idea of the builder’s conduct and credentials. It also allows you to check if the directors of the project have any cases (especially criminal cases) pending against them. It yes, do not book or buy property in such projects.
You must check specifically for litigation pending against the project in which you wish to buy a flat. Litigation relating to environmental clearance is a possibility, in which case, you may want to stay away from it.
If you are booking your home through an agent, verify whether the agent is registered with RERA. Avoid dealing with unregistered agents and remember, anyone operating as a realty agency without RERA registration is liable to pay a penalty of Rs10,000 for every day during which the defaults continues or 5% of the cost of the plot, apartment or building.
Look for model agreement on the website. You may want to crosscheck whether the agreement provided to you by the builder is in line with the model agreement suggested by RERA.
Check the date of possession promised by the builder on the RERA website. Apart from all other verification, you need to check if the date of delivery is in line with your expectation. If the builder fails to handover possession by the scheduled date, he is liable to pay the buyer interest on the total amount paid until he hands over the property. The rate of interest is 2% more than the prevailing rate of interest charged by the State Bank of India (SBI). This interest should be automatically paid to the buyer as per the agreement. A buyer can approach MahaRERA for redress, in case the promoter/builder fails to pay interest for delayed possession. The promoter/builder also had the right to file complaint before MahaRERA against the buyer for not adhering to the agreement by failing to make payments as per the agreement.
If the builder has booked/sold more than 51% of flats, he is required to form a housing society.
Here are some important documents available on the RERA website that you must verify.
First, verify the title document. Then verify the letter of disapproval (LoD), intimation of approval (IoA) and commencement certificate (CC) to crosscheck whether the builder has adhered to conditions of the CC. There are key documents based on submission of a building plan approval that a builder is required to obtain before starting a project.
Verify the details and credentials of the promoter/builder, agent and the project. If you are fully satisfied, and have paid more than 10% of the estimated cost of the flat to the promoter/builder, get the agreement executed.
RERA also has clearly defined the policy regarding parking space. The Act says that open parking space or common areas cannot be sold by the promoter and must be allotted to members by the housing society or association. However, the builder can sell covered parking and garage to buyers.
Under RERA, all complaints need to be resolved within 60 days from the date of filing. A buyer can approach RERA or a consumer forum for grievance redress, but civil courts cannot entertain disputes where RERA is empowered to decide matters.
MahaRERA also has a conciliation system where disputes between promoter/builder and buyer are resolved in informal and amicable manner. MahaRERA has set up 10 conciliation Benches in Mumbai and five in Pune. Each Bench consists of a member each from real estate developers’ organisations and one member from a recognised consumer organisation. The cost for conciliation is only Rs1,000, quite affordable for a common man, and there are no legal fees involved.
Implementation of RERA is rather patchy at the national level. Only 19 States and Union Territories have an online portal in place so far and only five states had set up a permanent real estate regulatory authority so far. About 27,000 projects and 17,000 agents have been registered, although the government hopes that the rest will comply in the next 12 to 18 months. Clearly, Maharashtra is way ahead in implementation and people must make the best use of this empowering legislation.
What action buyer should take under this condition
Is there any way to find out recent market transactions of, say, a city or a specific locality? Is there any database for this? Or is RTI the only way?