Curious about RERA Act
How does the RERA Act ensure the timely delivery of projects?
The Real Estate (Regulation and Development) Act (RERA) includes provisions to promote and ensure the timely delivery of real estate projects. Here are some key mechanisms through which RERA aims to achieve this objective:
1. Disclosure of Project Timeline: Developers are required to disclose the estimated project completion timeline at the time of registration with the respective state's RERA authority. This timeline is mentioned in the sale agreement with home buyers. By providing a clear and agreedupon timeline, RERA promotes transparency and accountability.
2. Adherence to Project Timeline: RERA mandates that developers adhere to the project completion timeline mentioned in the sale agreement. They are legally obligated to complete the project within the stipulated timeframe. Any deviations or delays require the developer to compensate the home buyers as per the provisions of the agreement and RERA regulations.
3. Compensation for Delays: In case of project delays, RERA provides for compensation to the home buyers. The Act mandates that developers pay interest to the home buyers for any period of delay beyond the agreedupon timeline. This provision acts as a deterrent to developers from delaying projects and incentivizes timely completion.
4. Escrow Account Management: RERA requires developers to maintain a separate escrow account for each project. The funds collected from home buyers are to be deposited in this account, and withdrawals can only be made for the specific purposes of construction and landrelated costs. This provision ensures that funds are used appropriately and prevents diversion of funds, which can contribute to project delays.
5. Regular Project Updates: Developers are required to provide regular updates on the progress of the project to the respective state's RERA authority. These updates include information on the status of construction, approvals, and timelines. Such reporting helps in monitoring the progress of projects and identifying potential delays.
6. Dispute Resolution Mechanism: RERA establishes the Real Estate Regulatory Authority and the Real Estate Appellate Tribunal to address grievances and disputes between home buyers and developers. This mechanism provides an efficient platform for resolving disputes related to project delays and seeking appropriate remedies.
By enforcing adherence to project timelines, providing compensation for delays, and establishing a regulatory framework for dispute resolution, RERA creates a system that incentivizes developers to complete projects within the agreedupon timeframe. It aims to protect the interests of home buyers and promote the timely delivery of real estate projects.