5 Critical Facts to know about Rera before Investing in Real Estate

by Richa Malhotra Real State

The absence of a lawful supervisory body (like SEBI for the capital markets) in the real estate industry was long felt. This privation was fulfilled when RERA (Real Estate Regulatory Authority) came into existence in many states and Union Territories. Its functions take in –protection of stakeholder’s interests, amassing information at an assigned repository and making a powerful system for complaint redressals. To counteract time lags, the regulatory body has been ordered to resolve applications within 60 days (maximum period); there might be an extension to this time period but there has to be a recorded reason for the deferral.

Here in this article, we will be discussing 5 laws imposed by RERA that will help and increase buyer’s confidence in shops in Noida industry –

1) Compulsory registration – In accordance with the central law, every single real estate project with the total area exceeding 500 sq. meters or project with more than 8 units must be registered with the RERA for their state. Existing commercial or residential projects where the occupancy certificate (OC) or the competition certificate (CC) has not been dispensed, are required to meet the terms under the RERA act. For the application of registration, the developers have to provide detailed information, which include – details of the developer, land status, schedule of completion, approvals, etc. After completing these formalities, the developer’s project be marked authentic for development.

2) Reserve account – Buyers investing in shops, office spaces, flats, etc. are most affected by the delays in real estate projects and one of the chief reasons for these delays was that most developers used to divert the funds collected for the construction of one project to fund new and other multiple projects. To counteract such a diversion, developers have to park 70% of the project money into a separate reserve account. The amount in this reserve account can only be used on the project land and its construction costs and all this has to be certified by an industry professional.

3) Persistent disclosures by developers – After the implementation of RERA, investors will be able to proctor the project progress. All the project retailed updates will be available on the RERA website, as the developer has to periodically update the same.

4) Representation of the Title – Now, the developers have to make a positive guarantee on his authentic title and land interest, the same can be used against him if the investor or RERA finds any discrepancy in the title. Furthermore, they are required to acquire insurance for the title and project construction, income of which will go directly to the beneficiary upon the execution of sale agreement.

5) Standardization of the sale agreement – RERA endorses a standard model sale agreement between the developers and the property buyers. Earlier, developers used to add castigatory clauses against the property buyers, which reprimand the buyer for any default while in the same situation there were no harsh steps against the developer. With RERA, such clauses are things of the past and property buyers can rest assured, as now the standard sale agreement is more balanced.

Besides the above-mentioned laws, RERA has strict eye on violators and for them both monetary penalties as high as 10% of the project cost and even imprisonment have been prescribed.

So, if you have any plans to invest in shops in Noida, we have a perfect property for you by the name Anthurium. Anthurium offer its investors the pioneer digital shops at the prime location of sector-73, Noida. It has everything that you are looking for – shops, office spaces, shared office spaces, virtual spaces well planned with cutting edge infrastructure and technology. With RERA and Anthurium by your side it’s the right time to put your money on commercial properties.