Buying a home is a big decision, and unfortunately, the real estate sector has seen many cases of fraud and deception. To protect buyers and ensure fair practices, the Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced. One of the key parts of this law is RERA registration, which helps reduce fraud in real estate. Let's understand how RERA registration works and why it’s important.
What is RERA Registration?
RERA requires that all real estate projects, whether they are homes or commercial buildings, must be registered with the state RERA authority before they can be advertised or sold. This registration process involves sharing detailed information about the project, such as the status of the land, project timeline, financial details, and necessary approvals.
How RERA Registration Reduces Fraud
1. Improved Transparency
When a project is registered with RERA, developers must provide all project-related information on a public website. This includes details about the layout, approvals, and progress of the project. By making this information accessible to everyone, RERA ensures that buyers know exactly what they are getting into, reducing the chances of misleading or false claims by developers.
2. Financial Discipline
RERA requires developers to keep 70% of the money received from buyers in a separate bank account. This money can only be used for that specific project. This rule prevents developers from using the funds for other projects, ensuring that the project is completed on time and reducing the risk of financial mismanagement.
3. Accountability and Compliance
RERA holds developers accountable for their promises. If a developer fails to complete the project on time, they must compensate the buyers for the delay. This ensures that developers stick to their schedules, reducing the risk of project delays and abandonment.
4. Quick Resolution of Complaints
RERA has a system in place to quickly address complaints from homebuyers. If a buyer has any issues with the project, they can file a complaint with the RERA authority, which is required to resolve it promptly. This provides a quick and effective way for buyers to get their issues resolved, protecting their rights.
5. Deterrence Against Fraud
RERA imposes heavy penalties on developers who do not comply with its regulations, including fines and imprisonment. This acts as a strong deterrent against fraudulent activities. Knowing that strict action will be taken for non-compliance, developers are more likely to follow ethical practices.
6. Equal Access to Information
RERA requires that all project details be published on the official RERA website. This ensures that buyers, investors, and regulatory authorities all have access to the same information. This prevents developers from providing different information to different parties, reducing the chances of fraud.
Conclusion
RERA registration has brought much-needed transparency, accountability, and discipline to the real estate sector. By requiring detailed disclosures, ensuring financial discipline, and providing a robust system for resolving complaints, RERA significantly reduces the risk of fraudulent activities. For homebuyers, this means a safer and more trustworthy environment for making one of the most important investments of their lives. RERA continues to play a crucial role in promoting fair and transparent practices in the real estate market.
