RERA Rules for Builders

The Real Estate (Regulation and Development) Act, 2016 (RERA) establishes certain rules and regulations for builders and real estate developers in India to ensure transparency and accountability. Here are some key provisions:

Registration with RERA: Builders must register their projects with the Real Estate Regulatory Authority before advertising or selling any property.

Project Details: Builders must provide all project details, including layout, plan of development works, status of statutory approvals, proforma agreements, names and addresses of real estate agents, contractors, architects, and structural engineers, among others.

Adherence to Project Plan: Builders must adhere to the approved plans and project specifications. Any alterations require the consent of at least two-thirds of the buyers.

Advance Payments: Builders cannot accept more than 10% of the property’s cost as an advance payment before signing a sale agreement.

Title of the Property: Builders must ensure that they have the legal title of the property with requisite documents to prove the same.

Insurance: The builders must get the project insured and hand over insurance documents to the buyers upon possession.

Timely Completion: Builders must complete the project within the stipulated time. Any delay in possession results in the builder compensating the buyer.

Defect Liability: Builders are responsible for rectifying any structural defects or poor workmanship for five years from the date of possession.

Escrow Account: Builders must deposit 70% of the amount received from buyers into an escrow account to cover the cost of construction and land.

Advertising Standards: Any advertisement or prospectus issued by the builder should not contain any false statement or misrepresentation. If any buyer sustains any loss or damage due to misleading information, they are entitled to receive compensation.

Quarterly Updates: Builders must provide quarterly updates on the status of the project to RERA and to the homebuyers.

Penalty for Non-Compliance: Failure to comply with RERA rules can result in fines, imprisonment, or both for the builders.

These provisions ensure that builders maintain transparency, deliver quality projects, and protect the interests of homebuyers.