May, 2023
A regulatory authority is essentially a watchdog organization that looks after a particular industry of business. The purpose of such associations is to ensure fair and fluid practices on each end and strive for a win-win situation for all the stakeholders. The Reserve Bank of India regulates the banking system in India. The stock exchange is monitored by the Securities and Exchange Board of India. The insurance industry in India is administered by the Insurance Regulatory and Development Authority of India. Similarly, the real estate market in India is regulated by Real Estate Regulatory Authority (RERA).
The Real Estate (Regulation and Development) Act, 2016, introduced the Real Estate (Regulation and Development) Authority, which aims to safeguard homebuyers while simultaneously boosting real estate investments. The Parliament of India Act bill was enacted by the Upper House (Rajya Sabha) on March 10, 2016. On May 1, 2016, The RERA Act went into effect. Initially, only 52 of the 92 sections in the Act were notified. All of the remaining provisions went into effect on May 1, 2017. There has been a need for a proper regulator in the real estate sector for a long time, and The Act established a Real Estate Regulatory Authority in each state and union territory (like Chandigarh, Lakshadweep, Daman & Diu, Dadra & Nagar Haveli, and Andaman & Nicobar Islands). The State governments are required to establish rules to carry out the provisions of the Real Estate (Regulation and Development) Act, 2016, within six months of the Act's commencement date, according to Section 84 of the Act. To avoid delays, the authority has been instructed to process applications within a maximum of 60 days. However, this time limit may be extended only if a justification for the delay is established. Its responsibilities include safeguarding stakeholders' interests, collecting data in a specified repository, and establishing an effective grievance redressal procedure. In essence, RERA ensures security, transparency, fairness, quality, and authorization in the real estate industry.
Property buyers are a group of stakeholders of the real estate industry under the protection of The RERA Act. Hence, If you are looking forward to making a purchase of residential flats in Mulund, it is imperative for you to ensure it is certified by RERA. How does RERA affect the buyers of new residential projects in Mulund?
An essential point to remember while looking around for residential flats in Mulund is registration with RERA. According to the Central Act, every real estate project (where the total area to be developed exceeds 500 sq. meter or more than 8 flats planned to be constructed in any phase) must be registered with its respective state's RERA. The existing projects which have not secured a completion certificate (CC) or an occupancy certificate (OC) must also comply with the Act's registration criteria. Promoters are needed to provide comprehensive information about the project when applying for registration, such as land status, promoter data, approvals, completion timetable, and so on. A project can only be promoted after registration is complete and all other permissions (construction-related) are in place.
The Act specifies a standard model sale agreement that promoters and homebuyers must adopt. Typically, promoters use penal provisions against property buyers that penalize them for any default, while the promoter faces little or no punishment for similar failures. Such penalty clauses have become obsolete, and homebuyers can anticipate more balanced agreements in the future to invest in upcoming residential projects in Mulund.
The homebuyers looking for new residential projects in Mulund will be able to track the development of a project on the RERA website after implementation of this Act since promoters will be compelled to make periodic submissions to the regulator regarding the project's progress.
There is no waiting period for upcoming residential projects in Mulund beyond the promised possession date. Not being able to acquire possession of properties from the builder is a strict red flag and such situations are always under the influence of RERA. Developers who violate the delivery deadline will have to pay an appropriate amount of compensation or interest to home buyers. There also exists a possibility of imprisonment up to three years.
One of the primary reasons for project delays was that the funds raised for one project were invariably redirected to fund new, unrelated ventures. This is not the case anymore. Promoters are now required to accumulate 70% of all project receivables in a separate reserve account to prevent such a diversion. The funds in such an account can only be used for land and construction costs, and it must be certified by a professional.
The mechanism by which a developer calculated the price of a project was not defined prior to RERA. However, with RERA, a uniform formula for estimating carpet area has been established. In this approach, promoters will be unable to provide exaggerated carpet areas in order to raise pricing. Such a regulation creates a very safe environment for the home buyers for residential flats in Mulund.
Many developers promote their projects by unethical marketing practices, pitching exaggerated amenities and making bogus promises. However, regarding the new residential projects in Mulund, The RERA Act ensures that each promotional guarantee includes the RERA registration number, and all the claims and advertisements are totally truthful and free of any deceptive promises.
RERA is thus a step in reforming India's real estate sector, encouraging greater transparency, citizen customer orientation, accountability, and financial discipline. Harnessing the protection of RERA's regulation make the property investors of upcoming residential projects in Mulund immune to malpractices in the real estate sector.
Also read: Buying a Flat in Splendour Mulund West: Luxury Living at its Finest
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